Aiming for Growth through“Unity in Diversity”
Nisshinbo Holdings Inc.
2-31-11, Ningyo-cho, Nihonbashi,
Chuo-ku, Tokyo 103-8650, JAPANTEL +81-3-5695-8833 FAX +81-3-5695-8970
www.nisshinbo.co.jp/english/

Integrated Report 2021
Fiscal Year Ended December 2020

Nisshinbo Group Corporate Philosophy

Nisshinbo Group Operating Performance

Based on its commitment to VALUE and its Business Conduct Guidelines, which are derived from the

Corporate Philosophy, the Nisshinbo Group aims to increase corporate value together with stakeholders
as an Environment and Energy Company group that works to create a sustainable society.

Note: The fiscal period ended December 2018 was a nine-month transitional period (Mar-Dec 2018) due to a change in the fiscal year-end.

blic

Funda
E ntitymental Spiri

Consi stent
Integrity

t

Inno

v at

i on

—The value we provide and the approach we taketo realize our Corporate Philosophy— Standards of behaviour expected of every Group
employee• We provide our customers with eco-friendly
products and services to create a safer andmore secure society with integrity.
• We create new value to inspire and satisfy
our customers.
• We improve upon our corporate value andmeet the expectations of our shareholders.
• We hold dear a corporate culture in which
our employees can proudly work with vigor
and boldly engage in new endeavors.

• Respect for Human Rights• Thorough-Going Compliance• Respect for Diversity• Awareness and Concern towards ourEnvironmental Impact• Safety is the Basis for Everything• Fair and Transparent Business Practices• Boldly Striving Forward• Innovation• Quality Communication

Precision
Instruments

4¥457.0 billion-8

Micro Devices

Automobile Brakes

Masahiro Murakami

President and Representative Director
Nisshinbo Holdings Inc.

“International Integrated Reporting
Framework,”International
Integrated Reporting Council (IIRC)“Guidance for Integrated Corporate
Disclosure and Company-Investor
Dialogues for Collaborative Value
Creation,”Ministry of Economy,
Trade and Industry(METI)“Sustainability
ReportingStandards,”Global
Reporting Initiative(GRI)

Contents
ProfileC2

Nisshinbo Group Corporate Philosophy/

1

Nisshinbo Group Operating Performance

		 On Delivering the Integrated Report
2

Value Creation History and Contributions to the4

The Nisshinbo Group's Value-Creation Process

SDGs

Management Strategy
6

Message from the Chairman

12

Nisshinbo Group Financial Strategy

7

Message from the President

14

President and Representative Director of Japan

16

Three Business Domains Driving the Nisshinbo Group

18
22

Radio Co., Ltd.
Going Forward
Mobility

Infrastructure & Safety

33

Micro Devices

38

Precision Instruments

36
40
42
44

Automobile Brakes
Chemicals
TextilesReal Estate

ESG Initiatives
45

ESG Initiatives

47

Social Initiatives

46
50
56
57
60

Environmental Initiatives
Corporate GovernanceManaging Risks and Opportunities

Board of Directors, Audit & Supervisory Board

Micro Devices

Financials

Business Segments

68

Financial Statements

29

72

30

At a Glance

Wireless and Communications

66

73

Chemicals

Precision
Instruments

Real Estate

TextilesOthersOperating Income / Loss*EPS

Shareholders’Equity Ratio
and ROE(billions of yen)

(yen)

（％）

200

12

150

8

100

50

Shareholders Equity Ratio

ROE

40
30
20

4

50

10
0

0

-4

0

-50

2017.3 2018.3 2018.12 2018.12 2019.12 2020.12-10

2017.3 2018.3 2018.12 2019.12 2020.12(adjusted)2017.3 2018.3 2018.12 2019.12 2020.12* Operating income for the fiscal year ended December 2018 has been adjusted to facilitate year-on-year comparison.

Number of Employees

Research andDevelopment Expenses

Greenhouse Gas
Emissions per Unit of Sales(thousands)(billions of yen)(t-CO2/million yen)

25

25

20

20

1.2

15

15

0.9

10

10

0.6

5

5

0.3

1.5

Members and Managing Officers

Eleven-Year Summary

Life & Healthcare

Automobile
BrakesCompliance64

27

THE USE BY NISSHINBO HOLDINGS INC. OF ANY MSCI ESG RESEARCHLLC OR ITS AFFILIATES (“MSCI”) DATA, AND THE USE OF MSCI LOGOS,
TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOTCONSTITUTE A SPONSORSHIP, ENDORSEMENT, RECOMMENDATION,
OR PROMOTION OF NISSHINBO HOLDINGS INC. BY MSCI. MSCISERVICES AND DATA ARE THE PROPERTY OF MSCI OR ITS INFORMATIONPROVIDERS, AND ARE PROVIDED ‘AS-IS’ AND WITHOUT WARRANTY. MSCINAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI.

Wireless andCommunications

Financials

maintain efforts to provide useful information for a constructive dialogue with stakeholders.

Guidelines Used to
Prepare the Report-4

ESG Initiatives

The Nisshinbo Group promotes a business policy aimed at realizing super smart societies as an
Environment and Energy Company group guided by our Corporate Philosophy“Change and Challenge!
For the creation of the future of Earth and People.”The Group has inherited the spirit of corporate
public institutions that contribute to society through their businesses and positions ESG at the center ofcorporate management. We will also contribute to the SDGs through efforts focused on three strategic
business areas: Mobility, Infrastructure & Safety and Life & Healthcare.
In this year's Integrated Report, in addition to introducing products and solutions to investors andother stakeholders from the perspective of these three strategic business areas, we attempted to provide
detailed descriptions of the diversity initiatives essential for Nisshinbo, which has transformed its businessportfolio to meet the needs of society and achieve sustainable growth. Going forward, the Group will0

Period ended
December 2020

16

On Delivering the Integrated Report

Period ended
December 2020

8

Business Segments

Pu

Business Conduct Guidelines

Chemicals

12

Management Strategy

Business Conduct
Guidelines

VALUE¥1.2 billion(billions of yen)

Wireless andCommunications

TextilesChange and Challenge!
For the creation of the future of Earth and People.

VALUE

OthersProfileReal Estate

Nisshinbo Group Corporate Philosophy
Corporate
Philosophy

Operating Income

Net Sales

Management’s Discussion and Analysis
Key Companies in the Nisshinbo Group
Corporate Data

THE INCLUSION OF NISSHINBO HOLDINGS INC. IN ANY MSCI INDEX, AND
THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEXNAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENTOR PROMOTION OF NISSHINBO HOLDINGS INC. BY MSCI OR ANY OF ITS
AFFILIATES.
THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND
THE MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS OR SERVICEMARKS OF MSCI OR ITS AFFILIATES.

02017.3 2018.3 2018.12 2019.12 2020.12

02017.3 2018.3 2018.12 2019.12 2020.12

02017.3 2018.3 2018.12 2019.12 2020.12

1

Value Creation History and Contributions to the SDGs

Nisshinbo Group Net Sales (billions of yen)
Electronics (Wireless and Communications, Micro Devices)

Automobile Brakes

Others* Nine months of results due to change in ﬁscal year-end

600

The Nisshinbo Group began with operating companies such as Nisshin Cotton Spinning, Japan Radio

500

through business activities, and we have continued to grow by proactively promoting portfolio reforms

400

in response to the needs of today. We will continue to promote unity in diversity with the aim of300

enhancing corporate value in line with the SDGs concept.

Profileand TMD. Based on our corporate philosophy, we believe our mission is to contribute to human societyManagement Strategy

200
100

1878-

1940-

1950-

0

2000-

2011.32012.32013.32014.32015.32016.32017.32018.32018.12 * 2019.12

2020.12

1944

1958

2005

• Production of friction materials started• Established Nihon Kohbunshikan Co.,
Ltd., begins production of plastic
bobbins• New Japan Radio Co., Ltd.
becomes a consolidated
subsidiary

1946

1915

1949

• Nippon Radio Telegraph Manufacturing
Co. founded(now Japan Radio Co., Ltd.)• Nagano Japan Radio Co., Ltd.,
Ueda Japan Radio Co., Ltd.,TOKYO SHIRTS CO., LTD. founded

Challenges in each era• National modernization andindustrialization• Transition in key industries(from textiles to automobiles)

Nisshinbo Group’s role• Contributed to Japan’s modernization as
cotton textile maker• Supported development of automotive sector as specialist supplier of friction
materials

1907

Strategic businessdomains
Businesssegments

Contributed to Japan’s modernization as cotton
textile makerSupported development of automotive sector
as specialist supplier of friction materials

Helping to create super smart society
as Environment and Energy Company group

Mobility2015• TOKYO SHIRTS CO., LTD. acquired• Nanbu Plastics Co., Ltd. acquired

2011• TMD Friction Group S.A. acquired

2017

2013

• Papers business sold
• Japan Radio Co., Ltd. becomes awholly owned consolidated subsidiary• Alphatron Marine Beheer B.V. acquired2019• NJ Components Co., Ltd. acquired
2020• RBI GmbH and LEAS GmbH acquired• Global warming and other shared issues
faced by mankind

Infrastructure& Safety• Helping to create super smart society as Environment and Energy Company group

Targeting specific SDGs where Nisshinbo can make a real contribution while also taking into account all 17 SDGs

Life &
Healthcare●

Textiles○Automobile
Brakes●Precision
Instruments●

Wireless andCommunications

●

●

●

Micro Devices

●

●

●

○

Chemicals

●

●

●

○

○

○

○

○
●

○

○
○

○

○

○

○

○

○

○

○

○

○

○

○

○

○

○

○

●

Real Estate

○

○

○

○

○

Target 3.6

Target 7.3

Target 3.2

Target 3.2: Reduce the infant mortality rate
Target 3.6: Halve the number of global deaths and injuries
from road traffic accidents

Target 7.3: Double the global rate of improvement inenergy efficiency

Target 9.4

Target 13.1

Target 9.4

Target 9.4: Improve sustainability with environmentallysound technologies

Target 13.1: Strengthen resilience to climate-related
hazards and natural disasters

Core SDG objectives and targets in our business2

2018• Foundation brakes business sold
• Acquired Ricoh Electronic Devices Co., Ltd., making it
a consolidated subsidiary• ProNav AS acquired• New Japan Radio Co., Ltd. becomesa wholly owned subsidiary

Financials

Nisshinbo Group’scontribution

1959• New Japan Radio Co., Ltd. founded2014• CHOYA CORP. soldESG Initiatives• Nisshin Cotton Spinning Co., Ltd. founded• Nisshin Cotton Spinning Co., Ltd.
starts operating its Nishi Arai Plant as achemicals production facility

2010• Japan Radio Co., Ltd. and Nagano
Japan Radio Co., Ltd. become
consolidated subsidiaries

Business Segments

1878• Walter Willson Cobbett Ltd.,TMD’s forerunner company,
founded

Holding company system adopted

Business portfolio reforms

3

The Nisshinbo Group's Value-Creation Process

Changes in the external environment
Opportunities and risks

Global issues

The Nisshinbo Group has flexibly reshuffled its business portfolio based

Inputs

Outputsexternal environment to achieve its clear vision of realizing super smartyGroup companies

Development of new
products and services

societies. The products and solutions created as a result are steadilybusiness meeting the demandsof a new age and society.

40companies in Japan◦

90companies overseas◦ Global
expansion to

23 countries

Human resources◦ Number of consolidated employees

21,725 peopleIntellectual property

The quality of a company
not the business itselfoup

23.3 billion¥◦ Patents, know-how,
technological capabilities

Sales base
◦ Sales network spanning Japanand the world

Value
driver

Providing solutions to issues

directly facing human society
Environmental
Global environmental▶
destruction
protection andimprovement
Extreme weather▶ Early warning
response

Group Corporate
Philosophy
Business policies
Public entity
founding spirit= Oﬀensive solutions¥◦ Interestbearing debt¥

150.8 billion

Natural resources◦ Life & healthcare-related

Impact on society and theenvironment◦ Specialized human resources◦ Female manager ratio◦ Realization of diversity◦ Realization of a safe andsecure global supply chain◦ CO2 reductions (products)◦ CO2 reductions (business)◦ Joint research anddevelopment results throughopen innovation

Financial results◦ Minerals◦ ROE◦ Water resources◦ Stable dividends◦ Energy◦ TSR＝ Defensive solutions

ESG management

Value
driverMateriality

Strategies◦ Contribution to the environmental
and energy field◦ Resolving social issues throughbusiness◦ Creation of a safe and securesociety◦ Focusing efforts in strategic
business domains◦ Global compliance4242.0 billion◦ Net assets◦ Infrastructure & safetyrelated

Financials

Financial base

◦ Mobility-related

ESG Initiatives

gris the sum of its people,◦ R&D
expenses◦ New products and services

Business Segments

Realizing supersmart societies

Ongoing portfolio changes to◦Management Strategy

meeting market needs and gaining support.

Profileon the Group Corporate Philosophy while responding to changes in the◦ Management base enhancements

KPI◦ Products and services contributing to asustainable society◦ Proportion of sales in growth businessareas◦ Non-financial indicators(human resources, supply chain,quality, environment, governance, etc.)

5Nisshinbo Will Continue theContinuing to Transform Our Business

Challenges and Changes with Diversity

Portfolio and Increasing Cash Flowsand Inclusion from a Global

to Contribute to Society

Perspective

through Business Activities

Masaya Kawata

Masahiro Murakami

Chairman and Representative Director

President and Representative Director
Nisshinbo Holdings Inc.

Management Strategy

Message from the President

ProfileMessage from the Chairman

Business Segments

Taking a Global, Backcasting-Focused
Perspective to Link ESG, ROE and ROIC

renewed its commitment to ESG with a new philosophy.

While standing firmly behind the spirit of a corporate

setting environmental targets and emphasizing backcasting

philosophy passed down across generations—“Public

and activities over the short to long term, in addition to

The Nisshinbo Group corporate philosophy is“Change

continuous contributions to society?”The answer

entity,”“Consistent integrity”and“Business is people,

various governance reforms that have been promoted

and Challenge! For the creation of the future of Earth

to this question seemed clear: Among myriad social

management is education”—Nisshinbo used the 10thalong with rapid Group expansion and diversification,

and People.”This philosophy is rooted in the idea

issues, humanity must place the highest priority onanniversary of its transition to a holding company structure

we believe a crucial role of the Board of Directors goingof corporations as public entities that“exist for the

resolving environmental issues. Based on the idea thatin 2019 to revise the way it expresses ESG as“Change andforward will be to further enhance Nisshinbo’s governancepurpose of contributing to human society, with ongoingpromoting businesses that contribute to protecting the

Challenge!”(G), for the creation of the future (G) of Earth (E)guidelines.

Considering the 2030 and 2050 timelines announced bycountries throughout the world to improve efficacy by

Financials

Ongoing Business Portfolio Reorganization
as an Environment and Energy Companygroup

ESG Initiatives

Nisshinbo Holdings Inc.

corporate growth. If our business does not serve theneeds of the world, the Company itself must change.
Returning to our beginnings, we asked ourselves“what kind of business portfolio will facilitatecontributions being the driving force behind corporate

global environment will contribute to society and leadIn developing global management, while monitoring

growth.”At Nisshinbo, we are formulating growth

to the sustainable growth of the Nisshinbo Group, we

to society with sincerity, engaging in management centereddynamic movements throughout the world, it is criticalstrategies and continuing to reorganize our business

formulated a business policy to realize super smart

on people rather than industry type or business conditions

to understand the background and details of each of

portfolio to embody the business policy to realize supersocieties as an Environment and Energy Company

and conducting training and education that is enhanced

the SDGs and associate the business we engage in withsmart societies as an Environment and Energy Company

group, which is applied to all existing Group companies

rather than hindered by diversity will become our strengths

the SDGs. It is also important to remain cognizant of thegroup guided by our corporate philosophy.

and promoted to accelerate innovation, while at theas we continue to boldly and flexible take on challenges inrelationship and balance between the SDGs and ESG

the era of globalization and digital transformation.

and ROE and ROIC. To respond to complex global issues,

have passed since the founding of Nisshinbo Co., Ltd.,business areas and proactively engaging in M&A, we

Addressing global warming and climate change

we believe that considering diversity and inclusivenessin 1907, but on the 100th anniversary of Nisshinbo’shave transformed ourselves significantly and are still

issues facing the planet is our raison d’être and socialfrom a global perspective and enhancing liberal arts

founding, we embarked on a new direction. With thetaking on the challenge of transforming our business

responsibility in declaring ourselves an Environment andcapabilities will be necessary to tackle future challenges

transition to a holding company structure in 2009, we

portfolio.

and transformations.

launched a new Nisshinbo Group. Behind this major

and people (S). I believe our basic approach of contributing

Energy Company group. Although Nisshinbo has been
focused on the environment since the 20th century, it has

6Looking back on the history of the Group, 114 years

same time, by fostering new businesses in growthchange in policy was a sense of crisis about slowing

7Message from the President

Communication Efforts Are Indispensable
for Employees to Work with Conviction

Adapting to the changing demands of modern life andfor businesses to exercise more power than the sumof its human resources, as people are everything.
Furthermore, companies cannot create anything
unless people make the effort, and people do notmake the effort unless they are convinced. Thus, I

society and shifting focus to the environment and energy fields

have always attempted to communicate in such a way

Targeting three strategic business fields

that employees will grasp this message with genuine
understanding and conviction ー then take action.

Strategic Business Domains

Throughout its history, the Nisshinbo Group has beenvalued as a place where top management can interact

Realize super smart societies as
an Environment and Energy
Company groupdirectly with employees. Although I was unable to
make regular visits to business sites last year becauseof COVID-19, I normally visit business sites in Japanin the three areas of Mobility, Infrastructure & Safety,

communicate management policies and expectationsand Life & Healthcare. In selecting businesses, wefor each business and listen to employee questions andcomprehensively consider qualitative aspects including

opinions, which I feel teaches me quite a bit.

alignment between social needs and Nisshinbo’s

Taking good care of people means neither spoilingLong-term Goal:（by 2025）

corporate philosophy, the future viability of the businessnor allowing complacency. The emphasis is on

and the outlook for the business environment, as welleducation, training and meritocracy, and while theas quantitative aspects such as the required investment

number of mid-career employees is increasing, we hireamount and expected return. Through this process, ifhuman resources who achieve solid results regardless of

we determine that it would be difficult for the Group to

the length of their career. However, I always emphasize

further promote a business, we will divest via a businessthat employees should not misunderstand job titles,transfer or withdrawal and management resources in

Mobility

Infrastructure & Safety

Life & Healthcare

Copper-free friction materials

Weather radar

Ultrasound imaging

which are merely one of the functions involved withthat area will be allocated to areas where growth issolutions

Medical equipment andmanaging an organization, rather than indicating that

expected.

Fuel cell vehicle parts and materials

Disaster prevention

equipment, etc.

Alertmarker+, etc.

Marine wireless communicationequipment

healthcare management

equipment development, etc.

the people positioned above them are inherently

Nisshinbo is always engaged in multiple M&A andsuperior. The responsibilities of management are morecarve-out projects, with senior management, the CFO,

important than the people engaged in management.

the Corporate Strategy and Legal Affairs divisions andrelated departments coming together in teams for each

Dedicated to Amicable M&A Activities
Aimed at Sustainable Growthbusinesses no longer in Group priority investment areas

For the Nisshinbo Group, the primary objective ofpart of the core, funds will be proactively invested and

M&A activities is to expand growth business areas. In

employees will be happy. In fact, even though the paper

2010, Japan Radio Co., Ltd. (JRC), which at the time

products business was transferred in 2017, large-scale

was an equity-method affiliate, was converted into ainvestment was made immediately after the transfer,consolidated subsidiary because electronics-related

demonstrating its strong presence.

can still play a role in core businesses if they become
affiliated with other companies. If a business becomesbusinesses did not have resources within the Group andThis is also the case when we acquire new

because we wanted to actively grow this area as a corebusinesses. As these are acquisitions aimed atbusiness.

expanding the growth business area, we will retain

At the same time, business portfolio transformation

all employees and focus resources on the acquired

involves subtraction as well as addition. The Groupbusiness. Engaging in amicable M&A is also importantis thoroughly committed to engaging in“amicable”

for new employees to feel happy about becoming partM&A activities and business transfers. In some cases,of the Nisshinbo Group.

8

Developing Human Resources That
Continuously Examine Business Selection
and Divestment

project rather than establishing dedicated departments.

The Nisshinbo Group maintains a constant focus

these factors, I think it is also okay to have a yearon business portfolio optimization by continuouslyin which nothing much happens. In addition, many

examining the selection and divestment of businesses

employees who work in these teams are the first to

and products.

enter M&A negotiations, which is beneficial in terms

This avoids an emphasis on working toward resultsthat might be a bit impossible to achieve in the firstyear or so of a project. While I am always considering

Trends and social needs change, thus to continueof an increased number of employees with experiencedemonstrating the value of our long-term presence as

in M&A negotiations. As I was brought up within thea public company, relying on only one business pillar isCompany, I think the role of the Company is to provide

dangerous and risky. Even with two pillars business canvarious learning opportunities.

be unstable, so ideally, with three pillars of business,management stability is possible even if the center ofgravity changes.
9

Financials

12 %In terms of strategic business, Nisshinbo is engaged

and overseas throughout the year, taking time to

ESG Initiatives

Aiming to increase corporate value
through business policies closely linked to our
Corporate Philosophy

ROE

Business Segments

Business Policies

It is said that“business is people,”but it is difficult

Management Strategy

Change and Challenge!
For the creation of future of Earth and People.

ProfileNisshinbo Group Corporate Philosophy

Message from the President

Going on the Offensive in 2021,
Accelerating the Group Growth Strategy
In fiscal 2020, COVID-19 impacted net sales, whichamounted to ¥457 billion, a decrease compared withthe previous fiscal year, and, despite efforts to stay

In 2006, we positioned global environmental protection as our top-priority social issue andreformed our business with a focus on the environment and energy.

S

Public Entity – Our founding spirit of contributing to society through business activities
We engage in ongoing dialogue with stakeholders (customers, shareholders, employees,
business partners, regional companies, etc.) to understand their requests and evaluations andreflect this information in our business activities.

G

2006

income of ¥1.2 billion and ordinary income of ¥3.4
healthcare. Although telemedicine advanced during

the company increased to ¥13.5 billion related to

COVID-19, many medical devices are still connected bya reduction in impairment losses from the previous

wires in hospitals. For example, there are a wide range

fiscal year, but overall, these are harsh results thatof fields in which wireless technologies can be utilized

management takes seriously.

for non-critical operations such as image transmission,

Given these conditions, 2021 will be a year inwhich we recover from COVID-19, adopt an offensive
stance and accelerate the execution of our business

2015
2017

through our businessWe embarked on governance reforms, including the introduction of an outside
director system, before the enactment of Japan's Corporate Governance Code
Abolished takeover defense measures
Abolished internal advisor and consultant system and formulated Nisshinbo's
Corporate Governance Policy

Business Segmentsbillion. Net income (loss) attributable to owners ofContributing to the SDGs

Management Strategy

in the black, income declined, resulting in operatingE

and Nisshinbo will strengthen efforts in these fields withexpectations for future growth.
standing committee. This office is an incubator, engaged

societies and economic activities would not be

attracted attention during COVID-19 is also a specialty

inclusion are the keys to corporate change and growth.

in investments and other business developments.

possible. Nisshinbo holds that the Environment (E) is

Strengthen Nisshinbo’s Earnings Base by
Expanding into Digital Service Businesses

Promoting Diversity and Inclusion
Activities

idea of the corporate public institution, thus we will

Micro Device and Automobile Brakes businesses, which

While focusing on these three strategic business areas,

The aims of diversity and inclusion activities are to

stakeholders in dialogue. Governance (G) is the basis

are booming at present, as well as new businesses

we will maintain and accelerate expansion into service

cultivate an organizational culture that empowers

for this value creation. In 2006, we appointed outsidethat respond to COVID-19. We will halt environmental

businesses utilizing our expertise in technologies andemployees to speak freely without hesitation anddirectors and launched governance reforms, and in

degradation, offer disaster prevention solutions andproducts in manufacturing with the aim of raisingtake action. For employees to work energetically, it2015 we abolished takeover defense measures andmitigation to protect human life, and, while responding

profitability across the entire Group. Although theis necessary to acknowledge and respect differences

subsequently formulated a corporate governanceto dramatic changes in the mobility industry, we will

Group engages in a diverse array of businesses, withwhile making use of mutual strengths. Diversity is thepolicy, abolished the consultation and advisory system

strive to quickly develop businesses that protect the

profitability differing with each business, we created theinfrastructure of innovation, requiring new combinations

and expanded diversity in the Board of Directors among

Earth and people’s lifestyles.

slogan“Generation of Operating Cash Flow”applicableto sustain innovation, while homogeneity is the enemy.

other efforts to build a solid system ahead of any otherin all businesses and are engaged in efforts to improve

As talented employees are the linchpin of business,company. For Nisshinbo, ESG management is seen as

longer synonymous with“automotive”or limited to

profitability through thorough cost control andto promote business diversification, we must respectnothing less than the core of our management strategy,

cars. Led by a new company JRC Mobility, we intend to

strategic pricing, selective concentration on businessthe various backgrounds our personnel bring to thewhile our business activities are perfectly aligned withproceed with developments targeting mobility on land,and product portfolio, continuous cost reduction

organization. Moreover, to manage organizations with

the Sustainable Development Goals (SDGs) targeted by

sea and air. Regarding Infrastructure & Safety, although

and inventory reduction. However, there is a limit todiverse human resources, it is necessary to“unite in

the United Nations.

JRC’s core business is infrastructure development, we

profitability improvements, particularly in B2B-led

diversity.”For corporations, it will be necessary to

anticipate growing needs for disaster prevention andmanufacturing, thus it is critical to promote a parallel

share and inculcate their philosophy and mission, and I

comprehensively improved over the next 5‒10 years,

mitigation systems due to the increased frequency

shift toward service businesses. Digital technologies

will work tenaciously to achieve this end.

but until it does, Nisshinbo will continue to protect

of natural disasters caused by climate change, thus

are the driving force behind this business model. As

we will dive deeply into this field and continue toa familiar example of service business utilization ofstrengthen our capabilities in line with our corporate

digital technologies, JM-Safety, developed by JRC, isphilosophy. In terms of Life & Healthcare, as Groupan app for smartphones that supports safe navigationcompanies manufacture medical devices and Nisshinbo

for small vessels. In 2020, we provided new services tomanufactures parts offering high technologicaladvantages on a global scale, we will focus on fields

businesses, including the Wireless and Communications
and Real Estate businesses, which develop solid
disaster prevention and mitigation businesses, and the

I used the word“mobility”just now, but this is no

Furthermore, without a healthy global environment,

merely business policy itself, whereas Society (S) is thecontinue to maintain a philosophy that contributes tothe world through business activities and to engage

It is difficult to imagine the global environment being

human life through the development of materials andPerfect Alignment between Emphasison ESG, Pursuit of SDGs and Nisshinbo
Management Strategies

equipment facilitating disaster preparedness andcustomers while leveraging the competitive advantage

The objective of corporations is not the pursuit ofengage in the resolution of environmental problemsof our technologies and products, such as the addition

profits but rather contributions to society through theirand other social issues, continuing to demonstrate its

where future growth can be expected. In particular, Iof new vessel collision functions and updated approachbusiness activities. However, without profits it would becontributions to human safety and lifestyle security.

think there is a large area in which we can contributeprediction functions. As output with a sense of speed is

impossible to continue engaging in business. And profits

through collaborations between wireless technologies,

important for service businesses that are a step ahead

must be earned correctly.

which are one of the strengths of the Group, andin manufacturing, the Digital Business Department was

10

mitigation. We will expand business to make the Earthtruly clean. The technologies and diverse human capitalconstituting the pride of the Nisshinbo Group will

Note: For details, please see page 52.

11

Financials

established within Nisshinbo Holdings as a Group-wide

the“two-Ds”of digital transformation and diversity and

ESG Initiatives

Under these management policies, we believe thatstrategies. The concept of“contactless”that hasof the Nisshinbo Group. We will grow Mobility-related

ProfileESG is Nisshinbo’s founding spirit

Nisshinbo Group Financial Strategy
business, investment in DX and IoT will become even morein shareholder value through the distribution of profits.

for each business. In the fiscal year ended December 31,

proactive going forward. Based on current depreciation

Regarding dividends, in principle, there are two distributions

2020, ROE was 5.8%, which is below WACC, a situation we

costs and net operating profit after tax (NOPAT), we will

per fiscal year: the interim dividend and the year-end

take seriously as it is damaging to corporate growth.

proactively allocate resources of approximately ¥40 billion

dividend. In the fiscal year under review, the full-year

annually to capex and R&D investment, mainly in priority

dividend amounted to ¥30 per share. Going forward,

investment areas.

Nisshinbo will continue to target a consolidated payout

Considering the impact of the long-term risks posed by
COVID-19, we must think conservatively about capital

Director and Managing Officer
Senior Manager of Finance, Accounting & IT Service Department of

Basic Financial Capital Strategy

the Wireless and Communications business, restructuring

dividends.

operational profitability by reducing investment securities

centered on the transfer of business to JRC Mobility has

In addition, if sufficient internal reserves are required

and liquidating real estate with low profitability, there isbeen completed, with preparations under way for medical

to execute future growth strategies, with comprehensive

an urgent need to improve the profitability of the businessequipment and xEV. In the Micro Devices business, theconsideration of factors including earnings outlook, stock

itself, which is the remit of management. Nisshinbo is

integration of New Japan Radio and Ricoh Electronic

price movement and the EBITDA to interest-bearing debt

shifting from a conventional business selling products

Devices is scheduled for January 2022. In the Automobile

ratio, and being mindful of stability, we will examine theto developing service businesses integrating DX andBrakes business, 2021 is the final year of the TMD Grouppurchase of our own shares among other proactive efforts

IoT utilizing technologies and products honed throughrevitalization plan and we expect to move EBIT into theto enhance shareholder returns. Regarding treasury stock,

manufacturing. And we are now able to see the fruits of ourblack from 2022. In the Precision Instruments business, whilein the event an M&A project will contribute substantiallylabor via improved investment efficiency.

we strengthened Nisshinbo-Continental Precision Machining

to increased shareholder value, although we cannot deny

(Yangzhou) Co., Ltd., the domestic business contracted. The

the shares are used for stock swaps, in principle, weFinancial Results Over the Past 10 Years

reorganization of Nanbu Plastics subsidiaries in China andwill basically cancel the shares. At present, we have notIndonesia will be completed, while at the same time, we

completed the cancellation of treasury stock, but once

The scale of Nisshinbo Group business has undergone

will develop growth prospects in the medical field. In theGroup restructuring has been completed, we will movemajor changes due to business portfolio reforms based on

Chemicals business, we are promoting the development offorward focused on shareholder returns.

organic growth and numerous M&A activities. Regarding

applications for functional chemicals, a driver of growth.

profitability, although we are implementing structural reforms

Regarding business assessment and investment appraisal,in post-merger integrations (PMI) after M&A, in terms of

Nisshinbo is currently preparing for systemic revisions

consolidated figures, profit indicator volatility is particularly

to amend business system evaluations and investment

high, making it difficult to ascertain growth trends.

appraisals as better KPIs for ROIC, but as already mentioned,

At the same time, regarding safety indicators, we have

it is difficult to assess the absolute level of ROIC as we are

The Nisshinbo Group promotes management emphasizing

been vigilant about maintaining the capital adequacy ratio

engaged in a variety of businesses, thus by first evaluating

capital productivity while maintaining financial soundness

in the 30% range for the past 10 years, and while we have athe rate of improvement relative to ROIC, we will proceed

in preparation for medium- to long-term investment andreasonable amount of debt, we have also been paying closewith the assessment and disposal of businesses.

risks. To realize the return on equity (ROE) target of 12%

attention to the EBITDA to interest-bearing debt ratio. Whilein 2025, we are aiming for autonomous corporate growth

we have ensured safety by refraining from exerting excessive

thorough cost control and reduction efforts and continuous

while introducing return on invested capital (ROIC) as anpressure so that each business can focus on improving

improvements, we must drastically assess the business itself

important internal management indicator.

profitability, if the EBITDA level stabilizes, in terms of funding,and make a determination regarding disposal.

Group working capital and capital necessary for growth

we believe we can procure about five times EBITDA, and if
we can improve the quality of EBITDA in terms of stability

and we are working to improve capital efficiency by

and growth potential, we will be able to further raise themarket trends, and maintaining a balance between theeffectively utilizing interest-bearing debt as necessary. We

interest-bearing debt ratio. In an era of low interest rates,

long and short term, Nisshinbo arranges long-term bankare also making efforts to ensure liquidity within the Groupconsideration of leverage is a measure that also contributes

loans as appropriate. Over the medium to long term, weand reduce the weighted average cost of capital (WACC)

to a stable and low WACC.

will also revise our fund procurement structure, maintainthe shareholders’equity ratio at around 40% and strive to

use of capital. Regarding ROIC, WACC is set at 6% and the

Financial Strategy Going Forward

maintain a strong financial position.

Basic Policy Regarding Shareholder Returns

medium- to long-term ROE target is 12%, thus the optimum

The Nisshinbo Group has clearly defined priority business

ROIC level is estimated to be approximately 8%. We

fields and will invest capital mainly in the Wireless andbelieve that a single target is inappropriate for the Group,

Communications and Micro Devices businesses in line with

The Nisshinbo Group promotes management focused

which has a variety of businesses, and we aim to achieve apriority investment fields. Furthermore, regardless of theon ROE with the aim of realizing sustained increases

12

Current assets:¥300 billion(Inventories:¥120 billion)(Payables: ¥60 billion)¥190 billion

Tangible andintangible assets:¥190 billion

Fixed assets:¥300 billion

Equity: ¥240 billion
Investments and otherassets: ¥110 billion

Regarding capital investment, M&A investment and otherinvestments are mainly provided by operating cash flows,of strengthening governance and improving the efficient(Receivables:¥130 billion)

If it proves difficult to achieve ROIC growth withlong-term capital, having thoroughly considered financial

by raising and managing capital Group-wide with the aim

ROE Target and B/S, P/L Assumptions for 2025

Financials

Corporate Strategy Center

increases through the stable and continuous distribution of

Although we have already undertaken attempts to improve

Working capital

Shuji Tsukatani

ratio around 30% and hopes to realize perpetual dividend

stage of infrastructure developments targeting growth. In

ESG Initiatives

Targeting ROE of 12% in 2025

Each of Nisshinbo’s businesses has reached the final

leverage than ever before to improve business profitability.

Total assets:¥600 billion

Liabilities:¥360 billion

Equity: ¥240 billion
Shareholders
equity ratio: 40%

Total liabilities and equity:¥600 billion

ROE: 12% (2025) and P/L assumptions
Comment
Net sales¥540 billion

Business Segments

through More Profitable Businesses

policy, and to reduce WACC, it is essential to utilize moreManagement Strategy

Improving Investment Efficiency

Profileconsolidated average of 8% after finding the level suitable

Current sales level, assumes continued businessportfolio realignment

Operating¥43 billion
incomeTarget operating margin = 8%NOPAT

¥30 billion

Assumed effective tax rate = 30%

ROE

12%

NOPAT ÷ equity = 12.5%

ROIC

8%

NOPAT ÷ (tangible and intangible assets + working
capital) = 7.9%
• Reduce working capital• Liquidate fixed assets (land, investment securities)

13

Interview with Takeshi Koarai,
President and Representative Director of Japan Radio Co., Ltd.

Takeshi Koarai

Ｑ As business opportunities expand, what
risks and issues are you aware of?

solutions businesses other than ship navigation, such

As a development-oriented corporate group, we havewind power generation. We will also focus on creating

contributed to the resolution of customer issues bysolutions that lead to visualization of the ocean.

profitability through the provision of solutions leveraging

Research and Development. In March 2020, he was appointed JRC President. His

technology. To this end, we must transform our way

motto is“simple is best.”He believes that, while management innovations are essentialof thinking and perspectives from the conventional

for improving profitability, the first step toward change begins with ascertaining the

focus on“tangible”to the“intangible.”Nisshinbo

underlying issues. In promoting management, he regards solutions based in wirelesstechnologies to be the essence of the Company’s business.

Holdings Inc. established an in-house Digital Businessincubation projects attracting personnel from each

Ｑ What kind of developments are you

working on in Infrastructure & Safety?

Group company. Our challenge going forward is to

In terms of infrastructure, we will continue to provide

strengthen capabilities for promoting open innovation

highly useful solutions with data collected by traffic

communications (5G) has arrived, communication

incorporating perspectives and technologies that JRC

infrastructure sensing technologies, such as trafficsystems previously available only to large

does not possess.

volume measurement and wrong-way driver detection

Business Segments

Department that has already given rise to several trial

Note: CASE is an acronym that stands for“connected,”“autonomous/
automated,”“shared”and“electric,”representing new trends in nextgeneration automotive technologies and services enabling a majortransformation in the automotive industry said to occur once in ahundred years.

Management Strategy

going forward, we must enhance business value andManaging Officer, General Manager of the Technology Division and In-Charge ofthe fiscal year ended in December 2020?

as meteorological data, marine resources and offshore

leveraging our technological strengths. However,Mr. Koarai joined Japan Radio Co., Ltd., in 1982. In 2017, he was appointed Director,

Ｑ What are your thoughts looking back on

are markets with great potential for developing

as natural disasters intensify, we will improve theimpact of COVID-19. However, the degree of impact

in the wireless communications business as the linchpin

differed in each industry; although marine systems were

supporting IoT. Despite the presence of many new

affected by lockdowns in each country throughout theentrants and other competitors, we will leverage ourfiscal year, automobiles recovered quickly, and despite

competitive advantage as an axis of growth considering

gaps between construction schedules and order timing

the tremendous business opportunities expanding

In mobility, we will promote business from theradar covering a large area is used to predict disasters,in disaster prevention systems, projects remained on

before our eyes.

perspective of providing solutions that contributemaking it necessary to consider hydraulic control via

to resolving customer issues, from tangibles suchthe installation of much radar at low cost in small riverWith 5G, in addition to nationwide public networks,

Ｑ How will you engage in future

developments in Mobility within yourthree strategic business domains?

performance of disaster prevention systems and pursue
accuracy ensuring localized responses. For example,
predicting river flooding caused by recent typhoons andlinear precipitation zones is difficult when only weather

During an unprecedented crisis, having a well-

it is possible to build local, small-scale private 5G

as automobiles, ships, airplanes, railways and otherbasins. We strive to realize solid business growth bybalanced portfolio of different types of businessnetworks. Private 4G is already being used in 4G

modes of transportation, to intangibles within entire

consistently capturing strong public-sector demand forsignificantly contributes to management stability. At

systems overseas, and we have accumulated a variety ofsystems that include transportation. The automobile

these disaster prevention systems.

present, we have business diversity but in limited areas,

expertise through the provision of private 4G networks

industry is undergoing a major transformation said tothus by further diversifying our portfolio going forward,

overseas. A fairly high level of expertise and design

occur once in a hundred years, and seeing this as an

we want to transition to a more solid structure thattechnologies are required to install base stations foropportunity, we will contribute to practical applications

will remain unaffected by the external environment.

wireless communications for which the reach is invisible

and advances in radar and ultrasound sensors in the

Furthermore, in terms of how to approach businessto the naked eye—this area is our specialty. We will

CASE* area realizing the“connected”communications

promotion and work styles, we will continue to takedifferentiate our business in terms of experience,and sensing required for“autonomous”driving. We will

Ultrasound diagnostic equipment has already grownon new challenges, promoting remote work, online

expertise and achievements to provide solutions that

also attempt to provide highly useful solutions throughinto a business with a defined scale, and the Handy

sales activities and other innovations conceived duringsatisfy customers. As various software is required to“sensor fusion,”which combines raw data collected

Echo recently developed for portable applications is

COVID-19.

build wireless communication systems, we believe

from the different sensors on cameras and radar thatbeing used for house calls and in-home medical care.

we will be able to demonstrate our advantage inmake up transportation infrastructure. There is no doubt

Wireless technologies in this field have potential as

shortening construction schedules and competitivenessthat ships will move in the direction of autonomous

services such as, for example, measuring health byby employing open innovation strategies demonstrating

operations. Compared to land-based operations, it isvisualizing muscles and fat, and in the future, we will go

integration skills combining various overseas functions

challenging to promote automation under severe ocean

beyond the medical field to expand these services to aand technologies to build large-scale systems.

weather conditions such as waves and wind, as well as

broad range of areas.

Ｑ What are the strengths of the JRC

wireless technologies at the core of the
Nisshinbo Group?

working on in Life & Healthcare?

within the constraints of ship navigation characteristics

I think many people can feel the convenience of being(ships can turn only slowly). We will continue toable to wirelessly transmit voice, images and otherexpand practical applications through the accumulation

data without the need for cables, especially whenof technologies utilizing sensing while participating intraveling. Now that the era of fifth-generation mobile

outside projects. Furthermore, the oceans themselves

14

Ｑ What kind of developments are you

15

Financials

range of industries, dramatically expanding possibilities

ESG Initiatives

and prevention on expressways. In the area of safety,

telecommunications carriers are now open to a wide

We cannot talk about 2020 without mentioning the

track, driven by firm public-sector demand.

ProfileFocusing on Solutions Utilizing Wireless
Technologies to Capture Expanding Market
and Business Opportunities in the 5G Era

Management Strategy

ProfileThree Business Domains Driving the
Nisshinbo Group Going Forward

Mobility

Having defined our three strategic business domains as Mobility, Infrastructure & Safety and Life & Healthcare,innovations.
Meanwhile, COVID-19 has accelerated the digitization of businesses and services. Promoting digitaltransformation (DX) is also an important strategy for the Nisshinbo Group. In these three strategic businessdomains, we will expand into services providing value through the utilization of digital data based on Nisshinbo
manufacturing technologies and products.

Management Strategy

While integrating technologies such as
LTE and millimeter-wave communications,
we will advance technologies including
advanced driver assistance systems (ADAS)
related to the autonomous operation of
all mobile objects on land, sea and air tocontribute to safety and the environment.

Nisshinbo will aim for further growth as an Environment and Energy Company group driven by continuousBusiness Segments

SDGs at the Core ofBusiness Objectives

Three Strategic Business Domains

Life &
Healthcare

Wireless andCommunications

●

●

●

Micro
Devices●●●

Automobile
Brakes●Precision
Instruments●

Chemicals●

Textiles●●●●Expansion into the service industry

Long-term Goal: ROE 12% (2025)

Financials

Infrastructure &SafetyESG Initiatives

Mobility

Infrastructure &SafetyThe Nisshinbo Group leverages thetechnologies and knowledge of each Group
company related to disaster prevention
systems such as weather radars, riverwater level monitoring systems and total
maritime information services, providing
solutions facilitating human safety andsecurity in a super smart society.
SDGs at the Core ofBusiness Objectives

Life & Healthcare
As an Environment and Energy Company
group, the Nisshinbo Group promotes
the development of environment- andmedical-related products incorporating thetechnologies of each Group company.
SDGs at the Core ofBusiness Objectives

16

17Strategic Business Domains

Mobility

Business Background and Merits

Solutions and Products

Amid the advance of CASE and other technological

Smartphone app

autonomous driving initiatives are under way throughout

JM-Safety

the world, starting with the lifting of a ban on“Level

J-Marine Cloud ／ J-Marine NeCST

3”conditional autonomous driving and the practical

ProfilePeripheral monitoring sensor

innovations in new areas of the automobile industry,

Information on other vessels

application of“Level 4”services enabling unmanned

Radar information

vessels are also moving toward automatic navigation.

Remote Maintenance System

Within this environment, Nisshinbo Group business(JRC RMS)

Autonomous driving

segments comprising wireless and communications, micro

Supplement/
Enhancedevices, automobile brakes, precision instruments andchemicals will collaborate on the integration of proprietaryEyes

technologies including the LTE next-generation high-Camerawave communications while contributing to safety and the

LiDAR

Mouth
Radio wave
radar

Brain

AI

Communications
equipment

Information(data)

objects whether on land, sea, air or in space. In addition to・ Enhanced sensing is required for environmental
factors (rain, sunlight, fog, snow)

mounting sensing technologies and other mechanisms on
applications by including traffic lights, highways and otherinfrastructure, as well as wireless communications on land

Guard zone monitoring

Servicesrequired forautonomous
drivingequipment status, AIS, radar, planned

Digital sea charts
Meteorological and sea

Meteorologicalroute, VTS informationand sea condition
information

condition information

Customers■ Collision/approach prediction

Future Initiatives
Marine BusinessCommunications Equipment
Business

Supply targets

Main customers

Production method

Solutions, systems,
devices, services

Shipbuilding companies,
shipowners,
government agencies,
public organizations

Prospects
Make-to-order

Automobiles, construction
equipment manufacturers, carriers

Repeated mass
production

Devices, modules,
components

Business withdrawal
JRC Mobility Inc.

Indirect (personnel, procurement, etc.) andtechnological collaborative efficiency

Devices, modules,
components

Automobiles, construction
equipment manufacturers, carriers

Repeated mass
production■ Alarm notification■ Weather information
Completely
different

AIS ： Automatic Identification System VTS ： Vessel Traffic Services

Strongcustomerdemands(Industryspecific)■ Protecting Safety on the Sea• Business management: Specialized and integrated system ▶︎ Flexible and focused organization• Management/Decision-making: Simple Process ▶︎ Quick judgements/Investment potential• Achievements and responsibilities: Clarification of Company performance ▶︎ Clarification of profitability and costs
1 Maintain independence with all functions required for the Mobility business
2 At the senior management level, promote integration and exchanges enabling JRC Mobility

to share knowledge and resources with JRC
Sensing technologies such as cameras, LiDAR, radio wave

resolving customer issues. Our 3D recognition technologies

radar and the utilization of AI, all of which are indispensable

have already earned a high reputation worldwide for theirfor autonomous driving, must accurately read information

ability to facilitate autonomous movement without malfunction

such as speed, location and direction of movement, while also

regardless of the weather. Nisshinbo will utilize AI to incorporate

being sufficiently robust to endure rain and sunlight as well as

the predicted movement of people and objects, which will beharsh weather conditions such as fog and snow. Furthermore,commercialized as a service. At sea, where automated navigationconsidering communications between moving objects and thetakes place under harsher weather conditions than on land,transportation infrastructure, it is essential that we increase

Nisshinbo will participate in external projects and dig deeply

communication equipment sophistication and capacity. In

into technologies utilizing sensing linked to automated navigation

addition to the development and provision of equipment

services via the cloud, while at the same time aiming to create

contributing to the automation of individual moving objects,

solutions in areas outside vessel navigation using meteorologicalincluding entire transportation and other systems, the Nisshinbo

data and marine resources to“visualize”the sea.

Group will continue to provide solutions that contribute toAdministrative vessels■ Earthquake/tsunami news flash

Navigation
planning

The Nisshinbo Group sells marine wireless communications

charts (ENCs) and can be linked to J-Marine Cloud, contributing

equipment, marine radar and other navigation equipment, bridge

substantially to voyage planning efficiency and optimization.

and other systems to commercial and fishing vessels globally.

Realizing wireless communications between vessels and utilizing

Specifically, we have a large market share of more than 30% in

the data aggregated therein will lead to selecting the safest andnavigation equipment for large commercial ships, supporting themost efficient routes for autonomous navigation.

development of global shipping. Furthermore, in areas where

The J-Marine Cloud service is available to all shipping

navigation is difficult, Vessel Traffic Services (VTS) that centrallycompanies, eliminating the need for them to develop their own

control traffic have been installed in maritime safety centers andvessel monitoring systems. The service includes the Smart Ship

many communications base stations in Japan and overseas toViewer (SSV), which makes ships visible. It also helps to reduce

provide safe shipping route information, realizing safe navigation inmarine accidents involving small vessels such as pleasure boats

ports and coastal areas.

and warns of approaching vessels, earthquakes, tsunamis andIn addition to the provision of products, we operate J-Marine

Financials

Solutions Business18(Smart Ship Viewer)

Vessel position, measurement data,and in the air for marine operations.

Nisshinbo HD 100%

Vessel visualization service

ESG Initiatives

・ Advances and large bandwidth are required forcommunications between mobile devices and with
infrastructure

individual moving objects, Nisshinbo will expand practical

J-Marine Cloud

Information sharing between
ship and shore

Collision prediction warning,・ Must sense information including accurate speed,
position and direction of travel

driving) related to the autonomous operation of all moving

One-stop services

Big Data/AI

environment by refining technologies such as advanced
driver assistance systems (ADAS:“Level 2”autonomous

Satellite communications

RMS

Business Segments

speed mobile communications standard and millimeter-

Ears

Management Strategy

driving. This trend is not limited to automobiles, as ocean

other sudden changes in sea conditions through the JM-Safety

Cloud, which provides advanced shipping information such as

smartphone app for individual users. The JM-Watcher II app has

weather conditions and vessel positioning information obtained

already been downloaded more than 40,000 times, and in April

from VTSs in real time online, which is used for optimal information

2021 we released JM-Safety, which has an added a function (option)

analysis by vessel operators. Onshore, we provide advanced

that detects overboard falls supporting the rapid notification ofoperational support by sharing information among vessels

overboard falls while at sea. With ocean safety protection services

while obtaining real-time information on the position, engine,offering three types of safety-overboard fall detection, vessel

navigation equipment and surveillance images of managed vessels.

position sharing and safety watching-we are promoting the

Furthermore, provision of the groundbreaking J-Marine NeCST

visualization of vessel navigation and all types of marine information

vessel operation support service, which provides large displays,

to ensure safety and security while at sea and eradicate marine

allows information to be handwritten onto electronic navigation

accidents.
19

Strategic Business Domains

Mobility

Solutions and Products■ Driving Simulators
With revisions to the Road Traffic Act in 2020, the ban on Level

Visual environment
reproduction equipment

and performance through the fusion of different types ofaccidental intrusions on highways and automated systems forsensors. In processing raw information collected from different

port monitoring operations at sea by equipping cameras with AI

sensors within transportation infrastructure before fusion, wefunctions. In addition, using radar to monitor pedestrian traffic,

will improve accuracy leading to the provision of highly useful

we have facilitated safe crosswalks by extending the length

solutions in transportation and other fields. We have alreadyof green lights and using 4D laser sensing, contributing to theachieved practical application at the technological development

prevention of collisions and accidents in warehouses and otherlevel, which will lead to concrete business developments in thefacilities. Sensor fusion is an effort to improve functionality

future.

Wrong-way entry detection

vehicles requires development assuming all road conditions,■ Supports autonomous
driving (Level 3)

the use of driving simulators is essential for evaluating reliability
and safety, particularly in dangerous situations. Nisshinbo has
worked on multiple driving simulators in the past, and going
forward we will prepare to ship driving simulators supporting■ Two simulators in thesame space/scenario
facilitate dual driving

Level 3 conditional autonomous driving. The distinguishingfeature of the Nisshinbo Group driving simulator is that its

Translational
movement
equipment
19m

Business Segments

The development of autonomous vehicles requires assumptions for all roadconditions.
Development and evaluations in actual environments require an enormous
amount of money and time, making the use of simulators extremely effective
in terms of reducing the time and costs required for development.
Simulators are indispensable for evaluating reliability and safety inparticularly dangerous conditions.

the visual environment, we provide a high-resolution andsimulators in the same space and scenario.

Prevents successive wrong way entry and driving
through high-speed entrances and exits!

6-axis rocker

Autonomous driving simulator:

In addition to adopting a 360-degree curved organic EL for
high-brightness environment enabling the use of dual driving

Entry and approach detection systemusing cameras + millimeter-wave radar

Turntable■ Uses a 360-degree
curved organic EL screen
High-resolution andextremely bright visualenvironment

simulated driving environment uses a six-axis oscillating device.

Harbor offshore surveillance

Driving environment
reproduction
equipment

7m

Management Strategy

The Nisshinbo Group has been working on systems that detect

been lifted in Japan. Although the development of self-driving

Unknown vessel approaching!
Millimeter-wave
radar/AI camera

Incursion line

Sensor fusionAI
processor

Entrance

Warning
display

Exit

Detects pedestrians, bicycles
and mopeds!

Detects vehicles entering or
driving the wrong way!

Preventing accidents on expressways

Autonomous harbor monitoring operations

Radar

Camera + AI

LasersFusing different sensor types
Crosswalk surveillance

4D sensingof fields. Japan Radio Co., Ltd. is developing a global navigationneed to be more accurate than ever before. Today’s GPS systems

satellite system (GNSS) chip that receives signals from the Quasi-

are accurate to within 10 meters. Replacing those systems with

Zenith Satellite System (QZSS). The GNSS receiver chips will playhigh-precision positioning technology that improves accuracy to aa vital role in realizing new high-precision positioning services. To

few centimeters would enable autonomous vehicles to determine

promote the new services overseas, Japan Radio in June 2017

their current road lane using only satellite positioning. That kindbecame one of the founding shareholders in Global Positioningof technology is likely to be in high demand from a wide range

Augmentation Service Corporation (GPAS).

How GPAS Services Will Work
1

How GPAS Services Will Work

2

Using the data, errors in satellite orbits and clocks areaccurately calculated.

3

Corrected data is transmitted to users via QZSS.* (Data
distribution via the Internet is also possible.)

4

Transmitted data is used to calculate the position of theuser, enabling positioning services accurate to within a few
centimeters.

QZSS

2

3

5

GNSS base station

GPAS/
MADOCA ※1* QZSS: Quasi-Zenith Satellite System* MADOCA: Software under development at the Japan Aerospace Exploration
Agency (JAXA) to accurately estimate satellite orbits and clocks

4 Internet■ Copper-reduced and Copper-free Friction Materials

Intersection
surveillance sensors

Radar

In order to realize mobility autonomous driving, positioning services

Financials

Transportation field applications■ High-precision Positioning Services
ESG Initiatives

Wrong-waydrivingWrongway entry

The automobile brakes business, one of the Group’s coreand copper-free friction materials, which have attracted firmbusinesses, manufactures brake pads, brake linings and othersupport from automakers. We forecast strong annual growth

friction materials. Subsidiary Nisshinbo Brake Inc. produces NAO

in shipments of the new friction materials, helping to further

friction materials, which are used mainly in Japan and the US.

increase our share of the friction materials market.

US environmental regulations, effective from 2021, will

Cameras(image recognition)prohibit the sale of new friction materials or vehicles fittedwith friction materials that have a copper content of more than
5%. From 2025, stricter rules will come into force that further
reduce the limit on copper content to 0.5%.

Traffic signal control system

Efforts include extending green lights to facilitate safe intersections

20

Collision accident prevention in warehouses and other locations

Profile3 conditional autonomous driving on public roads has finally■ Sensor Fusion (3D Verification Technologies)

In
development

Boarding equipment

7m

Nisshinbo Brake was one of the first in the industry to
respond to the new rules by developing copper-reduced

Brake pads

Brake linings

21Strategic Business Domains

Infrastructure & Safety
Solutions and Products

In 2020, Japan Radio(JRC) obtained a license from the Ministry

been influenced by climate change, and the intensification ofof Internal Affairs and Communications for an experimental test

Providing regional disaster prediction information

disasters such as torrential rainstorms and landslides havestation that supports the 5G sub-6 GHz band and will proceed

become serious social issues. The Nisshinbo Group contributeswith local 5G demonstration experiments in the future.

to the advanced detection and avoidance of natural disasters

Separate from the 5G services deployed by mobile carriers,

through disaster prevention systems including weather radar

local 5G is a 5G service that companies and local governments

and river water level monitoring systems in collaboration

provide themselves in buildings and other designated areas

with the Wireless and Communications, Micro Devices andand that are expected to help improve productivity in factories

Chemicals business segments. Furthermore, we are promoting

and resolve local issues.

safety management in buildings, plants, factories and even large

Another role of the infrastructure business is to provide
highly useful solutions for the data collected by traffic

generation mobile communication systems (4G) overseas

infrastructure sensing technologies such as traffic volume

and fifth-generation mobile communication systems (5G) in

measurements and the detection and prevention of wrong-way

Japan. Utilizing the technologies and knowledge possessed

driving on expressways.

by each Group company to detect anomalies such as aging

In terms of safety, we are improving disaster prevention

highways, Nisshinbo provides solutions to realize human safetysystem performance while firmly establishing disasterand security in a super smart society. Supported by stableprediction systems to address localized disasters that are

public-sector demand, we will expand from equipment salesdifficult to predict using only weather data covering a large

to providing service solutions that utilize data obtained fromarea and will contribute to more precise hydraulic controls by

equipment, centered on the newly established Digital Businessinstalling low-cost radar in the basins of small rivers.

Torrential rainfall

Risk aversion actions

Synthetic
aperture radar

High-speed scanweather radar

Portable satellite
communications
terminal
５G/LTE

Landslide

Mine and dam
management…

Promotion Office.

Riverstransformations

JRC changes and diversification

AI/IoT/Cloud

Products
Physical

DigitalEarnings

AI and analysis

Data management

Earnings

Customer's businessBusiness platform
Applications

Customer value
Solutions

Earnings

Wireless communications
and sensors

base

JRC and customer co-creation

ServicesManagement

Note: Create solutions with optimal platform configuration
Escape not-invented-here syndrome × partners × open innovation

River flooding

New earnings

Customer changes and diversification

Biz modeltransformation

Traditional Biz model・Evacuation guidance
based on disasterprediction information

Financials

From provider of equipment to provider of solutions
・IoT (systemization, digitization)
・Creating value from data (service offerings)

・Dam discharge equipment
controlled by water level
predictions

Interruptionof public
circuits

Shift to high value-added businesses
Business

・Minute displacement
detection regulates
mountain access

ESG Initiatives

Residential

Transformation to a profitable business structure through digital business

22

Mountains

Business Segments

dams among other structures by establishing reliable fourth-

Disasterprevention andmeteorologicalservicesManagement Strategy

Future Initiatives

In recent years, many natural disasters are said to have

ProfileBusiness Background and Merits■ Disaster Prevention and Weather Services
The Nisshinbo Group provides equipment and systems that
protect people from natural disasters such as river floods,
sediment-related disasters, tsunamis and storm surges, as well asa short period. For this reason, we are developing weather radar

the water level gauges, rainfall meters, telemeters and alarms thatsuccessor models for the practical use of phased-array weather

remotely manage them. We are installing devices such as sirens

radar. This radar system combines several small radar on a planeand cameras, and networking each device with communication

to reduce blind spots, scans the entire sky in 30 seconds andtechnologies, to build dam management and other systems.

observes cumulonimbus clouds three-dimensionally and at highIn addition to monitoring rivers and other disaster prevention

speed to quickly predict localized heavy rainfall. This enables thetargets, we are developing a wide range of solutions in Japan andrapid recognition of torrential rainstorms and tornadoes caused

overseas ranging from disaster prevention combining weather

by cumulonimbus clouds that have been increasing in recent

information and earthquake information obtained from weather

years. We are also working on the development of quantitative

radar and other sources to disaster prevention information

precipitation conversion, which is more difficult to observe, andcommunication systems that notify residents of danger. Nisshinbo

particle discrimination applied to rain, snow and hail. Nisshinbo

weather radar is widely used in meteorological and rainfall

will continue to develop next-generation weather radar with high-observation systems, including those operated by the Japan

speed recognition of torrential rainstorms and tornadoes.

Meteorological Agency and the Ministry of Land, Infrastructure,

In addition to natural disasters, roads and other aging social

Transport and Tourism, as well as overseas meteorologicalinfrastructure pose a risk of becoming major factors in the event

agencies. Conventional weather radar requires approximately fiveof a disaster. The Nisshinbo Group will leverage solid businessminutes to complete one observation and is unable to capture a

relationships with government agencies on the full-scale launch ofstereoscopic image of cumulonimbus clouds developing rapidly ina social infrastructure maintenance business.
23

Strategic Business Domains

Infrastructure & Safety
4G/5G Business Strategy
Profile■ Basic Concept: Business Strategy
With the arrival of fifth-generation (5G) mobile networks, the mobile■ 2014 Full-scale development (collaboration with global development partners)

Basic Concept

network market comprising public networks will be expanded

2014

expertise in commercial wireless and other self-deployed network■ Low Cost: Small scale and scalable platformbusiness development, the Nisshinbo Group will continue to■ Specialized functions: Broadcast/multicast, autonomous/
flexible area development

provide high-value-added solutions customized for self-deployednetworks as its basic business concept even in the 5G era. The■ Mobility: Core network integrated portable solutions (One-BOX)

essential value this concept offers is threefold: compact, low-cost

Business Strategies

and companies that create and operate self-deployed networks;
functions including high-quality communications, broadcast

Overseas

overseas self-deployed network introduction achievements throughlocal 5G demonstration experiments to lead the market.

Target area

4G（LTE） Europe, Middle East, Africa (EMEA)
Americas (United States)

Japan
From overseas
to domestic

4G
（LTE）

2020

2021

2022

2023

Middle East Public Safety Demonstration Experiment
Domestic WISP delivery

Ministry of Internal Affairs
and Communications
Project participation

Delivery to nuclear power plant in Germany
Delivery to European coast guards
European disaster management field trial
Asia Public Safety Demonstration Experiment
Delivery to the Gabon mine

5G + 4G（LTE）
5G

R&D Phase 1

Business trials
PoC Phase

R&D Phase 2

Business Phase

Accelerate to2025
Businessdevelopment
phase

5G + 4G（LTE）
5G

Full-scale LTE development

ESG Initiatives

market is expected to arise in the 5G era, Nisshinbo will leverage

2019South American disaster management field trial

base station and center equipment that is both integrated andextension of LTE. In Japan, where a large self-deployed network

2018

Public safety delivery in Asia

■ Overseas： Expansion from 4G (private LTE) to 5G

distribution and group calls unique to self-deployed networks; and4G LTE network markets, we assume migration to 5G, which is an

2017

NEDO Project
participation

Kingdom of Tonga
Commercial Trial
implementation

Advance 4G overseas, test 5G in Japan■ Domestic： Local 5G testing and deployment of usage cases overseas

portable. Overseas, where we are already developing self-deployed2016

MWC 2015(Barcelona)
Exhibition

LTE International Business Group established2025 onward■ Overseas Developments: 4G Achievements■ Markets: Public safety, mining, offshore rig, WISP, etc.
■ Strategies:■ Results: Europe, North America and South America
One-BOX Core-Network Integrated, Portable Base Stations

Demand for private LTE (self-deployed LTE) is growing

processor, Comilog is the world’s second largest producer of

exponentially throughout the world. With experience andmanganese ore. The company adopted a high-speed, stable

expertise as a specialist in the wireless communications field,

and secure form of LTE communications as part of its efforts

the Nisshinbo Group has accumulated a successful track record

to digitize operational processes in the Moanda mine. The

overseas since full-scale development began in 2014. In OctoberNisshinbo Group is contributing to the expansion of Comilog’s2020, we shipped private LTE systems to Gika Telecom, a newmining operations through the provision of comprehensive

French telecommunications network operator, and Comilog, aprivate LTE solutions, including LTE base stations, subscriber

mining equipment company in the Central African Republic ofmanagement devices and network management equipment.

Gabon. As part of the Eramet Group, a French mining and metal■ Markets: Industrial IoT, disaster prevention solutions,digital services, etc.
■ Strategy: Develop markets through trials conductedwith customer partners(demonstration base established in December 2020)

Nagano Plant Field
Trial System

5G base station
Wirelesscomponents● WISP： Wireless Internet Service Provider

Ceiling● Offshore rig(including police and fire departments)

Fiber optics
Wirelesscomponents

5G
terminal
Experimental test
base station

Fiber optics● Mining

Demonstration

1st floor hall, Advanced
Technology Center

24

5G base station Experimental test station
5G signal
processing
serverfloor

with the verification of 5G system performance at the JRC Nagano
Plant and links to various digital applications. In addition to thedisaster prevention and mitigation markets in which the Group
specializes, Nisshinbo will cultivate new markets for IoT solutions
that include the industrial field. We will conduct demonstration
experiments with prospective Japanese customers while mutually

Demonstration lab floor

5G corenetwork
server● PS: Public safety

In the Japanese market, beginning with the acquisition of a licensefrom local 5G demonstration experiments, Nisshinbo is proceeding■ Demonstration test objectives
・ Ascertain 5G system characteristics
・ Demonstrate use of local 5G for various applications■ Demonstration test overview
・ Sub-6 GHz band (Sub-6)
・ Stand-alone (SA) configuration (no 4G required)

Application■ Japan Local 5G

Wirelesscomponents

verifying efficacy and business impacts to greatly expand thepotential of this business. Local 5G is also an area in which many
competitors including leading Japanese electronics manufacturers
have already entered. The Nisshinbo Group will attempt todifferentiate itself from the competition by focusing on compact,

5G
terminal

Experimental test base station

low-cost system configurations developed in overseas LTE as one
means of seizing this tremendous business opportunity.

25

Financials

・System integration utilizing technology ecosystem
・Wireless customization (band compatible, area building)・All-in-one solutions from core networks to terminals

Business Segments

systems that are easy to implement even by government agencies

2015

Management Strategy■ 2016 Public project ▶︎ 2017 PoC Phase ▶︎ 2018 Business Phase

Private Network Solutions

to the world of local 5G and other self-deployed networks. With

Strategic Business Domains

Strategic Business Domains

Infrastructure & Safety

Life & Healthcare■ Transport Infrastructure
The Japanese government is rapidly working to create safer transport

Intersection safety service
1 ITS roadside terminals

with the aim of building the world's safest road network by 2020. As

wirelessly connected to theDSSSpart of that push, Japan Radio is developing a driving safety support
system (DSSS). The system is designed to reduce traffic accidents
and improve driving efficiency by using sensors to detect pedestrians

equipment3b2

a <vehicle-road/vehicle-vehicle>cRight-turn collision warning
systemdriving in the wrong direction. Japan Radio’s detection equipmentb <vehicle-road/vehicle-vehicle>

uses radar-sensing technology originally developed for marine andLeft-turn bicycle collision
warning systemdweather applications. Compared with conventional camera-based
priced, and perform better at nighttime and under difficult weather
conditions, such as fog. They are also less affected by glare and colorc <vehicle-road>

DSSS：Driving Safety Support System

Pedestrian crossing collision
warning systemd <vehicle-road/vehicle-vehicle>

contrast issues.

Head-on collision warning
system

The markets for in-home and home-visit nursing care, seniormicro devices, precision instruments, chemicals, textiles andfacilities, nursery school monitoring and telemedicine in regional

real estate businesses collaborate by applying the distinct

healthcare are expanding due to the graying of society, rural

technologies and expertise of each business to promote

depopulation, childbirth at older ages, the social advancement

the development of environmental- and medical-relatedof women and other societal changes. Furthermore, theproducts. Recently, amid the spread of COVID-19,“remote”

increasing risk of heat stroke due to global warming andand“contactless”needs have been rising in various fields.

higher temperatures is driving new demand for worker health

The Nisshinbo Group contributes to people’s everyday lives

management monitoring. To meet these demands, we willby developing products in the fields of medical equipment

provide value in the monitoring market with Nisshinbo Groupand long-term care that leverage its strength in wirelesssensors and edge devices. For example, by visualizing thecommunication technologies.

muscle and fat in human bodies, we can ascertain health

The handheld ultrasound diagnostic device launched in
December 2020 by leading medical device manufacturer
Terumo Corporation is a good example of fusing Group wirelessconditions, and there is potential for services that provide
information value leading to increased health.

Business Segments

equipment, the company’s products are compact, competitively

At the Nisshinbo Group, the wireless and communications,Management Strategy

started supplying traffic counters and systems to detect vehicles

3 Radar-based DSSS detectionaand other dangers and transmit warnings wirelessly to drivers.
Using its existing radar-sensing technology, Japan Radio has also

2 Onboard terminals

1

Future Initiatives

Through the utilization of these technologies and thecommunication technologies and medical equipment. With adevelopment of solutions, the Nisshinbo Group will seek

focus on healthcare and nursing care, we will expand businessto develop new and valuable services in the medical andby transforming Nisshinbo technologies into solutions.

healthcare fields.

■ Alertmarker+
The service is increasingly being adopted for event halls, subways

information such as area-specific messages, evacuation orders andand other facilities, spurred by growing use of digital signage.

disaster information to digital signs and other display equipment.
The service automatically sends J-Alerts and disaster information

Core
UltrasoundTechnologies

Image processing technology for ultrasound diagnostic equipment
ImagesUltrasound image processing
technology (Intravascular)

using existing displays in municipal offices, public halls, hospitals,

Blood vesselschools and other facilities where people gather. Alertmarker+ iseasy to access with the Alertmarker BoX add-on, which connects
to displays via an HDMI cable. Existing facilities require no other

Ultrasound probe

Abdominal gap
Image picture

Financials

external connection, making the service resilient to cyberattack.

Alertmarker+ in use
in Tokyo Station

Portable ultrasoundanalyzer

Fuel Cell Products
The Nisshinbo Group is working to drive uptake of fuel cells,

and other infrastructure, but FCVs offer a number of potential

which use hydrogen as the energy source. Hydrogen fuel cells areadvantages, including short refueling times and high energy density.

the ultimate clean source of energy, emitting no CO2 emissions

Hydrogen fuel cells are already in use for commercial vehicles suchduring use. In Japan, fixed fuel cells are used widely for houses,

as buses, trucks and forklifts, which can be refueled relatively easily,commercial facilities and other sites, but are yet to take off inand there is rising interest in potential applications such as trains

mobility applications.

and large drones.

Ultrasound oscillator and transducer technologies

Wireless technologies
System to monitor
people who requirenursing care

Transducers

A number of issues currently stand in the way of fuel cellvehicle (FCV) uptake, such as a lack of hydrogen refueling stations
ID
transmission

0.5mm■ Bipolar Plates for Fuel Cells
Carbon bipolar plates manufactured by the Nisshinbo Group have a high market share in fixedPiezoelectric (PZT) materials

PEFCs*1 for residential and commercial use, such as the Ene-Farm system. Our carbon bipolar plates

Tag
DSF-214

Opening

are not only lighter than metal versions, they are also easier to mold into the required flow channel

Reader
DRF-161

shapes and are more resistant to corrosion, helping to improve the performance and durability offuel cells.
Nisshinbo has also invested in Canadian fuel cell maker Ballard Power Systems Inc. and is working
with the firm on joint research projects. Our carbon bipolar plates have already been adopted for a

PZT-based ceramic material

Ballard fuel stack used in forklifts*2. We are now working to rapidly ramp up production amid recent

Porous PZT material

1-3 composite
PZT material

growth in demand for fuel cells used in prototype FCV buses and trucks.
*1 Polymer electrolyte fuel cells: Significantly lower operating temperatures than solid oxide fuel cells (SOFCs) mean PEFCs are likely
to become the main type of fuel cell.
*2 Fuel cell forklifts are gaining ground, especially in North America, as their small areas of operation make it easy to install refuelinginfrastructure.

26

ESG Initiatives

Japan Radio provides a service called Alertmarker+ that sends

Profileinfrastructure using information and communication technology (ICT)Business Background and Merits

Bipolar Plates for Fuel Cells

27

Strategic Business Domains

Life & Healthcare

Overview of Business Segments

Solutions and Products

For more than 60 years since the development of ultrasonicmicro devices, automobile brakes, precision instruments, chemicals, textiles and real estate. Nisshinbo

diagnostic equipment in 1960, Nisshinbo Group company Ueda

supplies high-value-added products that meet customer needs, driven by innovation born out of businessJapan Radio Co., Ltd., has contributed to the development ofcollaboration and portfolio reorganization that has kept the Group aligned with changing needs.
Net Sales Composition by Segment

and manufacturing, creating a medical business based on
Othersthe past cultivation of the world’s top-level ultrasound andwireless communication technologies. Within this environment,¥21.5 billion

in December 2020, we launched production of a proprietarily

Real Estate

4.7%

developed handheld ultrasound device with high-quality images¥20.2 billion 4.4%that is sold by leading medical equipment manufacturer Terumo

Textilesultrasound device has a simple configuration that connects theprobe and tablet display (iPad Mini) via a Wi-Fi connection.
In pursuit of user-friendliness, the device is small and easy to

Terumo Porta Sound(Manufacturer anddistributor: Ueda Japan
Radio Co., Ltd.)

Chemicals

Display screen in color mode
(Color-coded display inaccordance with blood flow
direction)¥9.5 billion

2.1%

Wireless and Communications¥144.3 billion
Net Sales¥457.0 billion(Period ended December 2020)

13.4%

Automobile Brakes

Precision Instruments¥114.8 billion¥51.4 billion 11.3%

carry, quick and simple to maintain and features high-quality

Micro Devices¥61.1 billion

31.6%

Business Segments¥33.9 billion 7.4%

Corporation as the“Porta Sound”wireless ultrasonic diagnostic

Management Strategy

ultrasonic diagnostic equipment through contract development

device for healthcare institutions across Japan. This handheld

ProfileThe Nisshinbo Group is made up of seven distinct businesses — wireless and communications,■ Ultrasound Diagnostic Imaging

25.1%

color images. It was designed so that medical exams andwell as in home medical care.
* iPad mini is a registered trademark of Apple Inc. in the United States andother countries.
* Wi-Fi is a trademark or registered trademark of the Wi-Fi Alliance.

Wireless and Communications P.30
Main business areas
Marine systems ▶ Marine radar and communications equipment
Engages in the solutions business (including disaster prevention systems andweather radars), as well as marine systems and mobility businesses.

Solutions and specialized equipment▶ Disaster prevention systems and weather radars
ICT and mechatronics ▶ Power supplies, Large-format copiers
Medical equipment ▶ Probes for ultrasound diagnostic equipment, oscillators for catheters

Carbodilite is a high-performance polycarbodiimide-based plastic material developedby the Nisshinbo Group. We supply Carbodilite in water-based, oil-based and powder
forms, and as an additive in adhesive agents. Due to its unique highly reactive, lowtoxic profile, Carbodilite is blended with coatings, inks and various plastics (polyesterbased plastic, biodegradable plastic, polyurethane elastomer and others) to improve thedurability, adhesiveness and other properties of secondary products.

Micro Devices P.33

Chemicals P.40

Main business areas
Working to expand sales ofanalog semiconductors and otherelectronic devices, supported by
microelectronics technologies.

In the automotive, heavy-duty anti-corrosion coating, construction coating and ink

Financials

Mobility ▶ GPS receivers, ITS equipment for vehicles■ Carbodilite

Main business areas
New Japan Radio▶ Semiconductor devices and SAW filters
Ricoh Electronic Devices▶ Power management ICs, etc.

Manufactures a range of highly
promising products in theenvironmental and energy fields,such as Carbodilite, a modifier
for biodegradable plastics andwaterborne resins, and bipolar
plates for fuel cells.

Carbodilite high-performance chemical additive
Thermal insulation products
Bipolar plates for fuel cells
Fine carbon products

industries, tighter regulations governing volatile organic compounds (VOC) and efforts
to reduce environmental impact are spurring demand for Carbodilite, which is a highly
safe, water-based additive that can reduce required temperatures in drying processes.
Also, in Europe and other markets where rules on the use of non-degradable plastics arebeing tightened, demand for biodegradable alternatives is growing strongly. Carbodilite

Automobile Brakes P.36

Textiles P.42

Main business areas

Main business areas

The Nisshinbo Group is the world’s
leading maker of brake frictionis spurring wider adoption of biodegradable plastics, as it improves durability withoutmaterials by market share; now

affecting biodegradability.

expanding its presence as a true

It is already used in a growing range of applications, including multi-use film for
agricultural applications, industrial materials, food packaging and printed circuit board
adhesives.

global supplier using its network
covering key markets worldwide.

Mainstay business is products

Shirtsmade from natural cotton; supplies▶ Dress shirts, casual shirts and fabrichigh-quality“Made by Nisshinbo”
dress shirts, uniforms and otherTextilesproducts to markets worldwide.

▶ Uniform fabric and casual fabricPrecision Instruments P.38

Real Estate P.44

Main business areas

Main business areas

Manufactures molding products forhome appliance and automotive
applications and supplies
processed precision automotive
parts and customized production
equipment for customers
worldwide, primarily in Asia.

28

Friction materials▶ Disc pads and brake linings

Molding products
Precision parts processing including parts forelectronic brake systems (EBS)
Customized production equipment

ESG Initiatives

diagnoses can be easily performed in hospitals and clinics, asProcures funds to support the

Sales

Nisshinbo Group’s growth strategy▶ Housing lots

by effectively utilizing idle plantsites and other real estate assets

Leasingarising from business restructuring.

▶ ARIO Nishi Arai and other properties

29

Overview of Business Segments̶Wireless and Communications

ProfileWireless and Communications
Business Results and Strategy
impact of a typhoon in October 2020 with an increase in

In 2020, the wireless and communications business reported

sales of equipment and transducers increased amid risingsales of ¥144,312 million, down 5.2% year on year, anddemand for equipment due to the spread of COVID-19.

segment profit of ¥2,575 million, down 37.2% year on year.

However, demand declined sharply due to changes in the

In marine systems, sales declined because of intensifying

Management Strategy

Summary of Financial Results for 2020

sales of analysis equipment, from the second half onward,

medical field, including mounting pressure on hospitalmanagement due to a decrease in the number of patients

due to fewer ships being built, socioeconomic stagnation

visiting hospitals and testing facilities, resulting in lower sales

caused by COVID-19 and fewer sales of equipment for small

and profits for the full year.

and medium-sized vessels overseas as well as equipment forIn addition, the Japan Radio communications equipment

retrofit projects due to a decrease in the number of vessels

business has been gradually transferred to JRC Mobility. In

in operation, but cost reductions helped narrowed theseJanuary 2020, we completed the transfer of the Intelligent

losses.

Transport Systems (ITS) business, which handles GPS
receivers and ETC on-board units, and in January 2021,

on lower sales of in-vehicle-related equipment caused by thethe commercial radio business was transferred. Nisshinbo

impact of COVID-19.

acquired the German subsidiaries RBI GmbH and LEAS GmbHas we look to expand and grow the mobility business, which

postponement of construction on overseas projects due tois a strategic business area. As a result of this organizational

COVID-19 and the completion of large projects for aerospace

restructuring, the Japan Radio communication equipment

and meteorological systems, water and river information

business will be constructively liquidated, and JRC Mobility

systems performed well and public demand for municipal

began handling the mobility business in 2021.

Financials

In solutions and specialized equipment, despite thedisaster prevention systems remained firm, resulting insales at the same level as in the previous fiscal year. Profits
increased due to the outsourcing of processing expenses andother cost-reduction efforts.

Business Strategies for 2021
Market Environment and Business Strategy

In ICT and mechatronics, despite sales contributions

In the wireless and communications business, we will shift

from NJ Component Co., Ltd., which became a consolidated

to management that emphasizes sales scale expansion andsubsidiary in July 2019, sales and profits declined on lower

improved profitability by revising current business growthsales of mechatronics equipment in the U.S. and European

strategies, identifying and disposing of low-profit businesses,

markets due to the impact of COVID-19.

and promoting business portfolio reforms that include taking

In medical equipment, although we offset a decreaseon the challenge of high-profit businesses.

in sales of ultrasound diagnostic equipment caused by theJapan Radio Co., Ltd. / JRC Mobility Inc.

Related SDGs

Net Sales

The wireless and communications business supplies communicationand navigation equipment with world-leading reliability to users in the
shipping sector. It also provides various disaster prevention systems,
such as dam and river management systems and weather forecasting
systems. In addition, JRC Mobility Inc., which was established in2018 to develop the Group’s business in the mobility field, is pushingahead with new products that will help realize autonomous driving,drawing on ITS* products and other existing automotive products
transferred from Japan Radio Co., Ltd.
* Intelligent Transport Systems: Systems that use data processing technology to solve traffic
issues such as accidents and congestion

30

P.14
P.31

Interview with Takeshi Koarai, President andRepresentative Director of Japan Radio Co., Ltd.
Business Results and Strategy（millions of yen)Segment Profit

19.12

20.12

Marine systems

34,91632,509Marine systems

Communications equipment

16,802

7,669

Communications equipment

Solutions and specialized equipment

68,81565,607

Solutions and specialized equipment

ICT and mechatronics

19,831

20,708

ICT and mechatronics

Medical equipment

9,170

8,064

Other businesses

2,646

3,166

JRC Mobility
Eliminations, retirement benefits and other adjustments
Total（millions of yen)

19.12

20.12

(1,171)

(303)

1,872

200

2,087

2,683

372

(237)

Medical equipment

757

456

Other businesses

(217)

(7)

JRC Mobility

(397)

(571)

796

353

4,100

2,575

132

7,857

(104)

(1,271)Eliminations, retirement benefits and other adjustments

152,213

144,312Total

ESG Initiatives

In communications equipment, sales and profits declined

Business Segments

price competition affecting equipment for new-build vessels

31Overview of Business Segments̶Wireless and Communications

Overview of Business Segments̶Micro Devices

Micro Devices
Marine Systems

market share by cultivating new customers, and at theIn marine systems, we will attempt to break away from low

same time, thoroughly improve product development andprofits by radically revising the profit structure and moving

production efficiency. In mechatronics, we will accelerate

into the black. We will continue to expand our LCM businessbusiness domain expansion to industrial equipment throughin the highly profitable aftermarket, maintain and expand ourthe automation and digital transformation of production

market share and increase orders for equipment retrofits andequipment by fusing ICT and technology.

repair work. In the field of small and medium-sized vessels,
we will strive to strengthen river market products, sales andMedical Equipment

services, while expanding market share by utilizing sales

In medical equipment, we will expand the high-value-added

channels to the European market, which is the strength of

portable ultrasound business by strengthening marketing andAlphatron Marine. In addition, as a new initiative in the digital

establishing sales channels. Furthermore, we will focus efforts

field, we aim to expand shipping support services for safeon wireless technologies for medical use, such as utilizing ourvessel operations through ship-to-shore networks centeredproprietary wireless technologies in medical equipment, andon the Smart Ship Viewer onboard information sharing service

aim to enter the fields of prevention, prognosis, diagnosis andannounced in April 2020.

treatment support. In addition, we will expand and extend the

Solutions and Specialized Equipment

medical equipment business by creating digital businesses indiagnostic fields such as portable ultrasound equipment. We

While steadily capturing existing business demand andwill improve profitability through the proprietary branding ofenhancing profitability, we will focus efforts on expanding

these growth strategy field products and the conversion to abusiness domains through expansion into adjacent fields

manufacturing and sales business structure.

and promoting digital businesses that utilize ICT and IoT. In
the public sector, we will continue to secure profits through5G and LTE Initiatives

initiatives under a five-year plan to accelerate measures for

Regarding 5G, in December 2020, the Japan Radio Nagano

the prevention and mitigation of disasters and enhanced

Plant obtained a wireless test station license for local 5G

national resilience. We will also capture private-sector

and launched demonstration experiments. In 2021, along

demand related to LTE and motion while expanding ourwith equipment development, we will promote collaborations

overseas business domain in Southeast Asia centering onwith business partners through trials and demonstrations forweather and the disaster prevention, marine solutions andvarious applications, which will lead to local 5G businesses

transportation businesses. Furthermore, Japan Radio had twoin the near future. In terms of private LTE, we expanded

items selected through an open call for submissions regarding

business globally in 2020, including receiving orders for

new research and development for the social implementation

mining systems in the Republic of Gabon. We will expand thisof drones in the New Energy and Industrial Technology

business further by providing systems that take advantage ofDevelopment Organization (NEDO)“Project for an Energy

Japan Radio’s strengths, including the system-integrating LTE-

Saving Society Using Robots and Drones.”Going forward, we

BOX and the provision of apps meeting customer needs.

will continue to promote new research and development,
including a miniaturized, low-power-consumption collision
avoidance system, which began in 2020.

ICT and Mechatronics

New Japan Radio Co., Ltd. /Ricoh Electronic Devices Co., Ltd.

In ICT, we provide technological services that meet market

In the micro devices business, Nisshinbo has created new value in audio

needs, beginning with equipment manufacturing and sales

equipment, automotive and industrial devices, ICT and other fields,in the IoT field, and aim to create business that increases
added value through joint development with customers.
We will establish a foundation for digital business creationby compiling support packages and expanding railway andtransportation infrastructure communication field domains.
In the automotive parts business, we will attempt to pursue

Related SDGs

drawing on its competitive advantages in analog semiconductors andmicrowave technologies. Centered on New Japan Radio Co., Ltd. andRicoh Electronic Devices Co., Ltd., we are stepping up cooperation acrossthe Group to create a stream of new products and businesses in the

P.34

Business Results and Strategy

P.35

Key Products

areas of automotive CASE, industrial equipment and healthcare.

Group synergies, develop differentiated products throughthe creation of synergies with NJ Component, expand

32

33

Overview of Business Segments̶Micro Devices

Integrating Two Companies in January 2022

ASSP and ASIC, and in industrial equipment, we will develop

used in satellite communications is also expanding steadily.

In micro devices, business is mainly promoted by two

high-performance, high-value-added products and expand

We see the potential for continued growth going forward as

In 2020, the micro devices business reported sales ofcompanies: New Japan Radio Co., Ltd., with strengths in

our customer base. In communication equipment, we will

the information society becomes more diverse. Key to that¥61,141 million, down 6.3% year on year, and a segment

analog semiconductors for acoustics, and Ricoh Electronics

enhance efforts centered on in-vehicle equipment other thangrowth is demand for satellite communication components.

loss of ¥3,895 million (compared with segment profit ofDevices Co., Ltd., which specializes in analog semiconductors

smartphones, industrial equipment and IoT.

Demand is currently being driven by Asia, where there¥256 million in the previous fiscal year).

used for power supplies.

In our mainstay electronics devices, although demand for

New Japan Radio is working to commercialize several

In terms of production, we will reduce outsourcing

are many emerging markets for satellite communication.

costs and thoroughly manage expenses to further improve

We are promoting the development of high-performance

new devices and developing next-generation products suchprofitability. Assembly production outsourced by Ricohtransceivers with integrated transmission and reception

computers and other products arose from more people

as MEMS sensors for microphone modules used in smart

Electronic Devices will be transferred to THAI NJR CO., LTD.

that support high-speed and large-capacity communications

staying home, driving growth in sales of related products,

speakers and AI-powered speakers, and optical sensors

Production of SAW filters will be transferred to the Ricohin a compact, low power-consuming product. Sensors

COVID-19 lockdowns in each country caused factoryfor wearable devices and health device applications. The

Electronic Devices Yashiro Plant (Hyogo Prefecture), and theincorporating microwave technologies are becoming a new

shutdowns and disrupted supply chains, adversely affecting

company is also developing high-precision analog front-end

manufacture of SAW filters will be discontinued in-house.

growth field, driven by a steep rise in demand in the lastcustomers, while declines in sales of automotive products,

ICs, which are already in mass production. In microwave

In terms of materials, we will reduce material costs andfew years. Sensors are being adopted for a wider range ofconsumer-related products and communication-related

products, we are developing and manufacturing products

realize appropriate product prices with a strong competitive

fields, including crime prevention and other security tasks,

products resulted in lower sales and profits. However,for a wide range of fields, including satellite communication

advantage by consolidating lead frame suppliers whilehousehold and automotive applications, and even healthcare

market conditions were improving rapidly, especially fromsystems, sensors and high-output electron tubes. Powerpromoting the conversion from gold wires to copper wires

applications. In addition to stand-alone sensors, we are

the fourth quarter onward.

management ICs are the main product at Ricoh Electronic

used in semiconductors.

supplying modular products that integrate sensors andIn terms of sales, we will maximize synergies between

peripheral components, helping us win business from new

related products and sensor-related products were firm, theare highly efficient, precise and reliable using CMOS analog

the two companies. While expanding sales through cross-customers. In 2021, we will maintain and enhance thesecontract manufacture of satellite communication products

technology. In devices for automotive applications, theselling shared by existing distributors, we will strengthen ourefforts to acquire new projects. In terms of production,

ended, causing sales and profits to decline in the Unitedcompany is working on the development of high-quality ICs

ability to propose solutions through sales (rebranding) of

we will work to reduce costs by expanding the variety ofStates. However, profits rose on fixed-cost reduction.

for the high voltage and currents needed in next-generation

third-party products under the Nisshinbo brand, which willproducts produced at THAI NJR CO., LTD., while increasing

However, the COVID-19 impact bottomed in the third

powertrain components, as well as ICs with improved low-lead to further improvement in customer recognition andthe procurement of overseas materials. We will also

quarter and there are signs of recovery, mainly in sensor-

noise and noise regulation performance to increase thesatisfaction. In addition, we will strive to maintain proper

strengthen our quality assurance system.

related products.

accuracy of sensors for ADAS equipment.

inventory by producing only the products necessary for

Business Strategies for 2021

cooperation, from production to purchasing, between

The micro devices business is expected to steadily expand

business, these two companies will be integrated in January

Microwave Products

amid rising demand related to 5G, CASE and IoT. To

2022 as we leverage the resources of both parties to

The microwave product business has a stable market forrealize super-smart societies, we are refining our“Connect

create Nisshinbo Micro Devices Co., Ltd. We will continuecomponents used in radar, while demand for components

Everything”technologies and aiming for further growth andto create synergies between these two companies in terms

developments as an analog solution provider. Specifically,of development, sales and production, while accelerating

we will position products for automobiles, industrial

efficiency in areas where management overlaps to achieveequipment and IoT as future growth fields, strengthen our

successful integration.

Until now, we pursued Group synergies throughthese two companies. To grow this into a more profitablebusiness and, in particular, develop new products for EVs,
ADAS and other next-generation automobiles to increase

Electronic Devices

the composition ratio of our in-vehicle business. We plan to

In electronic devices, we will focus on product planningestablish stable business with a high growth rate that is notand development from both short-term and medium- toeasily affected by external factors such as semiconductor

long-term perspectives. In automotive products, we will

market conditions and COVID-19.

strengthen product development centered on LSIs such as

Financials

Devices, which is developing compact, low-power ICs thatdelivery to customers through fixed order manufacturing andsmall-lot production.

Key ProductsElectronic devices
Microwave products

Net Sales

New Japan Radio（millions of yen)Segment Profit

19.12

20.12

43,61041,931New Japan Radio

Ricoh Electronic Devices

22,812

20,515

Ricoh Electronic Devices

Eliminations, etc.*(1,137)(1,306)

Eliminations, etc.*

Total

65,286

61,141

Total* Includes goodwill amortization and revisions to retirement benefits

34（millions of yen)

19.12

20.12

144

(2,427)375(1,205)

(263)

(263)

256

(3,895)

Automotive products

Industrial equipment products

The number of ICs per vehicle continues toincrease amid the shift to vehicle electrification
and advances in autonomous driving technology.
ICs are now needed for a growing array of
applications, from car audio to power control units,
which support basic vehicle functions, electric
power-assisted steering and battery management
systems, as well as sensors that are integral toparking assist systems, collision avoidance andprevention systems and autonomous driving.

Nisshinbo has a diverse lineup of products
to meet customers’needs – operational
amplifiers that play a key role in improving
the sensing precision of encoders, which
support movement in industrial robots,
PMICs that support stable, low-noise
operation of various industrial equipment,
and analog front-end ICs that optimally
integrate industrial equipment functions.

ESG Initiatives

In microwave products, although sales of marine radar‒Business Segments

home video game consoles, microphone-equipped personal

Management Strategy

Summary of Financial Results for 2020

ProfileBusiness Results and Strategy

Satellite communication
system components
VSAT* are satellite ground stations thatplay a crucial role in satellite-based internet
connectivity, data transmission and telephony.
New Japan Radio is Japan’s only supplier ofkey components for VSAT and one of only ahandful of specialist suppliers worldwide. It
has the top share in the global market.
* Very Small Aperture Terminal

35

Overview of Business Segments̶Automobile Brakes

ProfileAutomobile Brakes
copper content of 0.5% or more. This situation has had aand new brakes at finished vehicle manufacturers. HVs,

favorable impact on new orders for Nisshinbo Brake copper-

EVs and other electric vehicles accumulate energy whenless (5% or less) and copper-free (0.5% or less) friction

braking by using an electric drive system that reducesmaterials, and we will continue to proceed according towear on conventional mechanical brake friction materials,

plans going forward. In terms of upcoming issues related tothus we expect demand for repair parts to decrease incompliance with copper restrictions, as regulations are also

the long run. On the other hand, the assembled product is

expected for microparticles expelled during brake wear, we

durable enough to withstand long-term use, realizing stable

will continue to examine the situation and promote research-braking force through coordination with electronically

and-development efforts.

controlled regenerative braking. In addition, in response

Related SDGs

Nisshinbo is a global supplier with world-class development capabilities in the field of friction
brakes business is to address the specific requirements of each market and customer with threebusinesses—Nisshinbo Brake, TMD Friction Group and Saeron Group—aiming to meet global
automaker needs for optimum parts procurement as the world’s leading friction materials company.

Business Results and Strategy
Summary of Financial Results for 2020

handles Japanese automobile manufacturers, enabling an early

In 2020, the automobile brakes business reported sales oflifted sales and profits higher. At the TMD Group, for which its main

¥114,827 million, down 12.6% year on year, and a segment loss ofmarket is Europe, sales of friction materials for new car assemblies¥2,289 million (compared with a segment loss of ¥3,340 million inand the aftermarket declined due to the impact of COVID-19.

the previous fiscal year).

However, from the middle of the year, aftermarket sales recovered

Global automobile production, which significantly affects therecovery from COVID-19 and bringing orders for new business thatand efforts to reduce expenses and improve costs reduced losses.

automobile brakes business, fell sharply year on year due to
COVID-19. During the first half of the fiscal year, in particular, thiscreated a situation where most countries were in lockdown andcustomers suspended operations. Despite signs of a rapid recovery

The TMD Group will build relationships with leading European

suppression during braking. Anticipating changes in demand

distributors and promote sales in the market for aftermarket

for friction materials due to the way automobiles will be usedproducts. Revitalization plans have been solidly implemented

going forward, Nisshinbo is focusing efforts on the research

despite COVID-19, and in 2021, we will further accelerateand development of products that are highly compatible withthese efforts. The industry is undergoing restructuring aselectronically controlled braking. Research-and-developmentcompetitors and distributors engage in mergers and otherefforts include the promotion of digital development that

activities amid demands for immediate action considering

leverages our accumulated experiences to build a mechanism

changes in the environment. Regarding new vehicle assembly,

enabling more efficient and precise proposals. Focused on

we will continue efforts to improve profitability at all ourthe future mobility society, we have also begun research inglobal bases, including the Essen plant in Germany.

conjunction with Group companies on vehicle suspension
sensing. We will promote our value as a partner trusted by

Improvement Activities

customers through technologies and the high-quality products

Improvement activities being rolled out at sites throughout

they produce. Moreover, we are moving quickly forward

the world have been moving steadily forward despitewith plans to optimize operations using production controls

COVID-19. Each year, reciprocal visits provide opportunities

incorporating ICT into the manufacturing process as a DX

for automobile brakes business employees to meet, shareinitiative, the visualization of equipment operating status andknowledge and communicate with one another. In 2020, due

equipment prognosis and predictive maintenance, and quality

to COVID-19 travel restrictions, we used online meetings andmanagement and RPA via AI analysis of manufacturing andother devices to further invigorate these exchanges.

inspection data.

Compliance with Environmental Regulations
In the United States, environmental regulations limiting thecopper content in friction materials have been enforcedsince 2021, and going forward, the sale of friction material
products with a copper content of 5% or more and use in
new vehicles is prohibited. Furthermore, from 2025 onward,

Business Strategies for 2021
Market Environment and Business Strategy

Net Sales（millions of yen)Segment Profit

19.12

20.12

50,85444,057

Nisshinbo Brakein the Chinese market from the middle of the year, the level of

We see COVID-19 as an ongoing problem that will linger

recovery from COVID-19 in other countries and regions differedthroughout 2021 and beyond, thus we expect that many

Nisshinbo Brakeas the impacts of COVID-19 continued to linger and maintaining

developed countries will continue to experience adverse

the supply chain became an issue. Under these circumstances,conditions, including declines in vehicle production. At theTMD

85,85075,106

TMD

Nisshinbo Brake Inc. posted lower sales and profits in Japan andsame time, we also expect that the avoidance of public

Eliminations, etc.*(5,366)(4,337)

Eliminations, etc.*

at overseas subsidiaries in the United States, South Korea andtransportation and the increasing use of automobiles will

Total

131,338

114,827

Total

Thailand. Sales were robust at our subsidiary in China, which mainly

provide a tailwind for the repair parts market.

36（millions of yen)

19.12

20.12

1,620

788

(4,152)(3,219)

(808)

142

(3,340)(2,289)* Including amortization of intangible fixed assets at TMD

37

Financials

materials, which are key components in automobile brake systems. Our strategy in the automobile

TMD Group Revitalization Plans

for high-quality products with excellent noise and vibration

ESG Initiatives

Nisshinbo Brake Inc. / TMD Friction Group S.A.

to the enhanced silence of the vehicle, there are demands

Business Segments

environmental regulations will be tightened to prohibit
Management Strategy

Furthermore, plans are under way for electrification
and autonomous driving‒related next-generation vehicles

Overview of Business Segments̶Precision Instruments

Related SDGs

procured production due to COVID-19, we will work to expand

in March 2021 of the MKC1 next-generation EBS valve block

market share while making the necessary capital investments tofor automobile electrification and autonomous driving, we

capture demand in growing markets.

promoted the introduction of production equipment for the

Medical applications are another promising growth field fornext-generation model MKC2, which is a smaller and lighter

the precision instruments business. The Nanbu Plastics medical

product, in an effort to launch mass production in 2022.

business (Yoshida site) will be relocated to the Nisshinbo

Nisshinbo Precision Instrument & Machinery Hiroshima Corp.

Group Fujieda site to strengthen production facilities andis preparing for mass production starting in early 2022 incapabilities and improve production efficiency. Nanbu Plastics,

response to orders for diesel next-generation exhaust shutter

which already produces stool collection containers and othervalves and EGR valves. We will also continue to develop new

products, commenced shipments of allergy diagnostic kits in

products with the aim of receiving more orders for automobile

February 2020. In response to growing demand for hygieneparts.

and preventive medicine including infection control, we willcontinue to focus on winning and expanding orders for hygiene

Measures for Improved Profitability in the
Molding Products Businessand allergy test molded products.

Collaboration with Elephantech Inc.

increase orders in Japan while paying close attention to the

Nisshinbo Mechatronics Inc. and Elephantech Inc. haveautomotive and home appliance sectors. The segment also makes customized production equipment totrend of major customers returning to home appliances madeconcluded a basic agreement on the joint development

meet the specific needs of customers. We work closely with subsidiary Nanbu Plastics Co., Ltd. to develop

in Japan from 2021 onward. At the same time, we will focus onof three-dimensional wiring-integrated molded parts fordeveloping new products for air conditioners utilizing molding

automobiles. The precision instruments business group, which

technology for rotating parts, while at the same time, we will

includes Nanbu Plastics, will incorporate its injection molding

work to improve profitability by reducing manufacturing costs

technologies, electronics technologies and automotive parts

through the use of recycled materials and activities to reduce

manufacturing expertise with Elephantech’s in-mold printed

the defective product ratio. Nisshinbo Mechatronics (Thailand)

circuit (IMPC™) technology to accelerate the development

Ltd. will utilize its third factory to increase orders for cross-of various in-vehicle molded parts in which resin, wiring

Business Strategies for 2021

flow fans and improve profitability by winning new orders forand functions are integrated with each other. Prototypes ofautomotive products. At Nisshinbo Mechatronics (Shanghai) Co.,

molded parts with integrated wiring for ADAS vehicles have

In 2020, the precision instruments business reported sales ofIn the precision instruments business, the operating environment

Ltd., amid expectations that orders will decline in accordancealready been made, and we are moving onto developing for¥51,419 million, down 21.4% year on year, and a segment loss ofwill likely remain challenging in the near term due to COVID-19

with the manufacture of sheet metal from resin parts by major

mass production aiming for a 2023 start while expanding this¥948 million (compared with segment profit of ¥879 million in theand other factors, as precision parts for the automotive sector,

customers for home appliances, we will focus efforts on

application to other fields including home appliances, medical

previous fiscal year).

air-conditioner parts and automotive headlamp assemblies arecultivating new customers and expanding sales of Eco Cross®

care and housing equipment.

these businesses globally, centered on Asia.

Business Results and Strategy
Summary of Financial Results for 2020

all highly exposed to economic conditions in China and othermarkets in Asia. However, as we expect demand for automotive

due to COVID-19. Regarding valve blocks for Continental, orders

parts to rise going forward, we plan to upgrade production

for Nisshinbo-Continental Precision Machining (Yangzhou) Co.,

facilities at all our plants and reorganize our network ofLtd., remained at the same level as the previous year as China

manufacturing sites.

recovered from COVID-19, but overall sales and profits declined,

and Eco Blade Turbo®. In addition, we will work to increase
orders for thick-walled lenses for automobile headlamps, theproduction of which has been transferred to Nanbu Plastics

Net Sales（millions of yen)Segment Profit（millions of yen)including in Japan. At Nisshinbo Precision Instrument & Machinery

Business/Product Identification and Closeout

Hiroshima Corp., we have been preparing for the early 2022 launch

The Nisshinbo Mechatronics Inc. molding products business

Precision parts

15,775

14,387

Precision parts

382

(78)

of diesel next-generation exhaust shutter valve and EGR valve massand Nanbu Plastics Co., Ltd., have production bases in Japanproduction, for which orders have already been decided.

and Asia (Thailand, China, India, Philippines and Indonesia),

Molding products

52,094

40,669

Molding products

1,286

(38)

Eliminations, etc.

(2,441)(3,637)

Eliminations, etc.

(789)

(832)

Total

65,42951,419

Total

879

(948)

In molding products, orders for home appliances and automotive

and going forward, we will continue to reshuffle and optimize

products decreased due to the impact of COVID-19, mainly in Japan,

production bases to capture global demand. In the molding

Thailand and India. Sales and profits declined in Japan after special

products business, cost accounting system upgrades

demand for air conditioners for schools in fiscal 2019. Althoughaccompanying the replacement of backbone IT systems in

China was temporarily affected by COVID-19, orders have recovered

2020 enabled the realization of higher-precision individual costin line with a recovery in the Chinese economy. At Nanbu Plastics

visualization, which will lead to cost-reduction efforts focusedCo., Ltd., orders for automobile products, housing and medical

on unprofitable products and price proposals to customers incustomers in Japan were suspended or reduced due to the impact

an attempt to improve profitability.

of COVID-19. Operations and earnings at overseas subsidiaries
and lockdowns in Indonesia and the Philippines. Furthermore, theMeasures for Strengthening Profitability in thePrecision Parts Business

Guangzhou plant was closed in December 2019 as we proceeded

In precision parts, we will attempt to increase profitability

to identify and close businesses, resulting in a significant decrease inthrough improved production efficiency by transferring andsales and profits compared with the previous fiscal year.

concentrating the production of the MK100 EBS valve block

were significantly affected, with widespread social restrictions

38

19.12

20.12

19.12

20.12

Key Products

Automotive EBS
valve block

Automotive headlight components

Fans for residential and commercial air conditioners

39

Financials

Sales and profits of precision parts for automobiles decreased
as customers suspended operations and adjusted production

ESG Initiatives

In molded plastics, Nisshinbo Mechatronics Inc. will work toprecision metal parts processing for the automotive sector and parts molding and processing for theBusiness Segments

Utilizing various areas of expertise accumulated over more than 70 years, this segment is focused on

the strengthening of government measures to promote locallygrow from 2022. In addition to commencing mass production

Management Strategy

Nisshinbo Mechatronics Inc.

Co., Ltd. At Nisshinbo Mechatronics India Private Limited, amidLtd., a product for which customer demand is expected toProfilePrecision Instruments

to Nisshinbo-Continental Precision Machining (Yangzhou) Co.,

Overview of Business Segments̶Chemicals

Business Strategies for 2021

Related SDGs

segment is working to develop products that help protect the environment and makelife more comfortable. Our environment and energy-related products include bipolarbusiness, we will promote high added value through the acquisition ofcontribute to the spread of environmentally friendly products such as

noncombustible spray certification and rapid market launches whilehydrolysis inhibitors for biodegradable plastic and waterborne cross-focusing on expanding sales of highly profitable products. In addition,linking agents for use in paint, coatings and adhesives that help reduceregarding hydrofluoroolefin (HFO), which won the 23rd Minister ofatmospheric pollution and other types of environmental pollution. We

Economy, Trade and Industry“Ozone Layer Protection and Global

are also developing new additives for marine biodegradable plastics

Warming Prevention Award”sponsored by the Nikkan Kogyo Shimbun

as a contract business for NEDO and will strive to expand sales

in 2020, we will further strengthen backfill urethane injection material,

through higher-value-added proposals that contribute to resolving thewhich injects HFO as a foaming agent into the back cavity of tunnels,

marine microplastic pollution problem. In anticipation of future growth

as a priority business area. In railway anti-vibration materials, we willin demand, while improving production efficiency with the current

contribute to the safety of Japan’s railway network by increasing

equipment we plan to expand new production and development sites,orders for products that enable the extension of track maintenanceincluding alliances and M&A, to expand our business domain.

work cycles. Regarding bio-carriers for wastewater treatment produced
locally in China, we will build a stable production and sales system in

New Organizational Structure to Accelerate theDevelopment of Carbon Separators for Fuel Cells

China, while at the same time promoting expansion targeting the entire
Asian market. We plan to rapidly develop high-performance, highly

Hydrogen and fuel cells, which are attracting attention as a technology

durable bio-carriers and bring them to market as quickly as possible.

for realizing carbon neutrality, are being developed all over the world,

the durability and chemical resistance of biodegradable plastics and water-based resins,

particularly for buses, trucks and other fuel cell vehicles (FCVs). While

Long-Term Growth Expected in Glass-Like Carbon Products

which have minimal environmental impact. We are investing management resources inengaging in development with several leading manufacturers, we

In the semiconductor market, which is the main application for

are aiming for commercialization in response to the strong demandcarbon products, the development of advanced semiconductor

for prototypes for buses and trucks. In addition, as the number of

products that achieve miniaturization and power saving is

inquiries for fixed use is increasing globally, we are aiming to increase

intensifying. Advanced semiconductors are being developed by

the adoption of this technology.

semiconductor manufacturing equipment manufacturers andthese promising growth areas as a matter of priority.

Business Results and Strategy
Summary of Financial Results for 2020

In January 2021, the in-vehicle R&D Department, which used toinsulation equipment upgrades for restaurants—the main

In 2020, the chemicals business reported sales of ¥9,577 million,

new plant construction and the cancellation or reduction in

up 2.0% year on year, and segment profit of ¥1,811 million, up

scale of plant repair projects, the cancellation of construction

9.8% year on year.

projects and a sharp drop in orders for urethane block used in

In functional materials, sales and profits increased due toin the second half, production and shipments remained at abiodegradable plastics. Regarding overseas sales, which account

low level through the end of the fiscal year. In this environment,

for more than half of all sales, although orders for automobile andurethane base solution for tunnel repairs (backfill injection) in

shoe-related products decreased due to the economic recession

public works projects performed well, and in bio-carriers forcaused by COVID-19, sales of food packaging materials, homewastewater treatment, we responded to delays in production

appliances and PC-related products, for which demand expanded

system construction in China by switching to domestic exports. In

under restrictions on going out, were strong. In line with a growing

response to the decline in sales, we focused on expanding sales

environmental awareness of problems such as marine microplasticof highly profitable products while at the same time trying topollution, biodegradable resins are attracting attention, thus we

reduce costs, and although sales were lower than in the previous

will continue to develop new products that meet social needs.

fiscal year, profits remained at about the same level.

In carbon separators for fuel cells, sales and profits rose due toexposure and etching processes. With the increasing demand for

integrated with the Nisshinbo Chemical Fuel Cell Division to establish

high-purity carbon products and the realization of multiple shapes,

a mass production process for automobiles and improve productivity

we are proceeding with development aimed at meeting performanceand quality. We also aim to acquire IATF16949, which is a required

demands. In fields other than semiconductors, we will develop newcertification for automobile parts factories, by the end of 2021.

applications that take advantage of the merits of glass-like carbon
products, while at the same time, we will focus on acquiring newcustomers with products that leverage the firing technologies we

automotive design models. Despite movement toward a recovery

steady sales of Carbodilite, an environmentally friendly modifier for

In glass-like carbon products, sales and profits decreased

increased sales of prototypes for fixed use overseas and in-vehicle

due to sluggish market conditions caused by COVID-19. In theapplications for buses and trucks. In line with the development

semiconductor market, which is the main application for theseof fuel cells, which is booming globally, inquiries for development

products, demand for smartphones and industrial equipment‒

and trial production are increasing rapidly and carbon separators,

related products slumped in the first half due to COVID-19, butwhich are superior to competing materials in terms of light weightgradually recovered in the second half. Inventory adjustments

and durability, are being actively developed for high durabilityon the customer side and changes in performance demands

applications. Nisshinbo will work to develop highly competitive

prevented a full-scale recovery in 2020. We will continue to

products in terms of thinning, performance, cost and results in andevelop and expand the adoption of products that support

effort to expand sales.

semiconductor manufacturing processes in cutting-edge areas.

semiconductor manufacturers in the cleaning, film formation,

be in the Nisshinbo Holdings Business Development Division, washave cultivated up to now.

Net Sales（millions of yen)Segment Profit（millions of yen)

19.12

20.12

Environment and energy-related products*

8,079

8,271

Environment and energy-related products*

Carbon products, etc.

1,553

1,492

Carbon products, etc.

Eliminations, etc.

(245)

(186)

Eliminations, etc.

Total

9,391

9,577

Total

19.12

20.12

1,408

1,630

240

182

0

(1)

1,650

1,811

* Fuel cell bipolar plates, Carbodilite, insulation materials

Key Products

In thermal insulation products, market conditions were sluggish
due to the impact of COVID-19, which affected commercial

40

Bipolar plates for fuel cells

Carbodilite

Bio-carriers: APG

41

Financials

application for this product—and resulted in lower demand for

ESG Initiatives

plates for fuel cells and Carbodilite, a high-performance plastic material that increases

Business Segments

Drawing on a broad base of expertise and intellectual property in the chemical field, thisexisting system base solutions and hard blocks is positioned as the core

We will accelerate the market release of new Carbodilite products thatManagement Strategy

Nisshinbo Chemical Inc.

In thermal insulation products, in which the manufacture and sales ofProfileChemicals

Expanding Carbodilite Sales, Contributing Solutions toEnvironmental Issues

Strategy for Differentiating and Increasing Added Value ofThermal Insulation Products

Overview of Business Segments̶Textiles

industry with its state-of-the-art technologies and high quality. Nisshinbo subsequently expanded
its business globally in the fields of spinning, weaving, processing and sewing, and today possesses
some of the world’s most advanced technologies in product development and production. Nisshinbo

The shirt rebirth project involves joint research conducted by theand spandex yarns for legwear; and promote the development ofNisshinbo Holdings Business Development Division and Shinshu

environmentally friendly products to expand new sales channels.

University. Unused cotton shirts are collected and cut up, theTOKYO SHIRTS will pursue a low environmental impact,cotton is dissolved and converted into recycled fibers, and the

expanding sales of its pure cotton wrinkle-free shirts and promoting

fibers are used to make a new shirt. The full-scale research andthe use of recycled PET made from polyester material, while atdevelopment of practical applications launched in March 2021 withthe same time shifting its focus to online sales. Promoting an omni-

the goal of commencing trial production in 2023. The cellulose

channel strategy linked to in-store services such as fittings andnanofiber utilization project, which is being promoted as a next-

store pickups, we will further expand online sales.

generation environmental product, involves converting surplus

At the Indonesia subsidiary production site, we will continue

such as cuttings and cotton waste generated in the manufacturing

pursuing the goal of global cost-competitiveness and global quality,

process into nanofibers, recompacting them and utilizing them forand promote production system restructuring, while converting tovarious purposes. Soaps that use the cellulose nanofibers currently

an environment-friendly factory that complies with environmental

under development as scrubbing agents aim to contribute toregulations, including replacing coal fuel with natural gas fuel;solving the problem of marine microplastics.

developing new products that align with the SDGs; and moving
to eco-friendly factories that comply with local environmental
regulations in order to expand supplies to third countries andregions.

textile processing technologies.

Net Sales

Business Results and Strategy
Business Strategies for 2021

In 2020, the textiles business reported sales of ¥33,957 million,

Market Environment and Business Strategy

down 31.4% year on year, and a segment loss of ¥813 million

The textiles business, which is directly linked to apparel(compared with segment profit of ¥1,037 million in 2019).

consumption, was greatly affected by changes in lifestyle andIn the shirts segment, demand for business apparel declined

consumption behaviors such as voluntary bans on leaving home

due to the spread of COVID-19 and sales of wrinkle-free shirt fabricand the spread of telework due to COVID-19. However, there arefell sharply. At TOKYO SHIRTS CO., LTD., temporary closures andsignificant business opportunities for services and products thatshortened business hours due to the spread of COVID-19 resulted

support the online sales of apparel and casual business styles, as

in sluggish physical store sales, and although online sales increased,

well as environmental products that embody the SDGs centeredsales and profits declined overall due to continued poor sales,on natural materials. In addition, as the world’s population is still

especially in central Tokyo, even after stores reopened. In uniforms,

growing, and economic growth is robust in Asia, the global textiles

a sales recovery was delayed due to a prolonged production

market is expected to expand further.

adjustment for working apparel and a decline in the willingness

In this market environment, we aim to increase operating cash

to update corporate uniforms. In developed materials, sales offlow in the textiles business by focusing on environmental, digital,

MOBILON tape for medical face masks increased substantially but

functional and global themes, accelerating the development

consumption of non-woven fabrics for cosmetics and spandex yarns

and launch of new products contributing to super smart andfor legwear declined significantly due to the impact of the voluntary

environmental energy societies, and establishing digital businesses

ban on leaving home.

and environmentally focused manufacturing as quickly as possible.

Overseas, our Indonesian subsidiary saw a decrease in sales
due to the spread of COVID-19. At our Brazilian subsidiary, sales

Reducing Environmental Burdens while
Expanding Existing Businesses

and profits were down despite the rapid recovery in local apparelIn shirt products, we aim to create new markets and increase

markets in the second half of the fiscal year.

market share by developing next-generation products with evenin the Japanese domestic market and third countries and regions

better performance, particularly APOLLOCOT non-iron fabric, which
can help cut electricity consumption through the reduced need forironing. We will also expand the development of business casual

42

20.12

Japan

42,48429,514

Overseas

21,97014,166(14,949)(9,723)49,50533,957

Eliminations, etc.
Total

Segment Profit（millions of yen)

19.12

20.12

Japan

526

(842)

Overseas

770

(31)

Eliminations, etc.

(260)

61

Total

1,037

(813)

Financials

Summary of Financial Results for 2020

（millions of yen)

19.12

ESG Initiatives

is currently working to increase global sales of the APOLLOCOT brand by mobilizing its sophisticatedshirt rebirth project and a cellulose nanofiber utilization project.

and recyclable raw materials in non-woven fabrics for cosmetics

Business Segments

Since its founding in 1907 as Nisshin Cotton Spinning Co., Ltd., Nisshinbo has led the Japanese textile

In terms of new environmental businesses, we are engaged in aface masks, a market that is expected to grow; use eco-friendly

Management Strategy

Nisshinbo Textile Inc.

Related SDGs

Promoting New Environmentally Themed Businesses

aim to develop new sales channels for MOBILON tape for medical

ProfileTextilesproducts suitable for a new lifestyle. In materials development, we

Key Products

Non-Iron Shirts Apollocot

Oikos fabric

Mobilon/Elastomer

Our Apollocot shirts, developed withthe full capabilities of Nisshinbo Textile
Inc., have been highly appraised bycustomers as next-generation noniron shirts, and the technology is being
extended to other items as well, suchas handkerchiefs, business knit shirts,
and cotton business pants.

Oikos non-woven fabrics employ
the spunlace manufacturingmethod, which uses water jets
to finish fibers in a sheet format.
These extremely safe and hygienic
ecological materials are used
in a wide range of fields, fromcosmetics and household sundries
to industrial applications.

Mobilon is a type of spandex (polyurethane elastic
fiber) developed by Nisshinbo Textile using proprietary
technologies. leveraging its soft touch when stretched
and ability to maintain shape, the range of applications
continues to expand into a variety of categories including
clothing and materials.
Our elastomer is a thermoplastic polyurethane material
also developed using proprietary technologies. Thanks to its
excellent elasticity, flexibility, and durability, it is used widelyin apparel, face masks, and other industrial materials.

43

Overview of Business Segments̶Real Estate

ESG Initiatives
ProfileReal EstateWith its corporate philosophy“Change and Challenge! For the creation of the future of Earth andPeople,”the Nisshinbo Group has since its founding inherited the basic spirit of corporate public
institutions of contributing to society through business activities. We are placing ESG at the heart of ourProcess of Determining Materiality
In February 2015, we identified material issues for the Group in order to clarify issues that required action toachieve sustainable growth for the Nisshinbo Group’s business together with society.

Nisshinbo Holdings Inc.

1. Identify social issues forconsideration

Nisshinbo’s real estate business redevelops properties that have become vacant as a result of
business changes at Group companies. Income from those activities is used to fund the Group’sgrowth strategy, such as launching new businesses and expanding global operations. Income isgenerated from two main sources—property leasing and the sale of housing lots. Nisshinbo has
actively developed the housing lot sales business since 2009, when the Group moved to a holding
property sites with excellent locations, generating strong earnings for the real estate business.

3. Deliberate and approve at the
Corporate Strategy Conference

2. Prioritize social issues

First we identified social issues,

During Group CSR Council

The Corporate Strategy Conference,referring to ISO26000, the fourth

deliberations, we prioritized the social

chaired by the president of Nisshinbo

edition of the GRI Guidelines, the 10

issues we had identified from theHoldings and comprising all managing

principles of the UN Global Compact

perspective of their importance toofficers, deliberated the issues’materiality.

and other social norms. We thenstakeholders and their importance toAfter considering the importance of theseevaluated their relationship to thethe Nisshinbo Group, coming up with asocial issues and their relationship to theGroup’
s businesses and identified 22

draft proposal.

Group’
s businesses, we determined thesocial issues for consideration.

ESG Initiatives

and operating company structure. The Group’s domestic real estate portfolio includes many land andBusiness Segments

Related SDGs

Management Strategy

thoughts on corporate management and proactively pursuing ESG initiatives.

three material issues indicated below.

Business Results and Strategy
by effectively utilizing the real estate assets of the whole Group.

In 2020, the real estate business reported sales of ¥20,279 million,

projects shown below.

up 74.0% year on year, and segment profit of ¥11,512 million, up

We plan to continue generating stable earnings by focusing on the

Relationship between Materiality and Global Guidelines

Regarding the redevelopment of the former Japan Radio site inMateriality

Mitaka (Tokyo), we launched sales of all 678 condominium units

41.0%.
In the property leasing business, sales and profits both
declined due to the sale of a building for use as a large

SDGs

sales in 2021.
For the redevelopment of the former Miai Plant site (Aichi

addition to launching sales of condominiums in Mitaka, Tokyo,

Prefecture), we will continue last year’s sales of all 357 detachedsales and profits increased significantly due to the sale ofhomes and land for commercial, medical and welfare facilities.

Contribution to theenvironmental and energy field

Environment

S Social Initiatives

Creation of a safe and securesociety

Human Rights
Labor Practices
Consumer Issues
Community Involvement
and Development

G Corporate Governance

Global compliance

Organizational
GovernanceFair Operating Practices

E Environmental Initiatives

New projects include the redevelopment of employee housingin Nishiarai (Tokyo) as rental condominiums. Rebuilding work

Business Strategies for 2021

started in December 2019. We expect to begin sales of Phase 1 (50units) in September 2021 and Phase 2 (149 units) in April 2024.

In 2021, we expect to continue securing high profits as in the

ISO26000

and commercial facility sites in 2020 and expect to complete allcommercial facility (Aichi). In the housing lot sales business, inresidential land in Okazaki, Aichi Prefecture.

Financials

Summary of Financial Results for 2020

Furthermore, we have launched redevelopment of the former

previous fiscal year. Leasing operations in the property leasing

Notogawa factory site (Shiga Prefecture) and plan to sell 120

business were firm for land, office buildings, commercial facilities

condominium units and land for urbanization promotion facilities inand other properties, while sales of land and other properties are2023.

ongoing in the housing lot sales business.
The real estate business will continue to fulfill its role as asource of funds to help Nisshinbo attain its management targets
Net Sales

44（millions of yen)

SDGs with Close Links to the Nisshinbo Group's Businesses
Segment Profit（millions of yen)

19.12

20.12

19.12

20.12

11,655

20,2798,163

11,512

6. Clean water and sanitation

9. Industry, innovation and infrastructure

Ensure availability andsustainable management ofwater and sanitation for all

Build resilient infrastructure, promote
inclusive and sustainable industrialization,and foster innovation

12. Responsible consumption
and production
Ensure sustainableconsumption and production
patterns

13. Climate action
Take urgent action tocombat climate change
and its impacts

45

ESG Initiatives̶Environmental Initiatives

ESG Initiatives̶Social Initiatives

Environmental Initiatives Contribution to the environmental and energy field

Social Initiatives Creation of a safe and secure society

The Nisshinbo Group is aiming to increase corporate value as a more united corporate group by realizing its Corporate Philosophy,

Each and every employee’s ability is key for companies to contribute sustainably to a diverse and global society. We aim to create“Change and Challenge! For the creation of the future of Earth and People.”As an Environment and Energy Company group, wea more worker-friendly environment for employees by respecting each of their character and individuality and placing the right

will continue to offer new products and systems that help protect the environment, save energy and create alternative sources ofpeople in the right jobs. To this end, we respect diversity in all respects, including human rights and hiring, and promote work-lifeenergy, while also providing solutions that address some of the greatest issues faced by humanity today, such as environmentalbalance. Additionally, we carry out safety and occupational health activities in an aim to eliminate all occupational hazards.

Management Strategy

Basic Stancedestruction and natural disasters caused by climate change, to make life safer and more secure for people everywhere.

Long-term Environmental Targets

Cross-sectional Activities for Diversity & Inclusion(to fiscal 2030)

The Nisshinbo Group is promoting diversity & inclusion (D&I) activities to support the sustainable growth of the Group, which boasts a

Primary targets

Reduce greenhouse gas
emissions per unit of sales

70％ or more of total sales％ or morebycompared to fiscal 2014

toImprove recycling ratio

Reduce water usage perunit of sales

95％ or more％ or morebycompared to fiscal 2014

25

to

70

Fiscal 2021 target

respect the differences among them and make use of each other's strengths.
Starting from a sense of the uniqueness of each individual, the Group aims to achieve a workplace in which diverse people are active
by 2025. In January 2021, the Group conducted a training session for senior management,“Psychological Safety: _Achieving Results
The Group will continue to disseminate messages from senior management, provide training for senior management and managers,

Fiscal 2020 results

Implement at more than 5 overseas sites

Activities underway at 5 sites*3

Reduce water usage per unit of sales

Reduce by 3% or more compared to fiscal 2017

Down by 12％ compared to fiscal 2017

Promote Life Cycle Assessments (LCA)*

50% or more of total sales

49% of total sales

Improvement of the sales percentage by the products that contributeto the development of the sustainable society

55% or more of total sales

51% of total sales

Reduce by 10% or more compared to fiscal 2014 Down by 2% compared to fiscal 2014

Reduction of greenhouse gas emissions per unit of sales

Reduce by 10% or more compared to fiscal 2014 Down by 5% compared to fiscal 2014

Reduction of the volume of PRTR*2 substance emissions per unit ofsales

Reduce by 10% or more compared to fiscal 2017 Down by 31% compared to fiscal 2017

Improvement of recycling rate

Increase the recycling rate to 90% or more

Improved recycling rate to 85%*1 Life cycle assessment (LCA): Understanding of environmental load, through the life cycle of a product, from raw materials, to production, use, and finally to disposal.
*2 PRTR substances: Substances subject to the Pollutant Release and Transfer Register (PRTR) system pursuant to the“Act on the Confirmation, etc. of Release Amounts of Specific

Human Resources Training

Empowering Women

The Nisshinbo Group has built a systemized training framework withIn January 2021 Nisshinbo Holdings Inc. and the Group's othera number of components. The framework includes courses designed

12 companies in Japan formulated and announced its Action

for different groups, such as new recruits and people newly

Plan Regarding the Appointment of Female Managing Officers

appointed to mid-level manager, section head and division head

and Managers.

positions, courses to acquire specific skills, general study courses

Measures to empower women in the workplace

covering topics such as career training, safety, human resources andthe environment, and specialist courses on technologies, accounting,intellectual property and other topics related to specific businesses
earmarked to become senior managers. The program is designed to

Nisshinbo Group Climate Change Countermeasuresconduct Innovation Leader Development Training for young andclimate-change. The Group manages key performance indicators* (KPIs) as part of systematic measures to achieve its medium-term
environmental targets for reducing greenhouse gas emissions per unit of sales and expanding sales of products that contribute to asustainable society.
*KPI: Key Performance Indicator, an indicator of management performance.

Climate Change Scenario Analysis
The Nisshinbo Group, reflecting changes to the Japanese government 2030 greenhouse gas reduction targets, plans to promote analysesof climate change scenarios in accordance with TCFD* recommendations.
Through climate change scenario analysis, the Group will identify risks and opportunities that can affect the Group's operations in the
future and incorporate them into business strategy formulation enabling more flexible and robust strategies that increase resilience tofuture risks.
*TCFD: Task Force on Climate-related Financial Disclosures, created by the Financial Stability Board (FSB)

For more details, please visit the Nisshinbo Group’s Sustainability website.
https://www.nisshinbo.co.jp/english/csr/index.html

46• Held lectures for senior managers

2016• Started training program for management-level employees (held 14 times
for total of 394 managers)
This training for all employees at the managerial level is designed to help
participants understand the fundamental significance of promoting theadvancement of women and help them recognize and overcome theirown biases.

and functions. We also run a special program for employees

Chemical Substances in the Environment and Promotion of Improvements to the Management Thereof”and reports of their amounts of release and transfer must be filed.
*3 Fiscal 2019 Activities started: Shenzhen NJRC Technology Co., Ltd. (China) and PT. Nikawa Textile Industry (Indonesia). Fiscal 2020 Activities started: THAI NJR CO.,LTD. (Thailand), Nisshinbo Somboon Automotive Co., Ltd. (Thailand), and NANBU Philippines Incorporated (Philippines).

The Nisshinbo Group contributes to the achievement of the Sustainable Development Goals (SDGs) through activities to tackle

2015

foster approaches, knowledge and behavior for their future senior• Started training program for female employees (held nine times for totalof 228 participants)
This training for female employees aims to help participants understandthe fundamental significance of promoting the advancement of womenand help them overcome their own biases to encourage them to engage
in the type of work they want.

manager roles before they are promoted.
In addition, as part of efforts to cultivate future leaders, we
mid-level employees.

• Submitted general business operator action plan based on Act on
Promotion of Women's Participation and Advancement in the Workplace
Set concrete targets for number of female managers and ratio of female
recruits

Another area we are focusing on is cultivating human resourcesthat can handle the demands of international business. The courses
shown below are designed with that aim in mind. In fiscal 2020, we
introduced basic digital literacy to our new employee training.
For new employees• Cultural awareness training• Talks by employees who have worked overseas

For employees
assigned tooverseas posts• Cross-cultural communication• Training to increase understanding of complianceand risk management• Training at language schools to improve linguistic
ability

For young employees• Language study for 2-6 months in the US andChina• English and business Japanese courses held
jointly with Group companies

For employees up to
35 years old• Measures to promote overseas experience• Support for online English conversation classes
and web-based language study tools

2017• Started joint training sessions for line managers and female staff (held 12
times for total of 178 groups)
Managers and their female staff participate in pairs, engaging in group
discussions and meeting one on one to create medium-to long-term careerplans.

2021• Formulated and announced Action Plan Regarding the Appointment of
Female Managing Officers and Managers

Action Plan Regarding the Appointment of Female Managing
Officers and Managers（Target for FY2021-FY2024）(1) Appoint several female executives.
(2) The recruitment ratio of female new graduates is to be more than fifty percent.
(3) Promote the development and mid-career recruitment of female managerial
candidates.

47

Financials

Reduction of the energy consumption per unit of sales

and promote a wide range of public-relations and other activities.
ESG Initiatives

Reinforcement of the maintenance of biodiversity

1

employees can speak and act freely without excessive reserve. A vibrant and supportive workplace requires that people recognize andThrough D&I,”with the aim of promoting understanding of the importance of "psychological safety." a foundational concept of D&I.

Medium-Term Environmental Targets (FY2019-2021) and FY2020 Results
Key action items

diverse workforce and business portfolio. The goal of the Nisshinbo Group's D&I activities is to foster an organizational culture in which
Business Segments

Increase ratio of products that
contribute to sustainable society

ProfileBasic StanceESG Initiatives̶Social Initiatives

Diversity training

Safety and Health Activities

and inclusion, the impact of the COVID-19 pandemic since last

In a fresh initiative to hire people with disabilities as valuable

The Nisshinbo Group shares the Business Conduct Guidelines“Safety is the Basis for Everything”with all employees andyear provided us opportunities for us changes in working styles in

assets, Nanbu Plastics Co., Ltd., hired two people withpromotes health and safety activities with the aim of maintaining and improving a safe and supportive working environment.

a good sense. As a company, we need to engage our employees

disabilities and Nagano Communications Sales Co., Ltd., hired

in discussions about race, gender diversity, and leadership, andone person with disabilities using a monitored satellite office.

assessments (of operations, facilities and chemicals) and re-inspection; advancement of safety training and KYT* activities,

promote diversity, equity, and participation in the organization.

Providing work without restrictions of location or time can

including for temporary employees; and revision of work standards as appropriate, with regular training focusing on harmful andresolve the stress of commuting for disabled people, concerns

hazardous operations. These policies were implemented at all Group companies.

In fiscal 2020, to continue eliminating serious accidents, we focused on three initiatives: continued implementation of risk

States conducts diversity training with the aim of ensuring thatabout human relations in the workplace and difficulties faced

employees at all levels correctly understand the company's

during work. Monitored telework is a new form of employment

work details change, skill-improving education, horizontal development of occupational accidents within the Group, danger

stance, management status, and project progress.

Each business office enhances each employee's safety awareness by conducting small group activities (e.g., training whenawareness training and near-miss reporting) in addition to training new hires and changing work content. It also systematicallywith disabilities. The entire Nisshinbo Group will use telework

conducts risk assessments (of equipment, work and chemical substances) according to an annual plan to prioritize the risks tomove toward the common goals set forth by the company,in the future to expand opportunities for people with disabilities

be addressed and take preventive safety measures.

we will conduct training by small groups, actively exchange

to work.

* Danger awareness training

Two people with hearing impairment are employed by Ricoh

understanding. This training is scheduled to begin this fiscal year.

Electronic Devices Co., Ltd. At the president's policy briefing

First, the company plan to conduct education for awarenessheld once every six months, the company's Ikeda Plant has

transformation from the management level and establish

been requesting sign language interpretation from the disability

Occupational Injuries

Health and Safety Audits

initiatives.

welfare center in Toyonaka, Osaka Prefecture, since 2018 toIn fiscal 2020, there were no instances of major workplace

The Nisshinbo Group conducts regular occupational healthpromote understanding of the president's policy. Going forward,

accidents (accidents with level 7 or higher injuries).

and safety audits of its manufacturing sites. A monitoring

Nisshinbo will continue working hard to ensure this policy isdisseminated among all employees.

In 2020, beyond promoting the active participation of a diverse
range of human resources, each Group company in Japan
work environments. Currently, we are advancing a variety ofIn an effort to promote respect for human rights and put inactivities based on the Action Plan for Workstyle Reforms,

place a more comfortable workplace, the Nisshinbo Group

which was announced in January 2021.

engages in human rights education and training activities basedon a structure in which Nisshinbo Holdings Inc.'s Chief of thethe Action Plan for Workstyle Reforms(January 1, 2021 to December 31, 2024)

1. Rectify long working hours
Reduce the number of employees who work more than 45 hours a monthafter overtime by 20 % compared to fiscal 2020.
2. Encourage use of annual paid leave
Maintain an annual paid vacation rate of at least 70%.
3. Promote flexible work styles(1) We will review systems that correspond to a variety of working styles.
(2) Develop an environment that makes it easier for male employees to takechildcare leave, etc.

Corporate Strategy Center serves as the Promotion Committee

Holdings Inc., labor unions, safety and health management

the average for the Japanese manufacturing sector and an

staff representing each business, and health and safety officers

improvement from the 0.65 level in the previous fiscal year. At

from other business sites, checks the state of health and safetybusiness sites with a particularly high number of injuries, we aremanagement at the targeted business sites. In fiscal 2020,

providing ongoing targeted guidance as part of efforts to raise

we conducted audits at 40 manufacturing sites in Japan andsafety management standards across the Group.

one manufacturing site overseas. We also verified health and* Frequency of injuries with lost workdays = number of employees injured with lost work ÷aggregate number of working hours x 1 million

safety conditions and carried out safety checks at four overseas

With respect to the Group's human rights education,
we conduct training for new employees and training for all
employees throughout the year. To raise employee awarenessof human rights, in December each year coinciding with Human
Rights Week, Group companies in Japan and other countries
invite employees and their families to submit human rights

Nisshinbo Group (Japan)

Average for Japanese manufacturing industry

1.2

checks are compiled in a comprehensive audit report, which
is used to analyze potential risks and communicate goodpractices to the whole Group as part of workplace health andsafety activities in the following fiscal year.

0.8
0.4
0

17.3

18.3

18.12

19.12

20.12

Health Management
The Nisshinbo Group’s Health Management Policy statesthat the“Nisshinbo Group, through the establishment of an

slogans and present awards for exceptional works.
Our subsidiaries in Japan establish a harassment consultation

manufacturing sites.
At the end of each fiscal year, the results of all audits andFrequency of Injuries with Lost Workdays

Chair, and Chief of the CSR Department serves as the Promotion
Committee Vice-Chair.

team composed of the Health & Safety Group from Nisshinbo

Group’
s domestic business sites was 0.50, which is lower thanenvironment where each individual member can play an active

Assisting workers in balancing work andnursing care

help desk aimed at preventing harassment, and contact people

Activities at Business Sites in Other Countries

for both male and female employees provide consultation

Nisshinbo Group's business sites in other countries have grown

to be a corporate group which is indispensable, at any time, forunder the system. Newly appointed contact people undergo

to outnumber those in Japan as its operations have become

our society.“ To promote health management efforts across the

The each Group company in Japan have introduced a number

basic training and follow-up courses to hone their consultation

increasingly global. We deploy the danger awareness training

Group, Nisshinbo established the Group Health Managementof programs to help employees balance work and nursing care.

skills.

and danger experience education carried out at our business

Department Meeting, which is attended by health managementsites in Japan to business sites in other countries as well, in

department leaders from each Group company and is tasked

These include nursing-care leave, family-care leave, shortened

We also place importance on giving consideration torole by promoting employee health and sound workplace, aims

working hours for family care and a system for returning

human rights in our supply chains. The Nisshinbo Group CSR

order to raise each employee's safety awareness based on thewith coordinating the Group’s activities. Specifically, theemployees to work after retirement for nursing care.

Procurement Basic Policy and CSR Procurement Guidelines ofBusiness Conduct Guidelines "Safety is the Basis for Everything"meeting focuses on activities in three key areas: personalGroup companies clarify rules such as consideration toward

We also communicate occupational injuries that have occurred

health, organizational health and safety awareness to ensure allbasic human rights and the prohibition of child labor.

at business sites in Japan to business sites in other countries to

employees are fully aware of their safety obligations.

prevent recurrence worldwide. We also continue fostering an
The "Tomonin" logo. This logo is used to promote work
environments where employees can balance work andnursing care.

48

awareness of the dangers of chemical substances we handle,
promote the thorough use of protective equipment and work toprevent health problems.

49

Financials

instituted a telework system to facilitate more comfortable

Respect for Human Rights

The frequency of injuries with lost workdays* at theESG Initiatives

Working Style Reforms

Business Segmentsthat leads to the active participation and retention of people

In order for employees with different backgrounds toopinions, encourage mutual respect, and deepen mutualManagement Strategy

Nisshinbo Automotive Manufacturing Inc. (NAMI) in the United

ProfileAmid society's growing expectations and enthusiasm for diversity

Using People with Disabilities as Valuable
AssetsESG Initiatives̶Corporate GovernanceCorporate Governance Global complianceCorporate Governance Structure

Nisshinbo is aiming to increase corporate value over the medium and long term as an Environment and Energy Company groupby operating its various businesses based on global business management and cash flow management. We follow the Nisshinbo
Group corporate philosophy:“Change and Challenge! For the creation of the future of Earth and People.”To achieve this, we arequantitative growth in earnings and shareholder value, focusing on ROE to improve profitability and placing importance on theshare price in management decisions.

business execution matters and resolutions to be discussed bybusiness execution and adopted a managing officer system tothe Board of Directors. The Board of Management also discusses

reinforce those functions. By transferring responsibility for business

important matters related to Group business execution, responses

execution to managing officers and strengthening oversight by theto business risks and other key items.

transparency and creating an effective governance structure that

directors and outside members of the Audit & Supervisory Board.

will support the Group’s sustained growth and enhance corporate

The corporate governance structure also includes a Nomination

value over the medium and long term.

Committee and a Remuneration Committee, which advise themanagement efficiency while ensuring transparency, as well as improve accountability, act ethically and build a stronger corporate
governance structure founded on our Corporate Philosophy.

We have formulated the Nisshinbo Corporate

Organizational form

thinking on corporate governance and related
initiatives. By steadily implementing the principles
as needed, we aim to improve the effectiveness ofgovernance and create a framework for rapid andbold decision-making that contributes to sustained
growth and increased corporate value over the
medium and long term.

Company with Auditors

Number of directors under the Articles of Incorporation

14

Term of office for directors under the Articles of Incorporation

1 yearChairman (except when

Chairman of the Board of Directors

President)
12（5）Outside director appointment status

Appointed

Number of outside directors designated as independent officers

expertise to monitor business management from an objective andto business execution, except items that require resolutions of

independent standpoint, while outside members and internallythe Board of Directors. Following discussions by the Board of

appointed standing members of the Audit & Supervisory Board

Management, which comprises directors, managing officers andwork closely with the Internal Audit Office.

other senior officers, the president finalizes the details of delegatedBoard of Directors and Other Activities (January 1, 2020, to December 31, 2020)
Fiscal year ended December 31, 2020

5

Number of Audit & Supervisory Board Members under the Articles of

5

Incorporation
Number of Audit & Supervisory Board Members (including outside4（2）members)
Number of outside corporate auditors designated as independent officers

2

General Shareholders' Meeting
Appoint / Dismiss

Appoint / Dismiss<Decision-making and oversight functions>

Coordinate
Audit

Recommend
Appoint /Oversight

Appoint / Dismiss

Discuss /ReportAudit & Supervisory Board

Four Audit & Supervisory Board Members(including two independent outside audit &supervisory board members)

ReportCoordinate

Audit<Business execution functions>Representative Directors
Instruct

Board of Management

Instruct

ReportManaging Oﬃcers, Business Divisions, Group Companies<Audit functions>
Audit

Representative Directors

Board of Management

Representative directors are appointed by resolutions of the Board of Directors.
As of March 30, 2021, the chairman and president were the Company’s two
representative directors.

The Board of Management, comprising directors and executive officers,
deliberates important matters related to Group business execution. In
principle, meetings are held on a monthly basis.

Audit & Supervisory Board

Attendance

Attendance◎ : Chairman / Committee chairman
Nomination Committee〇 : Attending member

Remuneration Committee

Attendance

Attendance

Masaya Kawata

◎

16/16

100%

-

〇

2/2

100%

〇

2/2

100%

Masahiro Murakami

〇

16/16

100%

-

◎

2/2

100%

◎

2/2

100%

Takeshi Koarai*1〇

Ryo Ogura

〇

16/16

100%

-

-

-

Kazunori Baba

〇

16/16

100%

-

-

-

-

-

-

-

Yasuji Ishii

〇

16/16

100%

-

-

Shuji Tsukatani

〇

13/13

100% *2--

Keiji Taga

〇

15/16

93.8%

-

〇

2/2

100%

〇

2/2

100%

Shinobu Fujino

〇

16/16

100%

-

〇

2/2

100%

〇

2/2

100%

Hiroaki Yagi

〇

13/13

100% *2

-

〇

2/2

100%

〇

2/2

100%

Hiroyuki Chuma

〇

13/13

100% *2

-

〇

2/2

100%

〇

2/2

100%

Naoko Tani*1

〇

-

〇

-

〇

-

Toshihiro Kijima

〇

16/16

100%

◎

14/14

100%

-

-

Takumi Ohmoto

〇

16/16

100%

〇

14/14

100%

-

-

Atsushi Yamashita

〇

16/16

100%

〇

14/14

100%

-

-

Mitsunori Watanabe

〇

16/16

100%

〇

14/14

100%

-

-

*1: Appointed director in March 2020

Internal Audit Oﬃcer

ReportAudit & Supervisory
Board Members(inside)Audit & Supervisory
Board Members(outside)

Accounting audit

Discusses business execution matters

Directors(outside)

Reappoint

Coordinate

ReportFinancial Auditors

Board of Directors-

Financials

Directors(inside)Corporate Governance Structure

Board of Directors

structure, outside directors draw on their depth of experience andto make judgements and decisions on important matters related

concurrently serving as

Number of directors (including outside directors)

12 directors (including ﬁve independent outside directors)

operations are conducted in an appropriate manner. Under thisdetermined by the board.

-*2: Since appointment as director

Responsibilities of the Board
Directors and the Board of Directors recognize that they have a

In light of the above, the Board of Directors deliberates andfiduciary duty to shareholders and thus strive to appropriately

decides on important management matters at board meetings, such

reflect shareholders’intentions within the board. By overseeing

as the formulation of management strategies and plans, changes

the preparation and management of internal control and risk

to the business portfolio group structure, and the implementation

management systems, directors and the board help to monitorof M&As. These management matters are determined based on
the criteria for agenda items stipulated under the Companies Act

Directors

Managing Officers

business execution and decision-making. At the same time, theAs of March 30, 2021, the Company had 12 directors, including fiveoutside directors. The Board of Directors is responsible for making
decisions on important management matters and for monitoring theexecution of duties by directors. Directors are appointed for one-year
terms in order to clarify management responsibility each fiscal year.

Nisshinbo has adopted a managing officer system to speed up decision-making forbusiness execution and clarify operational responsibilities. As of March 30, 2021,
the Company had 16 managing officers, including the president and six with dual
roles as directors. (Managing officers are also appointed for one-year terms.)

Company fearlessly confronts risk and works to achieve governanceof Japan, other statutory and regulatory requirements, and variousthat is focused on quick and bold decision-making. In this manner,internal rules that govern the Board of Directors and the delegation

the Company aims to achieve greater accountability to stakeholders,of authority. Further, in its deliberations and decisions, the board

increased profitability, and higher returns for shareholders.

keeps the following matters in mind.

50

ESG Initiativesof the policy and revising and improving its content

We have adopted this structure as we believe it ensuresof duties by directors in accordance with audit policy and plans

Business Segments

Matters concerning composition of governing bodies and organization management

Governance Policy, which clearly states our basicpresident and several outside directors.

members of the Audit & Supervisory Board monitor the execution

The Board of Directors authorizes the senior management teamCorporate Governance Policy

Nomination Committee
Remuneration Committee

Board of Directors. Committee members comprise the chairman,

Nisshinbo has established an Audit & Supervisory Board. The

By making rapid and bold decisions based on risk-taking in line with our management principles, we are working to enhance

AdviseIn addition, the Company appoints a number of outside

Board of Directors, we are improving management efficiency andManagement Strategy

improving the quality of corporate governance and other aspects of our organizational culture. In parallel, we are striving to deliver

Nisshinbo has separated decision-making and oversight from

ProfileBasic Stance51

ESG Initiatives̶Corporate Governanceindependent outside directors (including two woman). The• Compliance with laws and regulations and corporate ethics

maximum number of directors is set at 14 in the Company’s Articles• Increasing medium- to long-term corporate valueof Incorporation.
With respect to independent outside directors, the Board• Securing the trust of various stakeholders including
shareholders, customers, employees, business partners, andof Directors shall obtain the consent of the person in question

local communities

and appoint them after carefully determining their eligibility as

Evaluating the Effectiveness of the Board of Directors
The Board of Directors conducts a survey of all Board members

previous years. Measures and initiatives aimed at improving

regarding the effectiveness of the Board. The survey evaluates

effectiveness are discussed, and a summary of the survey results

the effectiveness of the Board of Directors by analyzing theare made public.

aggregated results and comparing and verifying results froman independent director, taking into consideration the external

Under the Articles of Incorporation, the Board of Directors

standards set by securities exchanges. To ensure that outside
directors and outside Audit & Supervisory Board members are able

Remuneration for Directors and Senior Managers

along the lines of environment and energy, the Board of Directors

to properly fulfill their roles and responsibilities, when nominating

To increase transparency and objectivity in processes forselects management talent as candidates for directors who

a candidate, the Company shall understand the status of officers

determining remuneration, Nisshinbo has established a(monthly payment), bonuses and stock-based remuneration

possess outstanding management experience, have the necessary

who concurrently serve in other listed companies or companies

Remuneration Committee as an advisory body for the Board(restricted stock compensation plan), which are set within

firm commitment and ability to realize the Company’s Corporate

and organizations that correspond to such, and verify that it will notof Directors. As of March 30, 2021, the committee comprised

the maximum limits approved by the General Shareholders’Philosophy and increase corporate value, and who enhanceinterfere in their attendance of the Company’s Board of Directors

the chairman, the president and five outside directors. The

Meeting. Stock-based remuneration for each role is set within

the composition of the board through greater diversity in areas

meetings, Audit & Supervisory Board meetings, or their work.

committee chairman is selected by members of the committee.

separate maximum limits for amounts and shares determinedsuch as gender and nationality. As of March 30, 2021, the Board

Remuneration for directors comprises basic remuneration

To attract outstanding management talent and ensureof Directors was composed of 12 directors, of which five are

Composition of the Directors

by resolutions of the General Shareholders’Meeting. However,appropriate conditions for directors and senior managers, theoutside directors receive only basic remuneration (monthly

Remuneration Committee develops a remuneration table forpayment) and retirement benefits are not paid to directors.

directors and verifies and makes appropriate adjustments toRemuneration for managing officers is based on the samethe table referencing criteria such as remuneration levels andpolicies and procedures.
ESG Initiatives

composition at peer companies and the Company’s relative
position in the sector and subsectors.

41.7%

Independence(

ratio of
Outside Directors)

InsideDiversity

Female58.3%(ratio of women)

16.7%

Male

83.3%

Remuneration for Directors and Auditors (fiscal period ended December 2020)

Corporate Governance Reforms
2006

Introduced outside director system andmanaging oﬃcer system, reduced term ofComposition of the Board of Directors
Number of inside directors

oﬃce for directors from two years to one（year）

2015

Abolished takeover defense measures

2006

2016

Corporate Governance Policy formulated
Established Remuneration Committee andNomination Committee (both discretionary
bodies), started evaluating eﬀectiveness ofBoard of Directors

2017
2018

Abolished internal advisor andconsultant system
Introduced restricted stockcompensation system

Number of outside directors （of which are women）

Basic remuneration(Fixed)Bonus(Performance-linked)

Restricted stockcompensation planTotal
number of payees

Directors(excluding outside directors)

244

166

58

19

8

Audit and Supervisory Board members(excluding outside Audit and Supervisory Board
members)

34

34

̶

̶

2

Outside directors and outside Audit andSupervisory Board members

52

52

̶

̶

8

Notes: 1. Total maximum remuneration for directors: No greater than ¥400 million per year (Employee salaries of individuals simultaneously appointed as employee and director are not included in
payments to directors. Directors are also eligible to receive compensation through a restricted stock compensation plan, up to a maximum value of ¥40 million per year.)
2. Total maximum remuneration for members of the Audit & Supervisory Board: No greater than ¥70 million per year
3. The Company had 12 directors (including five outside directors) and four Audit & Supervisory Board members (including two outside members of the Audit & Supervisory
Board) as of March 30, 2021.

2005
2007
2008
2009
2010

Basic remuneration: Amounts paid are derived from basic remuneration tables for each role determined through discussions by the2011

Remuneration Committee.

2012
2013

Bonuses: Paid to directors, except outside directors, as an incentive linked to fiscal year earnings performance. Based on basic remuneration

2014

tables for each role determined through discussions by the Remuneration Committee, bonuses are paid to each individual commensurate with2015

their role, in line with the performance of the Group and businesses in their respective areas of responsibility against targets for net sales, pre-

2016
2017

tax profits, operating cash flow and other indicators.

2018

Stock-based remuneration: Paid to directors, except outside directors, in the form of restricted stock allocations to provide greater incentive

2019

to directors to increase the Company’s share price and corporate value by aligning their interests more closely with shareholders with respect

2020

to the risk and reward of share price fluctuations. Stock-based remuneration for each role is set within maximum limits for amounts and shares

2021

determined by the General Shareholders’Meeting.
0

52

Remuneration breakdown (millions of yen)

Financials

Classification

Total remuneration(Millions of yen)

5

10

Business Segments

To promote the globalization of each Nisshinbo company

Management Strategy

requirements set forth in the Companies Act and the independence

authorizes some resolutions by the General Shareholders’Meeting.

OutsideProfile• Alignment with corporate philosophy and management policy

15（people）

53

ESG Initiatives̶Corporate GovernanceSelection and Dismissal of Directors and Senior Managers

Dialogue with Shareholders

To increase transparency and objectivity in processes for selectingof March 30, 2021, the committee comprised the chairman, theThe IR Director, who oversees policies and measures related

and dismissing directors, Nisshinbo has established a Nominationpresident and five outside directors.

to communication with shareholders and investors, accurately

managing officers take part in responding to applications forand fairly disseminates information outside the Company andinterviews from shareholders and investors.

proactively conducts IR activities. The IR Director also strives

Role of Nomination Committee
DismissTopmanagement
positions

The Board of Directors selects directors for top management

In cases where directors, including top managers, are deemed

positions from candidates proposed by the committee, which

no longer qualified for their role due to reasons such as theputs forward individuals with the necessary outstandinglack of necessary qualities and aptitude for management, theattributes, aptitude and achievements to fulfill the role.

committee recommends dismissal of the director to the Board

Directors

The Board of Directors selects directors from candidatesof Directors, supported by reasons for the recommendation.

proposed by the committee, which puts forward individuals

Managing
officers

Company plans and conducts individual meetings with domestic
and overseas investors throughout the year.

Stakeholder Engagement
Nisshinbo recognizes that continuous dialogue with stakeholders

any issues by emphasizing dialogue with customers, shareholders,is key to supporting sustained growth in corporate value. In line

employees and all other stakeholders connected to the Nisshinbo

with the aims of our VALUE commitment, we work hard to resolveGroup.

In cases where managing officers are deemed no longer

candidates proposed by the committee, which identifies andqualified for their role due to reasons such as the lack

proposes outstanding individuals from among the Group’sof necessary qualities and aptitude for management, thebusiness subsidiary leaders and management grade-employees

committee recommends dismissal of the managing officer

who have the necessary specialist skills and management

to the Board of Directors, supported by reasons for thecapabilities, backed by a firm commitment and resolve.

recommendation. Based on the committee’s recommendation,
managing officer.

Stakeholder Engagement Initiatives
Stakeholder

Customers

The president develops succession plans for top managers and other directors (excluding outside directors) and managing
officers and cultivates candidates to take over their roles. Details of those plans and progress with succession planning are sharedwith and discussed by the Nomination Committee, which includes outside directors, and adjusted and improved as necessary.
The Board of Directors monitors progress with succession planning based on necessary reports received from the committee.

Protecting the Rights and Ensuring the Equal Treatment of Shareholders
The Company shall ensure that the exercise of minority shareholder

business partner. In the event of resolutions with the potential forrights is not impeded and will take appropriate measures to fullya large impact on corporate value, such as the appointment orprotect shareholder rights. The Company will implement various

dismissal of directors or the introduction or extension of takeovermeasures related to communication with shareholders anddefense measures, the Company will conduct a particularly rigorous

investors and ensure the appropriate operation of the General

assessment of the rationale and necessity for holding the shares.

Shareholders’Meeting.
The Company has set out a policy for cross-shareholdings. In line

Employees

Nisshinbo has not adopted takeover defense measures. In theevent that the Company decides to implement a capital policy

with that policy, it regularly assesses the purpose and economic

that could harm the interests of shareholders, the Company will

rationale for cross-shareholdings based on capital costs and otherprovide a clear explanation to shareholders about the necessity

indicators. The results of the assessments are reported to theand rationale for the policy and follow the necessary procedures.

Board of Directors, which discusses the merits of continuing to holdthe shares or selling them. If the Company receives approaches
from companies about selling its holdings of their shares, it will
respect their wishes and not hinder the sale of shares, while also
putting forward its views.
The Company regularly assesses its holdings of shares inbusiness partners to ascertain the size and scope of the holdings
and to evaluate the economic rationale for holding the shares.
Shares with diminished strategic value are sold incrementally andChanges in Cross-Shareholdings

Suppliers(Stocks)

100
80(¥67.6 billion)

80(¥74.8 billion)

73(¥61.5 billion)

66

60(¥69.1 billion)

63(¥46.9 billion)

55

NGOs, NPOs,
government
agencies

40

systematically. In addition, the exercise of voting rights related
to cross-shareholdings shall be performed after deciding in eachindividual case the purpose of the holdings from the standpoint of
increasing the corporate value of the Company and the relevant

54

20
0

2017.32018.32018.122019.12Times

Key department/site

Exhibitions

10 times

Online seminars

One time

General Meeting of Shareholders

One time

Briefings and small meetings for institutional
investors

Briefings Twice annually, One-on-one
meetings: 82 times

Online information and publications for investors

Publication of integrated report

Publication of internal newsletter

Published seasonally(published quarterly)

PR

Employee surveys

One time

Diversity

ESG education

Four times

CSR

Internal whistleblower system

Six cases

CSR

Disclose and raise awareness ofGreen Procurement Guidelines

One time

Procurement Division

Group education

One time

Water consumption volume and hazardous
substance product inspections

Water consumption four times annually
Chemical substances in products annually

CSR procurement surveys

One time

Factory tours, workshops

11 times

Factories, engineering
departments

Participation in projects to protect biodiversity

Four times

Business sites

Participation in neighborhood cleaning activities

21 times

Business sites

Marketing/engineeringIR

Financials

Shareholders/investors

Examples of engagement

ESG Initiatives

The Board of Directors selects managing officers fromthe Board of Directors decides whether to dismiss the

Succession
planning

reported to the Board of Directors where it is reviewed.

results briefings and briefings to overseas investors. In addition, theDirectors decides whether to dismiss the director or submits a
the General Shareholders’Meeting.

Corporate Philosophy and increase corporate value.

management can interact directly with shareholders, and theBased on the committee’s recommendation, the Board of
proposal seeking approval for the dismissal of the director to

the necessary commitment and ability to realize Nisshinbo's

about communication with shareholders and investors is routinely

Business Segmentswith a strong track record in corporate management and

The status of IR activities including measures and policies

to enhance the General Shareholders’Meeting, where senior

Management Strategy

Appoint

ProfileCommittee as an advisory body for the Board of Directors. As

If deemed necessary, the IR Director and other directors andCSR

2020.1255

ESG Initiatives̶Managing Risks and Opportunities

ComplianceManaging Risks and Opportunities

Based on Public Entity and Consistent Integrity – the fundamental spirit of Nisshinbo’s Corporate Philosophy, – the Group’s

Risk Management System

mission is to act with fairness and integrity to contribute to society through its business activities. To achieve our mission, we have

The Nisshinbo Group has established a risk management system, shown in the diagram below, to appropriately

formulated Business Conduct Guidelines in order to win trust from the public through fair and honest business activities.

ProfileESG Initiatives̶Complianceaddress business risks and minimize any losses associated with those risks. Additionally, in order to turn businessrisks into opportunities that support sustained growth, the Nisshinbo Group routinely works to identify and analyze

Nisshinbo has established a Corporate Ethics Committee to handle

Bribery Act. Nisshinbo updates the guidebook as necessary anduses it as part of its corruption prevention measures in the Group.

Ensuring Business Confidentiality

suspected or actual legal violations. Group employees and external

Nisshinbo signs non-disclosure agreements with suppliers toparties can submit reports to the system. Group employees canprevent any leak of confidential information such as intellectual

report their concerns internally to the Corporate Ethics Committee

property, technologies and expertise disclosed during the productor directly to an outside corporate attorney. All information

design and development stage and across all points of the supply

provided by whistleblowers is treated in the strictest of confidence

chain.

treatment. The Corporate Ethics Committee takes appropriate

We also conduct annual internal audits to check whether theGroup’s trade secrets are being managed appropriately.

Compliance Education

CSR Procurement Basic Policy
Nisshinbo has formulated the Nisshinbo Group CSR Procurement

In order to ensure fair and honest business practices, the Nisshinbo

Basic Policy, clarifying its stance on seven specific areas: legal

Group conducts compliance training for different employee

compliance, fair trade, information security, environmental

levels and work sites and provides training to employees prior toprotection, human rights, health and safety, and quality assurance.

From the fiscal year ended March 2017, we added annualcompliance training for manager-grade employees in the Group to
our list of KPIs in order to raise awareness about compliance. We
also created a compliance training manual for managers in both
Japanese and English to be used in training sessions across theGroup.
In addition, compliance training is provided at each subsidiary inaccordance with conditions in each country, region and industry.

Initiatives to Prevent Corruption
In recent years, countries worldwide have been reinforcing
regulatory systems and stepping up efforts to prevent and expose

1. To strictly observe all legal obligations and social norms

responding to related regulations overseas. The guidebook is
distributed to all subsidiaries, including overseas Group companies.

Risk Management
Oﬃce

4. To give due consideration to protection of the environment
5. To respect all basic human rights
6. To strive for a secure and healthy living and working
environment
7. To aim to ensure the quality and safety of all products andservices
We are working to extend our CSR initiatives across the entire
supply chain by asking suppliers to adhere to our principles inthose seven areas.

56

industrial
structureConﬁrmrisk
management
statusOperating environment

Identify risks for entire Groupand verify response measures

Report on status of urgent and high-priority risks

Note: HD means Nisshinbo Holdings Inc.

Key Risks and Opportunities● Risks ● Opportunities

Details

Response●• Impact on supply chains from major natural disasters causedby extreme weather• CO2 emission costs due to introduction of carbon tax• Costs to reduce CO2 emissions• Costs to respond to tighter rules on SOx/NOx emissions
worldwide• Impact on business activities from tighter rules ongreenhouse gas emissions• Develop business continuity plan (BCP) based on assumptionof major natural disasters, conduct training to improve Group’s
response to risk of business disruption• Take steps to reduce CO2 emissions• Introduce SOx/NOx removal equipment• Increase sales ratio for“products that contribute to the creationof a sustainable society”to 70% by 2030●

• Greater demand for fuel cell vehicles as hydrogen society
gains momentum• Growth in number of new ships built amid rising demand forbiomass fuel transportation• Expansion in businesses providing disaster prevention/
mitigation solutions to address rising wind and flood damage• Improve technological capabilities for developing fuel cell partsand materials• Increase production capacity for marine wireless communicationequipment to address rising demand for new biomass fueltransportation vessels• Sell water/river management systems, weather radars and otherdisaster prevention/mitigation solutions developed in Japan tocustomers overseas

Climate Change

information about international treaties and laws designed to

Corrupt Practices Act (FCPA) and its related guidelines, and the UK

ClimatechangeVerify major risks and risk developments, discuss responses

Board ofDirectors

profit, etc., to foreign public officials, etc.), the guidebook provides

overseas public officials in international transactions, the US ForeignConﬁrmrisk
management
statusBoard ofManagement

Competition Prevention Act (prohibition of provision of illicit

Corruption (UNCAC), OECD treaties on preventing corruption offramework

2. To always pursue business in a sound and fair manner
3. To properly manage all information

Internal risksMonthly
reviewBusiness portfolio
Capex/R&D
Attract/train
human resources
Regulatory Governance, etc. Changes inInstruct

Risk management
general manager

Implement
PDCA

External risks
Political/
economic

Appoint

In addition to information about Article 18 of Japan’s Unfairprevent corruption, such as the United Nations Convention Against

Annualreview

Person with ultimate
responsibility= President of HD

bribery and corruption. Nisshinbo has created a Corruption
Prevention Guidebook, which includes information about

Identify and evaluate risks,develop appropriate responses

Financials

overseas assignments.

Presidents and key
personnel from HD
and core operatingcompanies

Formulate plan for new ﬁscal year

ESG Initiatives

steps to deal with issues raised by reports.

Nisshinbo Holdings (HD)Japan RadioNew Japan Radio
Ricoh Electronic
DevicesNisshinbo Brake
Nisshinbo Mechatronics
Nisshinbo Chemical
Nisshinbo Textile

Business Segments

System to rapidly identify and prevent any reoccurrence ofand every effort is made to protect whistleblowers from unfair

an Environment and Energy Company group – a business strategy that aligns with the Group’s Corporate Philosophy.
Risk Management Structure

all compliance matters across the Group.
Nisshinbo has also established a Corporate Ethics Reporting

any changes in the operating environment, aiming to create new growth opportunities by contributing to society asManagement Strategy

Corporate Ethics Committee and Corporate
Ethics Reporting System

57

ESG Initiatives̶Managing Risks and Opportunities● Risks ● Opportunities

Details

Response• Consider country risks, etc., when determining appropriate
investment levels for each country/region• Impact on earnings from pandemics of previously
unknown diseases such as COVID-19●• Create new value by contributing to society throughmedical-related businesses• Provide appropriate support to management by forming
emergency response teams and aggregating andcommunicating information

Group Management●• Harness Group’s diverse strengths by integrating
businesses/organizations to drive innovation andincrease resilience to changes in operating environment●• Use new business resources to capture opportunities
that support sustained growth• Form project teams for each M&A deal to strengthen
PMI activities; Board of Directors to verify investment
effectiveness while building up internal expertise• Separate capex budget approval and implementation
approval functions, hedge risks by adjusting capex in
response to changes in operating environment• Difficulties hiring and retaining talented people●• Overlap between Corporate Philosophy and growinginterest in ESG among younger people, leading to morehiring opportunities• Use RPA, IoT and other tools to increase automation andrealize labor savings• Implement strategic PR activities to improve corporate
visibility and image• Provide human resources and financial support to joint
research projects with academia• Use targeted local recruitment activities

Rapid Technological Innovation

58●• Take risks based on balance between proactive anddefensive governance●●• Building on pioneering steps such as introduction of outside
director system in 2006, adoption of HD system in 2009 andtermination of advisor/consultant system in 2017, establish
advanced governance system that balances managementtransparency with bold risk-taking• Loss of trust, claims for damages or product recalls due
to quality issues or defects with products or services• Use risk management system to minimize risk probability
and potential impact• Establish quality assurance team at HD to oversee quality
assurance and product safety activities at Group companies• Unauthorized disclosure of personal information,customer information or trade secrets• Information leaks or data corruption caused by computerviruses• Continuous training and annual internal audits to assess
information security• Use risk management system to minimize risk probability
and potential impact

Compliance●• Loss of trust and damage to corporate value caused bylegal violations such as corruption or anti-competitive
practices, or by corporate behavior that diverges fromsocial norms• Messaging from president of HD to underscore importanceof fair business practices• Continuous implementation of compliance training• Severe penalties for misconduct• Appoint outside directors with legal background

Fraud/Illegal conduct●

Human Resources●• Increasing complacency in governance

Financials• Mistakes with M&A deals and major investment plans●

Information Security• Reform business portfolio to align with changes in issues
faced by society, improve cash flow
• Improve efficiency by overhauling Groupwide organizations
and using outsourcing• Maintain Group integration by consolidating oversightof Group company management at HD and establishing
financial discipline

M&A/Major Investments●

Business Management

ESG Initiatives●• Management issues due to greater business diversity• Large number of duplicate functions among Groupbusinesses• Establish human rights team at HD to maintain and raiseawareness across the Group

Quality Issues

Communicable Diseases●• Widespread sexual and power harassment that
undermines the working environment

Business Segments●• Use diversified business strategy to mitigate impact on earnings
from sudden changes in operating environment• Build reliable relationships with multiple suppliers• Use forward exchange contracts, etc., to minimize exchange raterisk
• Gather risk information from business sites in each country/
region and feed back to management●

Management Strategy

Fluctuations in Product Markets, Exchange Rates and Raw Material Prices• Changes in supply-demand balance in product markets due
to fluctuations in economy• Impact on earnings from significant volatility in raw material
prices• Impact on earnings from fluctuations in exchange rates• Impact from changes in rules or regulatory frameworks
governing products and services in each market

Response
Profile• Impact on operations from geopolitical developments

Details

Human Rights Issues

Geopolitical Risk●

● Risks ● Opportunities• Financial window-dressing, accounting irregularities, etc.

• Use internal control system and corporate ethics reporting
system to prevent misconduct• Regular rotation to prevent misconduct

Workplace Accidents●• Impact on business of failure to ensure employee healthand safety worldwide• HD and Group companies work together to roll out highlevel health and safety approaches from Japan to sites
worldwide

Business Reputation●• Dramatic changes in existing markets due totechnological innovation• Decrease in competitiveness due to delays in technology
development and product development plans• Management decides to continue/cancel R&D projects
based on regular assessments●• Opportunities to develop groundbreaking technologies
and tap into growth by combining resources from diverse
businesses• Form teams by flexibly assigning personnel from various
Group businesses• In April 2020, the Digital Business Department wasestablished at HD to promote the development of advanced
technologies• Alliances with other companies and start-ups●• Impact on business from misreporting in media, spreadof rumors or online rumors• Labelled as target for divestment by investors• Routinely monitor situation as part of risk management• Continuously share information with major ESG investors
and ESG index research firms to identify trends

Cross-shareholdings/Idle Real Estate●• Fluctuations in market value• Steadily reduce exposure to cross-shareholdings in line with
Corporate Governance Policy• Increase value by redeveloping real estate59Director and Executive Managing Officer

Kazunori Baba

ESG Initiatives̶Board of Directors, Audit & Supervisory Board Members and Managing Officers

Chief of Corporate Strategy Center

Apr. 1983 Joined the Company

Apr. 2009 Managing Officer, Senior Manager of Corporate Governance Department of Corporate Strategy Center andSenior Manager of Human Resources & Administration Service Department of Business Support Center ofBoard of Directors, Audit & Supervisory Board Members and Managing Officers

the Company (served concurrently)

June 2013 Deputy Chief of Business Support Center of the Company

As of March. 30, 2021

June 2014 Director and Managing Officer of the Company

President and Representative Director of Nisshinbo Textile Inc.

Board of Directors

ProfileJune 2016 Executive Managing Officer of the Company

Mar. 2019 Director and Executive Managing Officer (to the present), and Chief of Corporate Strategy Center of the Company (to the
Number of Company’s shares held: 16,350 sharespresent)

Chairman and Representative Director

Masaya Kawata

Director and Managing Officer

June 2006 Managing Officer and General Manager of Human Resources Division of the Company

Yasuji Ishii

Apr. 2007 Deputy General Manager of Accounting and Finance Division of the Company (served concurrently)
June 2007 Director of the Company

Apr. 1988 Joined the Company

Apr. 2008 Deputy Chief of Business Support Center of the Company

Apr. 2011 Managing Officer and General Manager of Production of Friction Materials Division of Nisshinbo Brake Inc.

Apr. 2009 President and Representative Director of Nisshinbo Brake Inc.

Apr. 2013 Executive Managing Officer, Senior Manager of Strategy Office (served concurrently) and, General Manager of Product

June 2010 Director and Executive Managing Officer of the Company

Division (served concurrently) and Engineering Division of Nisshinbo Brake Inc. (served concurrently)

June 2011 Deputy Chief of Corporate Strategy Center and General Manager of Business

June 2013 Director and Executive Managing Officer of Nisshinbo Brake Inc.

Development Division of the Company (served concurrently)

Jan. 2015 Director, Executive Managing Officer and Senior Manager of Brake R&D Division of Nisshinbo Brake Inc.

President and Representative Director of Nisshinbo Chemical Inc.

Apr. 2015 Vice President and Director of Nisshinbo Brake Inc.

June 2012 Director and Senior Executive Managing Officer of the Company

June 2015 Managing Officer of the Company

President and Representative Director of Nisshinbo Mechatronics Inc.

June 2017 President and Representative Director of Nisshinbo Brake Inc. (to the present)

June 2013 President and Representative Director of the Company

Mar. 2019 Chairman and Representative Director of the Company (to the present)

Business Segments

Number of Company’s shares held: 126,927 shares

Management Strategy

Apr. 1975 Joined the Company

Mar. 2019 Director and Managing Officer of the Company (served concurrently, to the present)
Number of Company’s shares held: 9,865 shares

President and Representative Director

Masahiro Murakami

Director and Managing Officer

Apr. 2008 Managing Officer, Senior Manager of Corporate Governance Department of Corporate Strategy Center, Senior Manager

Senior Manager of Finance, Accounting & ITof Human Resources & Administration Service Department of Business Support Center (served concurrently) and General
Manager of Property Management Department of the Company (served concurrently)

Service Department of Corporate Strategy Center

Corporate Strategy Center (served concurrently) and Senior Manager of Finance, Accounting & IT Service Department ofJan. 2014 Senior Manager of Finance and Accounting Group of Finance, Accounting & IT Service Department of Business Support

Apr. 1986 Joined the Company

Apr. 2009 Deputy Chief of Business Support Center (served concurrently), Senior Manager of Corporate Strategy Department ofCenter of the Company

Business Support Center of the Company (served concurrently)

June 2015 Senior Manager of Finance, Accounting & IT Service Department of Business Support Center of the Company

June 2010 Director and Chief of Business Support Center of the Company (served concurrently)
Jan. 2012 Responsible for Property Management Department of the Company

Apr. 2018 Managing Officer and Senior Manager of Finance, Accounting & IT Service Department of Business Support Center of theJune 2014 Chief of Corporate Strategy Center of the Company (served concurrently)

Mar. 2020 Director and Managing Officer of the Company (to the present)

Company

June 2012 Director, Executive Managing Officer and Deputy Chief of Corporate Strategy Center of the Company (served concurrently)

Apr. 2020 Senior Manager of Finance, Accounting & IT Service Department of Corporate Strategy Center of the Company (to theJune 2015 Director and Senior Executive Managing Officer of the Company

June 2016 Representative Director and Senior Executive Managing Officer of the Company
June 2018 Vice President and Representative Director of the Company

Number of Company’s shares held: 11,165 shares

Financials

Number of Company’s shares held: 51,810 shares

ESG Initiatives

Shuji Tsukatani

Apr. 1982 Joined the Company

present)

Mar. 2019 President and Representative Director of the Company (to the present)

Director and Senior Executive Managing Officer

Director (Outside Director)

Apr. 1982 Joined Japan Radio Co., Ltd.

Apr. 1973 Joined Japan Development Bank (currently Development Bank of Japan Inc.)

Takeshi Koarai

Keiji Taga

Apr. 2010 General Manager of Technical Development Department of Research and Development Headquarters of Japan Radio Co., Ltd.

Oct. 1999 General Manager of Urban Development Department of Development Bank of Japan Inc.

Apr. 2011 Director of Laboratory of Research and Development Headquarters of Japan Radio Co., Ltd.

June 2002 General Manager of General Affairs Department of Development Bank of Japan Inc.

Apr. 2012 Executive Officer and General Manager of Research and Development Headquarters of Japan Radio Co., Ltd.

June 2004 Executive Director of Development Bank of Japan Inc.

June 2012 Executive Officer and Director of Laboratory of Japan Radio Co., Ltd.

Oct. 2008 Director and Executive Managing Officer of Development Bank of Japan Inc.

Apr. 2017 Executive Officer and Deputy General Manager of Technical Headquarters of Japan Radio Co., Ltd.

June 2009 Vice President and Representative Director of Tokyo Ryutsu Center Inc.

June 2017 Director, Executive Officer, General Manager of Technical Headquarters, andPresident and Representative Director of TRC Service Co., Ltd.

Executive of Research and Development of Japan Radio Co., Ltd.

June 2013 President and Representative Director of Tokyo Ryutsu Center Inc.

Headquarters, and Executive of Business Creation of Japan Radio Co., Ltd.

June 2017 Chairman and Director of DBJ Asset Management Co., Ltd.

Apr. 2019 Director, Executive Officer, General Manager of Technical Development

Number of Company’s shares held: 768 sharesMar. 2020 President and Representative Director of Japan Radio Co., Ltd. (to the present)

Mar. 2021 Director and Senior Executive Managing Officer of the Company (served concurrently, to the present)

Director of TRC Service Co., Ltd.

Number of Company’s shares held: 0 shares

June 2018 Adviser of DBJ Asset Management Co., Ltd.

Mar. 2019 Outside Director of the Company (to the present)

Director and Executive Managing Officer

Director (Outside Director)

Feb. 1985 Joined New Japan Radio Co., Ltd.

Apr. 1987 Joined Ryoka Systems Inc.

Ryo OguraShinobu Fujino

June 1999 Director of New Japan Radio Co., Ltd.

June 2003 Opened a counseling business office (to the present)
June 2015 Outside Director of the Company (to the present)

Apr. 2001 General Manager of Standard IC Division of New Japan Radio Co., Ltd.
June 2004 Managing Director of New Japan Radio Co., Ltd.

Apr. 2005 Executive of Semiconductor Business Divisions and General Manager of
Semiconductor Technology Headquarters of New Japan Radio Co., Ltd.

Apr. 2006 General Manager of Semiconductor Production Headquarters of New Japan Radio Co., Ltd.
June 2009 Representative Director and Executive Managing Director of NJR FUKUOKA CO., LTD.
June 2011 President and Representative Director of New Japan Radio Co., Ltd.

June 2016 Director and Executive Managing Officer of the Company (to the present)
Number of Company’s shares held: 43,715 shares

60

Sept. 2018 Chairman and Representative Director of New Japan Radio Co., Ltd. (served concurrently, to the present)

Number of Company’s shares held: 0 shares

61

Director (Outside Director)

Outside Audit & Supervisory Board Member

Hiroaki Yagi

Atsushi Yamashita

Apr. 1981
Jan. 2007
Dec. 2015
Sept. 2016
July 2018
Mar. 2019
June 2019

Number of Company’s shares held: 0 shares

Apr. 1988
May 2001
May 2011
Oct. 2014
Mar. 2019

Number of Company’s shares held: 0 shares
Director (Outside Director)

Outside Audit & Supervisory Board Member

Apr. 2014
Apr. 2015
Apr. 2015
Mar. 2020

Assistant Professor of Department of Economics, Southern Illinois University Carbondale
Associate Professor of Faculty of Economics, Tokyo Metropolitan University
Associate Professor of Graduate School of Economics/Faculty of Economics, Hitotsubashi University
Professor of Graduate School of Economics/Faculty of Economics, Hitotsubashi University
Professor of Institute of Innovation Research, Hitotsubashi University
Visiting Professor of Department of Economics, Yale University
Faculty Fellow, Research Institute of Economy, Trade and Industry (RIETI)
Director of Research, National Institute of Science and Technology Policy (NISTEP)
Professor of Graduate School of Commerce & Management/Faculty of Commerce & Management, and Institute of
Innovation Research, Hitotsubashi University
Professor of Faculty of Social Innovation/Graduate School of Innovation and Social Studies,
Seijo University (to the present)
Professor Emeritus of Hitotsubashi University
Faculty Fellow, RIETI
Outside Director of the Company (to the present)

Apr. 1980
Mar. 2002
June 2013
June 2014
Mar. 2017
Feb. 2018
Mar. 2019
June 2019
Mar. 2020
Number of Company’s shares held: 0 shares

Joined Shikoku Chemicals Corporation
General Manager of Corporate Planning Department of Shikoku Chemicals Corporation
Managing Officer of Shikoku Chemicals Corporation
Director, Managing Officer, General Manager of Corporate Planning and Secretariat (concurrent posts) of Shikoku Chemicals
Corporation
Director, Managing Officer, Deputy Head of Planning and Management of Shikoku Chemicals Corporation
Director, Managing Officer, Head of Osaka Branch Office of Shikoku Chemicals Corporation
Outside Audit & Supervisory Board member (to the present)
Director, Executive Managing Officer (to the present), Head of Corporate Strategy Division and Business Planning Division(served concurrently) of Shikoku Chemicals Corporation
Head of Corporate Strategy Division and Business Development Division (served concurrently, to the present) of Shikoku
Chemicals Corporation

Director (Outside Director)

Naoko TaniManaging Officers
President

Masahiro Murakami*

Senior Executive
Managing Officer

Takeshi Koarai*

Executive Managing Officers

Ryo Ogura*
Kazunori Baba*

ESG Initiatives

Apr. 1978 Joined Suntory Limited
June 1980 Joined Marcom International Inc.
Sept. 1985 Joined SEMI Japan
Apr. 2001 Joined Semiconductor Portal, Inc.
Director of Semiconductor Portal, Inc.
Nov. 2002 Representative Director of Semiconductor Portal, Inc.
June 2007 President and Representative Director of Semiconductor Portal, Inc. (to the present)
Mar. 2021 Outside Director of the Company (to the present)

Managing Officers

Yasuji Ishii*
Shuji Tsukatani** Concurrent board member

Financials

Number of Company’s shares held: 0 shares

Audit & Supervisory Board Members
Audit & Supervisory Board Member

Toshihiro Kijima

Apr. 1979 Joined the Company
Apr. 2007 Managing Officer and Deputy General Manager of Paper Products Division of the Company
Apr. 2009 Director, Managing Officer, General Manager of Strategic Planning Department, General Manager of Specialty Paper Divisionof Nisshinbo Paper Products Inc.
June 2010 Managing Officer and Deputy General Manager of Business Development Division of the Company, Director and Senior
Executive Managing Officer of Nisshinbo Chemical Inc.
June 2012 Vice President, Director of Nisshinbo Chemical Inc.
June 2013 Director of the Company, General Manager of Business Development Division of the Company, President and Representative
Director of Nisshinbo Chemical Inc.
June 2016 Executive Managing Officer of the Company Nisshinbo Holdings Inc.
Mar. 2019 Standing Auditor & Supervisory Board Member (to the present)

Executive Managing Officer

Executive Managing Officer

Managing Officer

Managing Officer

Akihiro Ishizaka

Makoto Sugiyama

Satoru Taji

Kenichi Morita

Strategy Department

Department, Diversity

Ricoh Electronic Devices Co., Ltd.

New Japan Radio Co., Ltd.

Senior Manager of Corporate

Senior Manager of CSR

President,

President,

Development Department

Managing Officer

Toshihiro Masuda
President,

Nisshinbo Mechatronics Inc.

and Human Resources andAdministration Service Department

Number of Company’s shares held: 14,130 shares
Audit & Supervisory Board Member

Takumi Ohmoto
Apr. 1978
Jan. 2007
June 2010
June 2015

Joined the Company
Manager of Finance Department and Accounting Department of Accounting and Finance Division of the Company
Senior Manager of Finance, Accounting & IT Service Department of Business Support Center of the Company
Standing Auditor & Supervisory Board Member (to the present)

Managing Officer

Managing Officer

Managing Officer

Managing Officer

Yasuo Imashiro

Kazuo Saito

Yuzo Matsui

Ikuo Takahashi

General Manager,

Managing Director,

Kaoru Murata

Business Development

Nisshinbo Singapore Pte. Ltd.

Nisshinbo Textile Inc.

Management Department

Nisshinbo Chemical Inc.

Managing Officer

Number of Company’s shares held: 19,100 shares

62

Business Segments

Aug. 1984
July 1985
Apr. 1992
Apr. 1993
Apr. 1999
Jan. 2000
Apr. 2000
Apr. 2004
Apr. 2012Management Strategy

Mitsunori Watanabe

Hiroyuki Chuma

Number of Company’s shares held: 0 shares

Registered as an attorney-at-law (to the present), joined Tanaka & Takahashi Law Office
Joined Clifford Chance Law Office
Joined K&L Gates LLP
Joined Sonderhoff & Einsel Law and Patent Office (to the present)
Outside Audit & Supervisory Board member (to the present)

ProfileAppointed as Public Prosecutor
Special Investigation Director of Tokyo District Court Public Prosecutors Office
Chief Prosecutor of Tokyo District Court Public Prosecutors Office
Deputy Prosecutor-General of Supreme Public Prosecutors Office
Superintending Prosecutor of Tokyo High Public Prosecutors Office
Registered as attorney-at-law (to the present)
President of Japan International Training Cooperation Organization (JITCO)(currently Japan International Trainee & Skilled Worker Cooperation Organization) (to the present)
Mar. 2020 Outside Director of the Company (to the present)

President,

Senior Manager of Property

President,

Division

63

Financials
Eleven-Year Summary
2012.032013.03

2014.032015.032016.032017.032018.032018.122019.122020.12¥325,555¥379,340¥450,693¥494,350¥523,758¥533,989¥527,274¥512,048¥416,221¥509,661¥457,051

112,820

169,907

175,308

187,743

209,116

205,368

190,852

193,621̶̶̶Wireless and Communications

̶

̶

̶

̶

̶

̶

̶

̶

90,427

152,213

144,312Micro Devices

̶

̶

̶

̶

̶

̶

̶

̶

53,77765,286

61,141

Automobile Brakes

46,11947,450118,849

148,699

161,887

165,037

146,062

154,205

135,008

131,338

114,827

Precision Instruments

32,02025,191

24,52028,65528,60829,52560,68764,91862,21965,42951,419Chemicals

7,284

8,258

8,150

8,810

8,138

8,285

9,483

11,285

8,173

9,391

9,577

Textiles

57,40060,96454,73654,63051,07360,12755,84254,64043,66049,50533,957

Papers30,32630,22030,524

31,686

31,28032,58532,648̶̶̶̶Real Estate

12,437

9,082

15,367

10,567

9,246

8,358

8,084

8,406

4,237

11,655

20,279Other Businesses

27,14928,26823,23923,56024,41024,704

23,61624,97318,72024,844

21,539Operating Income (Loss)

19,843

4,170

13,394

13,175

13,744

12,617

4,890

15,086(2,506)

6,482

1,248

Net Income (Loss) Attributable to Owners of the Company

11,185

9,416

6,418

9,012

13,694

10,776

3,575

26,352(7,183)(6,604)

13,541Equity¥211,557¥213,751¥242,623¥276,865¥306,938¥284,472¥275,753¥290,434¥264,849¥252,536¥242,068

Total Assets

479,852

534,584

551,933

611,311

678,486

651,793646,288

651,959622,381

617,528

581,204

Capital Expenditures

12,80015,705

20,12319,89636,90922,86230,50530,10327,19932,38725,870Depreciation and Amortization

13,15814,55018,96921,48623,111

22,571

22,264

22,183

19,816

24,955

22,125

Profile2011.03
Operating Results (millions of yen)
Net Sales
Electronics

Management Strategy
Business Segments
ESG Initiatives

Financial Position (millions of yen)

Financials

Cash Flows (millions of yen)
Net Cash Provided by Operating Activities¥16,529¥12,974¥34,095¥26,075¥37,120¥39,566¥26,768¥32,415¥15,495¥26,249¥42,590

Net Cash Provided by (Used in) Investing Activities

11,591(57,861)(10,973)(19,862)(21,271)(22,793)(31,429)(1,798)(20,723)(21,759)(6,321)Net Cash Provided by (Used in) Financing Activities

703

16,835(24,073)(2,321)(6,238)(9,044)

3,595(34,785)

11,936(10,065)(24,230)¥63.32¥53.83¥36.74¥51.60¥80.33¥67.93¥22.52¥160.59¥(43.26)¥(39.45)¥81.381,036.80

1,063.19

1,198.67

1,369.78

1,634.07

1,472.26

1,444.94

1,659.29

1,457.26

1,431.35

1,375.19

15.00

15.00

15.00

15.00

15.00

30.00

30.00

30.00

30.00

30.00

30.00

Shareholders’Equity Ratio

38.0

34.7

37.9

39.1

38.2

35.9

35.5

41.2

40.1

38.6

39.4

Return on Assets (ROA)

2.7

1.9

1.2

1.5

2.1

1.6

0.6

4.1

(1.1)

(1.4)

2.3

Return on Equity (ROE)

6.1

5.1

3.2

4.0

5.5

4.4

1.5

10.6

(2.8)

(2.7)

5.8

Payout Ratio

23.7

27.9

40.8

29.1

18.7

44.2

133.2

18.7

̶

̶

36.9

Number of Employees

18,292

22,30422,08322,052

21,387

23,05523,256

23,10422,85022,88921,725

Number of Patents Approved

1,986

1,986

2,293

2,448

2,424

2,441

2,402

2,400

2,682

2,910

3,014

̶

̶

̶

1.372

1.330

1.267

1.311

1.279

1.320

1.259

1.306

Per Share（yen）
Net Income (Loss) Attributable to Owners of the Company
Shareholders’Equity
Cash Dividends
Key Ratios（%）

ESG Indicators

Greenhouse Gas Emissions per Unit of Sales (t-CO2/million yen)

Notes: 1. In the fiscal year ended March 2017, Iwao & Co., Ltd. was merged with Nisshin Toa Inc., both of which are consolidated subsidiaries. The apparel textile operations of Iwao & Co., Ltd. includedin the other businesses segment were reclassified under the textiles business segment as a result. Figures from the fiscal year ended March 2013 have been adjusted to reflect this change.
2. The Group’s elastomer operations were transferred from the chemicals business to the textiles business in the fiscal year ended March 2016. Figures from the fiscal year ended March 2015
have been adjusted to reflect this change.
3. The Company changed its fiscal year-end from March 31 to December 31, effective from the fiscal period ended December 31, 2018.
4. The electronics business segment was separated into wireless and communications and micro devices as part of adjustments to earnings management classifications in the fiscal period
ended December 2019.

64

65

Financials

Management’s Discussion and Analysis

Fund Procurement
In the fiscal year under review, with consideration for the long-term risks posed by the impact of COVID-19, the Company increased
commitment line contracts with major banks by ¥5,000 million, renewing them for ¥30,000 million. The Company also continues to have

◦ Due to the impact of COVID-19, net sales in the micro device, automobile brakes, precision instruments and textiles businesses declined
as Group sales decreased.
◦ Net income attributable to owners of the Company returned to the black due to an increase in gain on sales of securities.

In 2020, despite significantly higher sales in the real estate business, COVID-19 caused sales to decline in the micro devices, automobile brakes,

Cash Flows

Capital Expenditures

Cash Flows from Operating Activities

Based on focused capital investment in long-term growth fields,

Cash provided by operating activities totaled ¥42,590 million

the Nisshinbo Group is committed to cutting-edge manufacturing(US$406 million). This was mainly due to profit before income taxes

equipment and environmental measures, engaging in capitalof ¥20,030 million and depreciation of ¥22,125 million.

investments to meet growing demands in developing markets. In

precision instruments and textiles businesses, resulting in net sales of ¥457,051 million (US$4,353 million), down ¥52,610 million (10.3%) year

the fiscal year under review, capital expenditures totaled ¥25,870
Cash Flows from Investing Activities

million (US$246 million). In the wireless and communications

attributable to owners of the Company amounted to ¥13,541 million (US$129 million), an improvement of ¥20,145 million year on year, due toCash used in investing activities totaled ¥6,321 million (US$60

business, ¥6,877 million was invested in the Japan Radio Group,

extraordinary income from gains on sale of investment securities and extraordinary losses due to impairment losses and other factors.

million), mainly reflecting cash used of ¥24,601 million for the

mainly for backbone IT systems and the reconstruction of officepurchase of property, plant and equipment.

buildings. In the micro devices business, ¥2,584 million was

Net Sales

Operating Income/Loss(billions of yen)(billions of yen)

600

20

500

15

400

10

300

0

100

17.3

18.3

18.12

18.12

(adjusted)

19.12

20.12

-5

manufacturing and research-and-development facilities, as well

Cash used in financing activities totaled ¥24,230 million (US$231

as ¥2,235 million for research-and- development facilities andmillion). This was mainly due to an ¥11,210 million net decrease

backbone IT systems. In the automobile brakes business, ¥4,114

in short-term borrowings, ¥36,519 million in proceeds from long-

million was invested in the TMD Group, mainly for friction material

term borrowings and ¥41,468 million in repayments of long-term

manufacturing facilities, whereas ¥1,544 million was invested inborrowings.

Nisshinbo Automotive Manufacturing Inc., mainly for manufacturing
facilities for friction materials complying with copper content

17.3

18.3

18.12

18.12

(adjusted)

19.12

20.12

As a result of the above, cash and cash equivalents at the end of
the fiscal year totaled ¥48,699 million, an increase of ¥11,431

Note: Operating income for the fiscal year ended December 2018 has been adjusted tofacilitate year-on-year comparison.

million from the end of the previous fiscal period.

regulations.

ESG Initiatives

5

200

0

invested in New Japan Radio Co., Ltd., mainly for electronic device
Cash Flows from Financing Activities

Business Segmentson year. Lower net sales resulted in operating income of ¥1,248 million (US$12 million), down ¥5,234 million (80.7%) year on year. Net income

Management Strategy

Operating Results

access to approved funding through overdraft facilities and commercial paper, ensuring necessary levels of liquidity.

ProfileHIGHLIGHTS

Capital Expenditures(billions of yen)

In principle, there are two distributions per fiscal year: the interim dividend and the year-end dividend. We aim for a consolidated payout

20

25

ratio of around 30% as we implement the stable and continuous distribution of dividends. In addition, if we confirm that internal reserves are

15

sufficient for future growth strategies, our policy is to engage in more proactive shareholder returns, including consideration for the purchase10
5of our own shares. In principle, we will cancel treasury shares, but in the event an M&A project will contribute substantially to increased

0shareholder value, we will consider the utilization of stock swaps. In the fiscal year under review, the full-year dividend amounted to ¥30(US$0.29) per share.

Total assets as of December 31, 2020, stood at ¥581,204 million (US$5,535 million), a decline of ¥36,324 million from the end of the previous
fiscal period. This was mainly due to an increase of ¥11,431 million for cash and cash equivalents and decreases of ¥14,243 million forreceivables and ¥23,264 million for investment securities. Total liabilities were ¥339,136 million (US$3,230 million), a decrease of ¥25,856
million from the end of the previous fiscal period. This was mainly due to decreases of ¥11,302 million in short-term bank loans and ¥6,739
million in deferred tax liabilities. Equity totaled ¥242,068 million (US$2,305 million), a decline of ¥10,468 million from the end of the previous
fiscal period. This was mainly due to an increase of ¥8,549 million in retained earnings and decreases of ¥13,789 million in net unrealized
gain on available-for-sale securities and ¥4,968 million in foreign currency translation adjustments. As a result of the above, the consolidated
shareholders’equity ratio increased 0.8 percentage point to 39.4%.
Total Assets(billions of yen)(billions of yen)

700
600
500
400
300
200
100
0

300

66

17.3

18.3

18.12

19.12

20.12

20.12

mobility area, we will integrate wireless communication technologies with technologies used in electronic devices, mechatronics and chemicals
to expand business across the Group, while contributing to the creation of future societies by providing products and services in the fields ofinfrastructure and safety and life and healthcare. In automotive products, Nisshinbo will increase its global presence through the development
and sales promotion of industry-leading copper-free friction materials; develop carbon bipolar plates, platinum catalyst substitutes and othercomponents for fuel cell vehicles; supply devices; and develop sensors that are key for autonomous driving and developing communication200

Selection of Accounting Standards

150

The Nisshinbo Group currently uses Japanese accounting standards. However, given that the Company’s basic management policy is todevelop its business globally, overseas operations will likely account for a growing share of consolidated earnings. Thus, we are considering

50

19.12

sustainable societies. While flexibly and proactively incorporating the new paradigm brought by COVID-19 into our business growth, in the core

the Group to support safe and energy-efficient operations. The Nisshinbo Group is targeting ROE of 12% in 2025.

100

18.12

realization of super smart societies as an Environment and Energy Company group focused on preserving the global environment and creatingship operation, satellite communication, and aircraft and drone control systems, as well as using the data gathered from products developed by

250

18.3

With its corporate philosophy“Change and Challenge! For the creation of the future of Earth and People,”the Nisshinbo Group targets the

networks linking automobiles with traffic infrastructure. In addition, we are developing radar, sensors and other devices needed for autonomous
Equity17.3

16.3

Medium-term Management Strategy

Financial Position

16.3

Financials

Dividends

30

0voluntarily adopting International Financial Reporting Standards (IFRS), a common set of global accounting standards. At present, no final
16.3

17.3

18.3

18.12

19.12

20.12

decision has yet been made regarding timing and other factors related to the voluntary adoption of these standards.
67

Financials

Consolidated Balance Sheet
December 31, 2020

Millions of Yen

2020

2019

2020

¥48,699¥37,268$463,800

1,848

282

17,600Receivables:
Trade notes

18,13320,809172,695

Trade accounts

96,456106,294

918,629

Unconsolidated subsidiaries
and affiliates

2020

2019

807

1,127

7,686

21,08023,483200,762

OTHER INCOME (EXPENSES):

37,34837,873355,696

Unconsolidated subsidiaries
and affiliates

1,315

607

Equity in earnings of an unconsolidated subsidiaries and affiliates

2,574

3,655

24,514

Accrued expenses

14,773

14,836140,695

Loss on impairment of long-lived assets(3,837)(16,181)(36,543)

Gain on sales of securities

71,162

202,852

231,023

1,931,924

292,259

299,930

2,783,419

Long-term debt

57,09147,686

543,724

Liability for retirement benefits

52,80451,807502,905

Deferred tax liabilities

12,136

18,875

115,581

11,906

10,655

113,390

Total

560,610560,657

5,339,143

Accumulated depreciation(391,685)(385,793)(3,730,333)

Net property, plant, andequipment

168,925

174,864

1,608,810

INVESTMENTS AND OTHERASSETS:
Investment securities
Investments in and advances
to unconsolidated
subsidiaries and affiliates
Deferred tax assets

55,61278,876529,638

31,647
4,586

32,6955,250

301,400
43,676

4,595

5,101

43,762

Other

23,58020,812

224,571

TOTAL

14,253

15,601

135,733

Total long-term liabilities

136,284

133,969

1,297,943

Total liabilities

339,136

364,992

3,229,867

Other long-term liabilities

EQUITY:
Shareholders' equity:
Common stock—authorized,
371,755,000 shares; issued,
178,978,479 shares in 2020
and 178,894,764 shares in2019

27,66927,640263,514

Capital surplus

20,45020,421

194,762

Retained earnings

174,098

165,549

1,658,077(15,950)(15,947)(151,905)

Total shareholders' equity

206,267

197,663

1,964,448

120,020¥581,204

142,734¥617,528

1,143,047$5,535,276

Deferred gain (loss) on
derivatives under hedge
accounting

25,782

39,571

245,543(8,740)178,876

20,030(2,258)

190,762

Current

7,962

5,438

75,829Deferred

(593)

(826)

(5,648)

7,369

4,612

70,181

12,661(6,870)120,581

(880)

(266)

(8,381)¥13,541¥(6,604)$128,962

Yen

U.S. Dollars¥81.38¥ (39.45)

$0.78

30

30

0.29

INCOME (LOSS) BEFORE INCOME TAXESINCOME TAXES:

Total income taxes
NET INCOME (LOSS)PER SHARE OF COMMON STOCK:Net income (loss)

Consolidated Statement of Comprehensive (Loss) Income
Millions of Yen

Thousands of U.S. Dollars(Note)

2020

2019

2020

¥12,661¥(6,870)$120,581(13,787)

5,583(131,305)

22

74

210

(5,004)(1,549)(47,657)

Postretirement liability adjustments

927

1,177

8,828

Equity in earnings (loss) of unconsolidated subsidiaries and affiliates

13

(304)

124

(17,829)

4,981(169,800)¥(5,168)¥(1,889)$(49,219)

Owners of the Company¥(4,296)¥(1,263)$(40,914)

Noncontrolling interests

(872)

(626)

(8,305)NET INCOME (LOSS)OTHER COMPREHENSIVE (LOSS) INCOME:(19)

Foreign currency translation
adjustments(1,158)3,810(11,029)

Postretirement liability
adjustments(2,017)(2,915)(19,210)

22,60540,442

215,285

Stock acquisition rights

151

168

1,438

Noncontrolling interests

13,045

14,263

124,238

242,068

252,5362,305,409¥581,204¥617,528$5,535,276

TOTAL(3,476)

18,782Other income (expenses)—net

Year Ended December 31, 2020(24)

Total equity

230

Cash dividends

(2)

Total

(365)

NET INCOME (LOSS) ATTRIBUTABLE TO OWNERS OF THE COMPANY

Treasury stock—at cost,
12,549,457 shares in 2020
and 12,545,648 shares in
2019

Net unrealized gain (loss)
on available-for-salesecurities(8,657)

Other—net

NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS

Accumulated othercomprehensive income:

Goodwill

Total investments andother assets

LONG-TERM LIABILITIES

182,962(1,929)Net unrealized (loss) gain on available-for-sale securities
Deferred gain on derivatives under hedge accounting
Foreign currency translation adjustments

Total other comprehensive (loss) income
COMPREHENSIVE LOSSTOTAL COMPREHENSIVE LOSS ATTRIBUTABLE TO:

Note: The translations of Japanese yen amounts into U.S. dollar ($) amounts are included solely for the convenience of readers outside Japan and have been made at the rate of ¥105 to $1, theapproximate rate of exchange at December 31, 2020.

68

69

Financials

Other

Total current liabilities

3,421

(909)

ESG Initiatives

8,395

19,211Business structure improvement expenses

Business Segments

Gain on sales of property, plant, and equipment

7,472

64,79012,524

752

187,781

8,254

18,390(10,838)

98,10520,026

6,803

2,590
(1,133)106

19,717

Construction in progress

1,931(1,138)14,240

Other current liabilities

3,313,924

Interest and dividend income

79

1,108,057

348,790

Operating income

10,301

Other

121,848

347,962

Gross profit

Interest expense

116,346

Machinery, equipment andtools

11,886

Trade accounts

60,152

1,520,401

860,657

6,482

Trade notes

4,092

157,800

94,165

1,248

SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES

6,316

159,642

90,369266,581

Accrued income taxes

Buildings and structures

872,543

39,818(5,924)

326,638

3,480,324

100,647

27,991(588)

35,158409,01491,617

Current portion of long-term
debt

(622)

34,297

365,434

285,714

Allowance for doubtfulreceivables

Land

COST OF SALES$335,686

30,00029,714

PROPERTY, PLANT AND
EQUIPMENT:

2020$4,352,867¥46,5494,495

Total current assets

2019¥509,661

30,0003,120

Other current assets

2020¥35,247

Payables:Thousands of U.S. Dollars(Note)¥457,051

Commercial paper

Short-term bank loans

Millions of Yen

NET SALES

2020

Other

Inventories

Year Ended December 31, 2020

Management Strategy

Time deposits

LIABILITIES AND EQUITYCURRENT LIABILITIES:CURRENT ASSETS:
Cash and cash equivalents

Millions of Yen

Thousands of U.S.
Dollars (Note)

ProfileASSETS

Consolidated Statement of Profit or Loss
Thousands of U.S.
Dollars (Note)Financials

Consolidated Statement of Cash Flows
Year Ended December 31, 2020

2020

2019

2020

OPERATING ACTIVITIES:
Income (loss) before income taxes¥20,030¥(2,258)(3,520)(42,029)

22,125

24,955

210,714

1,832

1,986

17,448(2,574)(3,655)(24,514)86
35,162

446

1,156

4,248

Provision for contingent loss

(331)

―

(3,152)

Provision for product warranties

(296)

―

(2,819)

Increase (decrease) in liabilities for retirement benefits

(321)

73

(3,057)

Loss (gain) on sale of property, plant, and equipment, net

(682)

(344)

(6,495)

Loss on impairment of long-lived assets

3,837

16,18136,543

Loss (gain) on sale of investment securities and investments in and advances tounconsolidated subsidiaries and affiliates, net(19,207)(3,343)(182,924)

Loss on write-down of investment securities and investments in and advances tounconsolidated subsidiaries and affiliates

308

11

2,933

Decrease (increase) in receivables

14,483(5,909)137,933

Decrease (increase) in inventories

5,499

5,466

52,371

Increase (decrease) in payables(3,114)(4,060)(29,657)(2,396)

12,066

22,56028,507

214,857

Net cash provided by (used in) operating activities

42,59026,249405,619

Proceeds from sale of property, plant, and equipment

2,265

1,156

21,571

Proceeds from sale of investment securities and investments in and advances tounconsolidated subsidiaries and affiliates

22,304

3,989

212,419

INVESTING ACTIVITIES:(24,601)(25,436)(234,295)

(36)

(79)

(343)

Decrease (increase) in time deposits—net(1,726)(282)(16,438)

Purchase of investments in subsidiaries with changes in consolidation scope(1,329)―(12,657)

―

868

―

(3,198)(1,975)(30,457)(6,321)(21,759)(60,200)¥36,269¥4,490$345,419

Purchase of investment securities and investments in and advances to unconsolidated
subsidiaries and affiliates

Proceeds from acquisition of shares of newly consolidated subsidiaries
Other—net
Net cash provided by (used in) investing activities
FORWARD

Chemicals

Textiles¥144,312¥61,141¥114,827¥51,419¥9,577

398

876

20

421

¥144,710¥62,017¥114,847

Segment profit (loss)¥2,575¥(3,895)

Segment assets

170,435

74,114

Depreciation andamortization

3,736

Increase in property,
plant, and equipment
and intangible assets

Sales to externalcustomers
Intersegment sales ortransfers
Total

Proceeds from long-term debt

36,51932,369347,800

Repayment of long-term debt

(41,468)(10,653)(394,933)

Increase (decrease) in short-term bank loans—net(11,210)(18,277)(106,762)

Cash dividends paid

(4,992)(5,065)(47,543)(4)(4,924)

(38)

(531)

(1,277)(5,057)

Increase (decrease) in other long-term liabilities
Other—net(2,544)(2,238)(24,229)(24,230)(10,065)(230,762)

(608)

(73)

(5,790)NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

11,431(5,648)108,867

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

37,26842,434354,933―

482―¥48,699¥37,268$463,800

Net cash provided by (used in) financing activities
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS

INCREASE IN CASH AND CASH EQUIVALENTS RESULTING FROM INCLUSION OF SUBSIDIARIESIN CONSOLIDATIONCASH AND CASH EQUIVALENTS, END OF YEAR

70

Consolidated¥33,957¥20,279¥21,539¥―¥457,051

181

17

1,399

2,571

(5,883)―¥51,840¥9,758¥33,974¥21,678¥24,110¥(5,883)¥457,051¥(2,289)¥(948)¥1,811¥(813)¥11,512¥248¥(6,953)¥1,248

131,964

70,057

10,43342,56940,98430,422

10,226581,204

4,316

6,744

4,059

214

1,439

914

225

478

22,125

7,167

4,819

7,684

3,870

108

1,070

398

7

747

25,870

Wireless andCommunications

Microdevices

Automobile
BrakesPrecision
Instruments

Chemicals

TextilesReal Estate

Other
Businesses

Eliminations/
Corporate

Consolidated¥152,213¥65,286¥131,338¥65,429¥9,391¥49,505¥11,655¥24,844¥―¥509,661

83

811

12

325

173

17

1,484

2,978

(5,883)―¥152,296¥66,097¥131,350¥65,754¥9,564¥49,522¥13,139¥27,822¥(5,883)¥509,661

Other:

Millions of Yen

Sales:
Sales to externalcustomers
Intersegment sales ortransfers
Total
Segment profit (loss)¥4,100¥256¥(3,340)¥879¥1,650¥1,037¥8,163¥(188)¥(6,075)¥6,482

Segment assets

164,234

76,231

133,654

74,802

9,395

51,33949,01737,904

20,952

617,528

Depreciation andamortization

3,656

3,761

9,799

4,279

222

1,483

1,248

220

287

24,955

Increase in property,
plant, and equipment
and intangible assets

5,237

7,990

13,006

2,928

166

1,109

1,141

100

710

32,387

Wireless andCommunications

Microdevices

Automobile
BrakesPrecision
Instruments

Chemicals

TextilesReal Estate

Other
Businesses

Eliminations/
Corporate

Consolidated$1,374,400$582,295$1,093,591$489,705$91,210$323,400$193,133$205,133$―$4,352,867$3,790$8,343$190$4,010$1,724$162$13,324$24,486$(56,029)―$1,378,190$590,638$1,093,781$493,715$92,934$323,562$206,457$229,619$(56,029)$4,352,867$24,524$(37,095)$(21,800)$(9,029)$17,248$(7,743)$109,638$2,362$(66,219)$11,886

1,623,190

705,848

1,256,800

667,21099,362405,419

390,324

289,733

97,3905,535,276

Depreciation andamortization

35,581

41,10564,22938,657

2,038

13,705

8,704

2,143

4,552

210,714

Increase in property,
plant, and equipment
and intangible assets

68,25745,89573,18136,857

1,029

10,191

3,790

67

7,114

246,381

Other:

2020

FINANCING ACTIVITIES:

Purchase of treasury stockEliminations/
Corporate

Thousands of U.S. Dollars (Note)

Sales:
Sales to externalcustomers
Intersegment sales ortransfers
Total
Segment profit (loss)
Segment assets
Other:

71

Financials

1,267

Total adjustments

Purchase of property, plant, and equipment

Real Estate

Other
Businesses

2019

Changes in operating assets and liabilities:

Other—net

Precision
Instruments

ESG Initiatives

561
1,345

Provision for business structure improvement

Microdevices

Automobile
BrakesBusiness Segments

9
3,692

Interest and dividends income

Millions of Yen
Wireless andCommunications

Management Strategy(4,413)

Depreciation and amortization

Provision for (reversal of) doubtful receivables

2020

Sales:

Income taxes—paid
Amortization of goodwill

Year Ended December 31, 2020

$190,762

Adjustments to reconcile net income to net cash
provided by (used in) operating activities:

Equity in loss (earnings) of unconsolidated subsidiaries and affiliates

Segment Information
ProfileMillions of Yen

Thousands of
U.S. Dollars (Note)Key Companies in the Nisshinbo Group / Corporate Data

Key Companies in the Nisshinbo Group(As of December 31, 2020)

Location

Main Products and Services

FoundedWireless and CommunicationsJapan

JRC Mobility Inc.

Japan

Disaster prevention systems,

Common Stock

Treasury stock

Automotive radars, ultrasound sensors

Employees

Securities firms

mobile communications equipment

Micro Devices

Parent Company

21,473
21,725

Electronic devices, microwave products

Total

Ricoh Electronic Devices Co., Ltd.

Japan

Electronic devices

Head Office

Automobile brake friction materials

TMD Friction Group S.A.

EuropeAutomobile brake friction materials

Saeron Automotive Corporation

South Korea

Automobile brake friction materials

Nisshinbo Automotive Manufacturing Inc.

USA

Automobile brake friction materials

Nisshinbo Somboon Automotive Co., Ltd.

Thailand

Automobile brake friction materials

Nisshinbo Saeron Changshu Automotive Co., Ltd.

China

Automobile brake friction materials

20.8%

Other Japaneseinstitutions

Tokyo 103-8650, JapanJapan

Nanbu Plastics Co., Ltd.

Japan

Molding products

Nisshinbo Precision Instrument & Machinery Hiroshima Corporation

Japan

Automotive precision parts

Nisshinbo-Continental Precision Machining (Yangzhou) Co., Ltd.

China

Automotive precision parts

Nisshinbo Mechatronics (Thailand) Ltd.

ThailandMolding productsContinental Automotive Corporation

Japan

Automotive precision parts

Chemicals
Japan

Urethane products,

high-performance chemical products

Textiles12.9%

Basic Stock Information

Major Shareholders

SectorElectrical equipment

Shareholder name

Stock code

3105

The Master Trust Bank of Japan, Ltd. (Trust Account)

28,217

16.95

Custody Bank of Japan, Ltd. (Trust Account)

12,671

7.61

Teijin Limited

10,528

6.33

Fukoku Mutual Life Insurance Company(Standing proxy: Custody Bank of Japan, Ltd.)

9,000

5.41

Business year

January 1 to December 31

Shareholder record date fordividends

December 31(June 30 for interim dividend)

Shikoku Chemicals Corporation

2,600

1.56

Total shares authorized

371,755,000 shares

Custody Bank of Japan, Ltd. (Securities investment trust account)

2,315

1.39

Total shares issued

178,978,479 shares(As of December 31, 2020)

Japan Wool Textile Co., Ltd.

2,282

1.37

Treasury stock

12,549,457 shares(As of December 31, 2020)

JP MORGAN CHASE BANK 385781 (standing proxy: Settlement &Clearing Services Division, Mizuho Bank, Ltd.)

2,165

1.30

Mitsubishi UFJ Trust and Banking Corporation
1-4-5, Marunouchi, Chiyoda-ku, Tokyo 100-8212,
Japan

DFA INTL SMALL CAP VALUE PORTFOLIO (standing proxy:
Citibank, N.A., Tokyo Branch)

2,139

1.29

Transfer agent

Custody Bank of Japan, Ltd. (Trust account 5)

1,939

1.17

		

Total Shareholders' Return (5-Year Period)（%）

Nisshinbo Holdings Inc.

160.0

Nisshinbo Textile Inc.

Japan

Shirt fabric, developed materials

140.0

NISSHINTOA IWAO INC.

Japan

Textile products

120.0TOKYO SHIRTS CO., LTD.

Japan

ShirtsNisshinbo Do Brasil Industria Textil Ltda.

BrazilTextile spinning

PT. Nikawa Textile Industry

Indonesia

Textile spinning and weaving

PT. Nisshinbo Indonesia

Indonesia

Textile weaving and dyeing

Real Estate(As of December 31, 2020)
Number of shares held Shareholding ratio(thousand shares)
（％）

TOPIX

100.0
80.0
60.0
40.0
20.0
0.0

Japan

15.3

16.3

17.3

18.3

18.12

19.12

20.12

（％）

16.3

17.3

18.3

18.12

19.12

20.12

Nisshinbo Holdings Inc.

106.2

101.7

131.9

82.5

103.6

80.8

TOPIX

89.2

102.3

118.5

104.5

123.4

132.5

Real estate operations

Other
Nisshinbo Singapore Pte. Ltd.

Singapore

Group company support

Nisshinbo Business Management (Shanghai) Co., Ltd.

China

Group company support

Note: Share price index trends including dividends (March 31 2015 = 100)73

Financials

Nisshinbo Mechatronics Inc.

Molding products,
automotive precision parts

Foreign institutions

18.1%

33,478

Number of shares per trading unit 100 shares

Precision Instruments

Nisshinbo Urban Development Co., Ltd.

Japanese individuals
and others

2-31-11, Ningyo-cho, Nihonbashi, Chuo-ku,

Shareholders

38.8%

2.4%

ESG Initiatives

Japan

Japanese financial
institutions

Business Segments

Nisshinbo Brake Inc.

7.0%

252

Subsidiaries

Japan

Automobile Brakes

72

27,669 million (US$263 million)

New Japan Radio Co., Ltd.

Nisshinbo Chemical Inc.

Composition of Shareholders

February 5, 1907

Management Strategy

Japan Radio Co., Ltd.

ProfileCompany

Corporate Data