Integrated Report 2024
Fiscal Year Ended December 2023

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Nisshinbo Holdings Inc.
2-31-11, Ningyo-cho, Nihonbashi,
Chuo-ku, Tokyo 103-8650, JAPANTEL +81-3-5695-8833
www.nisshinbo.co.jp/english/

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Connect Everything,
Create ValueConnect Everything, Create Value ｜ Corporate Philosophy

Connect Everything, Create Value ｜ Message from the President

Nisshinbo Group Corporate
Philosophy and Aims
The Nisshinbo Group mission is“to contribute to society
through business activities,”and we have continued tocontribute to society.

Connect Everything,
Create Value

Masahiro Murakami

President and Representative Director
Nisshinbo Holdings Inc.

Going forward, we will continue contributing to
the resolution of social issues through the provision ofMajor Business Portfolio Changes
in Fiscal 2023
We have been promoting business portfolio transformations

solutions leveraging Group strengths.

Value Creation

reorganize our business around areas where we canAims

Ongoing Major Changes to Our Business Portfolio

in line with the Nisshinbo Group corporate philosophy,
Change and Challenge! For the creation of the future ofEarth and People. This is because of a sense of crisis that,esand be unable to survive as a company. It is important thatischangesneeds of society, we will lose our competitive advantagesu

Demographic

if we do not change our business portfolio to meet thecompanies continuously change.
Fiscal 2023 was a year of major changes to our

population, labor
shortage)

Response to
climate change
issuesSustainabilityCo
re ntriso bu
lut
tio ingntof o tso hecial(falling birthrate, aging

business portfolio, as we carved out the TMD Friction
Group (TMD), which is engaged in the Automobile Brakes
business in Europe, while also completing the acquisitionof Hitachi Kokusai Electric Inc., which has strengths in highspeed, high-capacity communications technologies andDevelopment ofa digital society

video technologies. As a result, our core Wireless andCommunications and Micro Devices businesses accounted
for a combined 44% of sales in fiscal 2023, which is
expected to rise to over 60% in fiscal 2024.

Nisshinbo Group Corporate Philosophy

Change and Challenge!

properly. To strengthen the competitiveness of individual

Overview of Business Segments

Unfortunately, performance in fiscal 2023 resulted inhigher sales and lower profit. We have not yet achieved an
optimal cost structure, and still lack the appetite to profit

For the creation of the future of Earth and People.

businesses, we must accelerate business and productdisposals.

Promoting Business Portfolio Consolidation with the
Disposal of TMD and Acquisition of Hitachi Kokusai Electric

CONTENTS
Value Creation
ー Corporate Philosophy
01 Message from the President
06 Financial and Non-Financial Highlights
Transformations
10	The Nisshinbo Group’s Value-Creation
Process
12 Medium-Term Management Plan 2026
24 CFO Message
26	Medium- to Long-Term Initiatives in the
Wireless and Communications Business

Sustainability
28 Materiality, Risks and Opportunities
30	Environmentally Conscious Business
Developments

Recommendations
37	Human Rights and Human Capital, Safety
and Quality

60 Micro Devices
62 Automobile Brakes
63 Precision Instruments
64 Chemicals

41 Supply Chain Management

65 Textiles

42 Outside Director Message

66 Real Estate

44	Dialogues with Shareholders and Investors46	Board of Directors, Audit & Supervisory
Board Members and Managing Officers
49 Corporate Governance
54 Compliance
55 Risk Management

Overview of Business Segments
56 Performance by Business
58 Strategies by Business
58 Wireless and Communications

Data Section
67 Five-Year Non-Financial Summary
68 Eleven-Year Financial Summary
70 Financial Statements
74	Key Companies in the Nisshinbo Group
75 Major External Assessments
76 Corporate Data
77	Integrated Report 2024 Publication andSales Composition(Billions of yen)
600

500

Others

400

300

200

100

0

44％

TMD

Automobile
BrakesAutomobile
BrakesMicro
Devices

Micro
Devices

Hitachi Kokusai
Electric

Data Section

08	History of Business Portfolio

33	Reports Based on the TCFD

62％

Wireless andCommunications

2023 Results

2024 Forecast

Corporate Website Guidance1Connect Everything, Create Value ｜ Message from the President

Carveout and M&A Decision-Making

in the Wireless and Communications and Micro Devices

Additionally, through the use of technologies and products

businesses, we plan to expand our business domain by

In 2023, I noted that M&A and carveouts are always in thethe Wireless and Communications’ solutions businesssuch as radar, GPS, and ultrasound sensors the Group hasleveraging the technologies and products we have masteredworks. Both the TMD carveout and the Hitachi Kokusai Electricand accelerate our growth strategy. Japan Radio Co., Ltd.,mastered in manufacturing, we intend to develop service

in manufacturing and expanding into the data services

Inc. M&A required four years to complete.

At the same time, the acquisition of Hitachi Kokusai

develops a wide range of Wireless and Communications

businesses, expand our business domain, and increasebusiness. The key to data business lies in transforming

The Group acquired TMD in 2011 with the aim ofbusiness, from social infrastructure including disasterprofitability through data business growth.

data collected by products into a business. For example,

gaining a leading share in the global brake market. Originally,

prevention and supervisory control systems, to mobile

ship navigation data collected by the Marine Business

Nisshinbo Brake Inc. had strengths in the Japanese, U.S., South

communications equipment for vessels and automobiles,

J-Marine Cloud is an indispensable material for realizing

Korean, and Chinese markets, and by bringing TMD into thebut the bedrock of its earnings base as a business isGroup, a leading European manufacturer that had been the

public-sector demand solutions. Hitachi Kokusai Electric

missing piece, we have been able to secure market superiority.

Inc. develops solutions businesses mainly for government

However, rapid changes have subsequently occurred in the

Value Creationsuch as brake friction materials and fuel cell separators.

Electric Inc., is intended to solidify the earnings base of

Medium-Term Management Plan Positioning:
Three Years of Foundation Building

automated navigation, and shifting our focus from sea toagencies leveraging advanced video and communications

The Group’s goal is to Connect Everything, Create Value.

with DX based on manufacturing, we invest in startups andmarket environment: the accelerating shift toward xEVs in

technologies, and the two companies complement

To this end, we will provide solutions to social challenges

accumulate knowledge within the Group through personal

the automotive industry, and brake particulate emissions

each other in terms of technology and sales. There is athrough sensing, wireless communications, and informationexchanges and human resource development.

regulations in Europe. There are increasing concerns about

particularly strong affinity between high-speed, high-capacity

processing technologies.

the shrinking market for repair parts, which is TMD's earnings

communications technologies and video technologies, andbase, and large R&D investments have become necessary to

by making Hitachi Kokusai Electric a Group company, we

a time for laying the foundation necessary for realizing thispremise of respect for and protection of human rights forcomply with regulations. We have assessed these future risks

expect to expand market and technological domains mainly

aim. Accordingly, we have set three priority measures: Pursue

all people associated with our company, we will develop

facing TMD and have been preparing for the business transfer

in the industrial solutions field.

a transformation of the business portfolio; build a businessbusiness with consideration for environmental impacts,

model that looks to future growth and invest management

promote the acquisition, development, and advancement of

resources in a focused manner; and reduce management risk

a diverse array of human resources, establish responsible

by further strengthening the management base.

supply chains, and improve corporate governance efficiency.

Japan Radio and Hitachi Kokusai Electric Solutions Business
Strengthening Total Solutions
Collect

Send

Process

Value Provided

Finally, to reduce management risk by further

The three-year period beginning in 2024 is positioned as

Promoting sustainability management that protects andbusiness portfolio and proactively invest in growth, including

improves the global environment is consistent with our

M&A, with a focus on the Wireless and Communications

Group philosophy and contributes to achieving the SDGs.

and Micro Devices businesses. At the same time, we will

Hitachi Kokusai Electricarea of expertise

Hitachi Kokusai Electricarea of expertise

Cloud, Server and PC

we also evaluate businesses comprehensively, including

Monitoring, control,
display and distribution

consistency with our corporate philosophy, market growtharea of expertise
Data collection and analysis,
simulations, AI image analysis

Hitachi Kokusai Electricarea of expertise

Total solutions to enhance the solutions business earnings foundation

Big data created and data provided
in line with customer needs
Both companies aiming to
make the business an
indispensable platform forthe industry

Hitachi Kokusai Electric

Growthstrategy

shareholders and a variety of other stakeholders.

After the major TMD and Hitachi Kokusai Electric Inc.

providing solutions to these global environmental problems

projects concluded and we had achieved significant

is a business that is consistent with our corporate

progress in transforming our business portfolio, in February

philosophy. First, we can save lives by providing disaster2024 we announced Medium-Term Management Plan

prevention wireless and sensor networks to address the2026. We held discussions from the draft stage withissues we face, such as frequent disasters caused byoutside directors before formulating and announcing theclimate change. We also provide solutions to environmental

medium-term management plan, taking the time to engage

issues with private LTE, local 5G, and other communications

in multifaceted discussions from the perspectives of2

potential, competitiveness of the business in the market,

Under Medium-Term Management Plan 2026, in fiscal

profitability, and capital efficiency, to determine whether

2026, the final year of the plan, we are targeting net sales

the business should be considered a growth business or if itof ¥580.0 billion, operating income of ¥38.0 billion, an

should be downsized or transferred.

operating margin of 6.5%, ROIC of 6%, and ROE of 10%.

Next, with regard to building a business model that

These targets are reasonable, as they were formulated withlooks to future growth and investing management resourcesa slight stretch for organic growth in each business with anin a focused manner, in addition to proactive investment

eye toward our goal around 2035.

Excerpt from Medium-Term Management Plan 2026
Fiscal 2023

The most urgent issues facing human society areenvironmental destruction and global warming. Thus,

systems, micro devices, and environmental materials

Real Estate, Others
TextilesChemicals %2%

7Precision
Instruments

10%

Materials

29%¥541.2billion15%

33%

TextilesWireless andCommunications

4%

Automobile
BrakesGoal around 2035

Fiscal 2026
Real Estate, Others
Chemicals

3%7%Precision
Instruments

Materials

11%

Automobile
BrakesMicro Devices

11%

3%

Data Section

Medium-Term Management Plan 2026
Announcement

Forecast for Fiscal 2024,
First Year of the Plan

Overview of Business Segments

We calculate the WACC and ROIC for each business, andVarious communications
systems including
satellite communications,terrestrial
communications, and 5G

strengthening the management base, starting with the basic

We will continue to pursue the transformation of ouralso step up our efforts to identify unprofitable businesses.
Various sensing devices
including highly sensitive
camerastraffic control and weather radar. To develop data business

Sustainability

since 2019.

sky, we also envision business development utilizing air

Wireless andCommunications¥580.0billion・Japan Radio Group

46%-Marine Systems-Solutions andSpecialized Equipment-Mobility, etc.

・Hitachi Kokusai

19%Electric Group

Wireless and Communications/Micro Devices
80% or more

Micro Devices
Operating margin

2.3%

6.5%

10% or more

ROE

-7.8%

10%

More than 10%3Connect Everything, Create Value ｜ Message from the President

In fiscal 2024, the first year of the medium-term
management plan, under the slogan“generating profitsthat is in the process of reorganization, while maintaining a
policy of reducing cross-shareholdings.
If increased share price becomes the objective, it¥513.0 billion, operating income of ¥24.0 billion, ordinary

can lead to restrained investment in growth and wages,

income of ¥26.0 billion, and net income attributable toexcessive shareholder returns, and financial leverage,

owners of the company of ¥19.0 billion. By business

which can damage financial stability and, in the long run,segment, in the Wireless and Communications business, we

corporate value. The key is balance, as well as management

expect significant increases in sales and profit, mainly duethat enhances corporate value. In turn, this will result in ato the expected strong performance of the solutions andhigher share price. To this end, we will invest in growth withspecialized equipment businesses against the backdrop

a steady focus on the future, while generating returns byof stable public works budgets, as well as the addition of

ensuring employees engage in satisfying work and returning

Hitachi Kokusai Electric Inc., to the Group. In the Micro

profits to our shareholders. Going forward, we will continue

Devices business, in addition to the expectation thatto firmly implement this approach.

demand for automotive parts will remain solid, the plan

Value Creation

through sincere business activities,”we forecast net sales ofRegarding shareholder returns, after making sufficient
strategic growth investments, we will first maintain stable

other consumer products, which declined significantly in

dividends while aiming to achieve a dividend payout ratio

fiscal 2023, will enter a recovery trend in the second halfof 40%. Further, our policy is to flexibly conduct share

It has been 20 years since the Group decided toTrust and satisfaction can be gained through fairness andof fiscal 2024, although market recovery conditions remainbuybacks, taking into consideration capital structure andtarget growth through the provision of solutions to global

sincerity, which take years to win, but can be lost in an

highly unpredictable. In the Automobile Brakes business,the medium- to long-term outlook for free cash flow. To

environmental issues, and yet, rather than nothing having

instant. I feel our company has a very serious culture,orders for copper-reduced and copper-free friction materials

increase the dividend payout ratio from the current 30%

changed, environmental problems continue to worsen. The

and by continuing to work hard to achieve our goals within response to environmental regulations remain firm, but

to 40%, we will work to improve profitability, includingGroup is committed to reducing greenhouse gas emissions

sincerity and self-discipline, thereby maintaining our asset ofcompared to fiscal 2023, sales and profits are expected

reorganizing our business portfolio.

in its business activities with the goal of achieving carbon

trust, I want to infuse our culture with a sense of speed.

to decline overall, partly due to the impact of the TMD

neutrality by 2050, with a 50％ or more reduction in CO2 bybusiness transfer. In the Precision Instruments, Chemicals,

2030 compared to fiscal 2014 levels.

and Textiles businesses, we expect higher sales and profit
driven by market growth and increased orders, while sales

Corporate value is also not discounted if the company
can take full advantage of its strengths as a diversified
collection of businesses. The holding company will act as

to a meritocracy that eliminates seniority, and we area producer, solidly fulfilling its cross-functional role andencouraging the promotion of younger employees and theselecting themes that can demonstrate the superiority ofbusiness in line with the planned subdivision of asset

In terms of the management foundation supporting theseuse of outside human resources. We have also revised oureach Group company with cutting-edge core technologies

holdings.

business activities, we will continue to strengthen andhuman resources system to incorporate multi-track andwhile creating synergies. To this end, we will secure thepromote sustainability management. In August 2023, wetransferable functions by introducing a role-based gradingnecessary human resources and invest capital in theformulated the Nisshinbo Group Human Rights Policy

system. As companies should provide employees with

development of businesses, then return these businesses

to further strengthen our sustainability management

opportunities to play active roles, our long-established self-

to Group companies for commercialization in an ongoingfoundation. For the Nisshinbo Group, human rights are an

assessment and internal recruiting systems are widely used

cycle. In the process of expanding our business domain

extremely broad concept, encompassing the right of people

for this purpose. With safety as the basis of all our businessfrom manufacturing to data business, we must also boldly

to lead fulfilling lives based on their own various choices.

activities, we will continue aiming for zero occupationaltake on the challenge of speed. Failure is an inevitable part

injuries through the promotion of safety and healthof any challenge, but a culture that allows for failure andactivities and continuous improvement efforts.

makes the most of it as a team will lead to innovation.

PBR Improvement Measures andShareholder Returns
We aim to establish an earnings base centered on theElectronics business, but looking at fiscal 2023 results, we

In conducting human rights due diligence, which we will

still face challenges in terms of profitability and establishing

begin in earnest in 2024, management must consider humana stable profit base. As PBR remains below 1x, we recognize

rights risks affecting people, rather than management risks

We will continue to enhance corporate value by taking

that the current situation does not meet shareholder

affecting the company. In the event human rights violations

on a variety of challenges, including business selection and

expectations, and deeply regret that we have not sufficiently

are discovered, we must first respond to situations with theearned the trust of our investors.

highest degree of negative impact on human rights based

Message to Stakeholders

on how seriously individuals are affected, irrespective of theOver the past 10 years, the Group's business portfolio has

management risk of how severely the company is impacted.

undergone significant transformation, and we have also

ROE. By earning profits properly and enhancing corporate

Human rights due diligence involves recognizing many

promoted business diversification. Additionally, we promoted

value, we will meet shareholder expectations, which will

issues, including employee health and safety, discrimination

the empowerment of core companies, and have also maderesult in higher share prices. To turn this cycle around, weand harassment, and environmental issues arising fromprogress in achieving flexible business operations and fasterwill improve the profitability of existing businesses andbusiness activities. It also covers a wide range of areas,

decision-making, which were objectives targeted when we

promote business portfolio transformations, including M&A

including supply chains, suppliers, investments, and joint

transitioned to a holding company structure in 2009.

and carveouts. Additionally, to improve asset efficiency, we

venture partners. We must also make efforts over the long

will further promote the planned subdivision of real estateterm to ensure business continuity.

4

divestment and business portfolio transformation, whileremaining attentive to stakeholder concerns.
Data Section

As PBR is the product of ROE and PER, to improve PBR,
the first priority is to increase the profit margin and improve

Overview of Business Segments

and profit are also forecast to increase in the Real Estate

Sustainability Management Premised on
Respect for Human Rights

With regard to human resources, we have shifted

Sustainability

assumes that the market for smartphones, PC-related, andAmid these changes, one asset we continue to maintainis the trust of our customers and other stakeholders.

5Connect Everything, Create Value ｜ Financial and Non-Financial Highlights

Financial and Non-Financial Highlights■ Net Sales■ Operating Income and Operating Margin(Millions of yen)

(Millions of yen)

600,000

510,643 516,085

509,660

6

25,000541,211457,051

20,0004.3
15,43515,00012,453300,000

3.0

10,000200,000

2.3

6,482
5,000

100,000

2019

2020

2021

2022

0

2023

1.3
2019

1,248
0.3
2020

2021

2022

2023

5

500

4

400

（%）

149.08

40

81.38

90
60

38.6

39.4

42.8

564.1

567.4

250,000

438.0
368.5

200

100,000

1

100

50,000

0

0

2021

2022

2023

研究開発費
■ R&D Expenses

30,00042.8
37.3

25,00022,40023,37723,71925,86427,301

5.8

10

52

55

10.2

7.6

40

20

2019

2020

2021

2022

2019

2020

2021

2022

-10

2023

Interest-Bearing
Debt

2019

Debt/Equity Ratio

（％）

(Yen)

1.2

40

Cash Dividends
per Share

0.50

0.7

100,000

146,918

0.9

36.9
30.00

30.00

30.00

36.00

28.1

（%）

40

20

2019

2021

2022

2023

Percentage of Womenin Management
Position

Percentage ofFemale Director

16.7

20

20

20.1

18.2

2021

2022

2023

2020

2021

2022

2023

■ Percentage of Outside Directors
50

40

15

10

9.1

9.1
5.3

0.4
10

2020

2019

（%）

10

5

0

0

8.5

7.4

5.6

45.5
36.4

36.4

2019

2020

41.7

41.7

0

0

2019

2020

2021

2022

2023

2021

2022

20

10

0.2

2019

0.1

30

0.6

50,000

2020

16.7
30

0.16

0.2

■P
 ercentage of Women in Management
Position and Percentage of Female Director
（％）

0.25

0.8
0.6

0.5

0.42

Data Section

0.7

30

131,851

Consolidated Dividend
Payout Ratio

34.00

1.0

150,853

02023■ Cash Dividends per Share/

200,000

150,000

2022

1 株当たり配当金／連結配当性向
Consolidated Dividend Payout Ratio

216,984
164,796

2021

0

0.65

0.3

5,000

-7.8
2020

2023

0.8

0.6

10,000-2.7-127.61

53

0.4

0

■ Interest-Bearing Debt and6

51

Overview of Business Segments-39.45

有利子負債、D/E
レシオ
Debt/Equity
Ratio

0

50

15,00020-120

250,000

80

0.5

-90

(Millions of yen)0

0.7

20,000-30

100(Millions of yen)

30

0

-150

233,096（％）■ Frequency of Injuries with Lost Workdays

30

-60

283,847 286,842

60

2

2020

254,830

265,534

Percentage ofTotal Sales

200,000
150,000

2019

Sales of Products that Contributeto a Sustainable Society

300,000

300

ROE

Shareholders Equity Ratio

50

121.06

120

592.4(Millions of yen)3

自己資本比率、ROE■ Shareholders’ Equity Ratio and ROE

150

600

Society, Percentage of Total Sales

Sustainability

EPS
■ EPS
(Yen)

（Thousand t-CO2e）

21,788400,000

0（％）

持続可能な社会に貢献する製品売上高、総売上高に占める比率■S ales of Products that Contribute to a Sustainable

Value Creation

500,000

Operating Margin

Operating Income■ GHG Emissions（Scope 1 + Scope 2）

2019

2020

2021

2022

2023

0

2023

7

Connect Everything, Create Value ｜ History of Business Portfolio Transformations

Nisshinbo Group Net Sales (Billions of yen)

The Nisshinbo Group has responded to the needs of society and contributed to resolving social issues bytransforming its business portfolio.
The enhancement of technological capabilities in the mainstay Wireless and Communications and Micro
Devices businesses constitute the genealogy of our current main product lines.
portfolio transformations, which is one of the priority measures under Medium-Term Management Plan 2026.

Real Estate and Others*1 Paper Products was included in Materials business*2 Nine months of results due to change in ﬁscal year-end

600
500

Value Creation

Recognizing that maintaining the status quo is a form of regression, we will continue to pursue businessWireless and Communications and Micro Devices
Materials business (Automobile Brakes, Precision Instruments, Chemicals and Textiles)

400
300
200
100
0

History of Business Portfolio Transformations
1960s–1980s

Automobile Brakes business expanded
amid increasing motorization

 ippon Radio Telegraph1915 N

2000s

Focused efforts on the electronics field
in preparation for the arrival of theinformation society

Ueda Japan Radio Co., Ltd., founded

1959 N ew Japan Radio Co., Ltd., founded1948

1983 Achieved top global share in maritime satellite

2019.122020.12Core Wireless and Communications/
Micro Devices Businesses▶ Radio equipment

 eveloped world’s first narrow radar bandwidth 9GHz band2010 D
300W solid-state radar for vessels▶ Marine radar

1971 Launched sales of Japan’s first real-time signal analyzer▶ Weather radar

1984▶ GPS receivers

Developed Japan’s first GPS receiver for vessels

2005 Became a consolidated subsidiary of Nisshin
Cotton Spinning Co., Ltd. (now Nisshinbo Holdings Inc.)

1961 Transferred the Microwave Tube Manufacturing
Department from Japan Radio Co., Ltd.

Ricoh Electronic Devices Co., Ltd.
19752018 Became a consolidated
subsidiary of Nisshinbo Holdings Inc.

1981 Completed construction of Electronic Technology

Development Center at the Ricoh Osaka plant

Developed lithium-ion

1999▶ Power control devices

Developed mobile phone system LSI▶ Signal processing devices

Nisshin Cotton Spinning Co., Ltd., founded
Production of friction materials started
Nisshin Cotton Spinning Co., Ltd., commenced operations at the Nishi Arai Plant as a chemicals production facility
Established Nihon Kohbunshikan Co., Ltd., and commenced production of plastic bobbins

Developed ICs for automotive applications▶ Signal processing devices

Data Section

Materials business (Automobile Brakes, Precision Instruments, Chemicals,

1958

D-CLUE Technologies Co., Ltd.,
became a wholly owned subsidiary

battery protection ICs

2009

1946

2022

▶ Power control devices

Developed power control system ICs

1995

Nisshinbo Micro Devices Inc.
founded▶ Signal processing devices

Commenced production of operational amplifiers

1987

8

2023.122022

New Japan Radio Co., Ltd.

1944

2022.122010s–

Micro Devices

19072021.12

Overview of Business Segments

Completed Japan’s first weather radar

2018.12*2

vessel communications equipment

Completed Japan’s first ultrasonic depth finder

1954

2018.32010 J apan Radio Co., Ltd., and Nagano Japan Radio Co., Ltd., became
consolidated subsidiaries
2013 Alphatron Marine Beheer B.V., became a wholly owned subsidiary2018 ProNav AS became a wholly owned subsidiary2019 NJ Components Co., Ltd., became a wholly owned subsidiary2020 RBI and LEAS became wholly owned subsidiaries
2023 Hitachi Kokusai Electric Inc., became a wholly owned subsidiaryJapan Radio Co., Ltd.

Completed Japan’s first wireless weather broadcasting equipment

2017.3*1

2016.3*1

1949 Nagano Japan Radio Co., Ltd., andManufacturing Co.
founded (now Japan
Radio Co., Ltd.)

1922

Further business diversificationand overseas expansion buoyedby the strengthening yen

2015.3*1

Sustainability

Wireless and Communications

1990s

2014.3*1

Textiles) and Real Estate business▶ Textiles▶ Automobile Brakes▶ Chemicals▶ Precision Instruments
9Connect Everything, Create Value ｜ The Nisshinbo Group’s Value-Creation Process

Aim s

The Nisshinbo Group’s Value-Creation Process

Connect Everything,
Create Value

Based on an awareness of the external environment and social issues, the Group seeks to maximize
outcomes by effectively utilizing its six forms of capital and implementing a business model based onsustainability management. Through these processes, we aim to contribute to the resolution of social issues
as a“Connect Everything, Create Value”corporate Group.

External environment / social challenges● Intensifying disasters and other climatechange issues

through sensing, wireless communication, andaging population, labor shortage)

Input● Need for accident-free, safe transportation● DE&I inculcation● Pandemics, wars

E
M
O

Business models
Manufacturing capital

38
Overseas sites 57

Net assets

Domestic sites¥276.5 billion
Interest-bearing debt

Capital investment¥216.9 billion¥31.2 billion

As of December 31, 2023

Intellectual capital

Human capital

R&D expenses

Number of consolidated
employees

Social capitalFrequency of injuries withlost workdays (Japan)

Dialogues with investors
Total number ofindividual meetings withinstitutional investors

0.42

Natural capital

About

Amount of energy consumed

8.62 million GJ

120 times● Ongoing portfolio reforms

communications technological capabilities

Medium-term management plan
● Pursue a transformation of the business portfolio● Build a business model that looks to future growth and6,240 thousand m● Reduce management risk by further strengthening themanagement base

Cultivating

Ascertaining

humansocial issues

resourcesand needs

IT, AI,and DX

Financial results
Operating income¥12.4 billion

OutputProducts and solutions

Appropriate
allocation ofmanagement
resources,
alliances, andM&A

Materiality

Micro Devices

Material
Business

Automobile Brakes
Precision
Instruments
Chemicals
TextilesReal EstateBusiness

GHG emissions(Scope 1 + Scope 2)

Volume of waste
generated● Contribution to the environmental

and energy field● Creation of a safe and secure society● Global compliance

Sustainability management

ROE

Total dividends

7.8% ¥5.656 billion−

Disaster prevention
solutions

Communications
infrastructuredevelopment

Shipping safety andadvances

Autonomous driving
advances

Analogsemiconductor
solutions

Automotive parts
contributing to
improved safety

Telemedicine andnursing care support
Successful joint
development throughopen innovation

Business models

安全性向上に資するthat utilize digitaltechnologies
自動車用部品Data Section

INP

OutcomeWireless andCommunications

Promotion of

UT

OU

invest management resources in a focused manner

Water usage

3

T
U
TP

● Sensing, information processing, and wireless

Overview of Business Segments¥27.3

19,416 people

billionTC
U
O

Strengths

Sustainability

Financial capital

10

information processing technologies.

● Movements toward a decarbonized society● Development of a digital society● Demographic changes (falling birthrate,

Value Creation

We provide solutions to social challenges

Greenhouse gas
emissions reductions

368 thousand t -CO e 52.4 thousand t2

11Connect Everything, Create Value ｜ Medium-Term Management Plan 2026

Medium-Term Management Plan 2026
In fiscal 2023, the Nisshinbo Group sold the TMD Group and acquired Hitachi Kokusai Electric Inc. In fiscal 2024, this is
expected to result in combined net sales from the mainstay Wireless and Communications and Micro Devices businesses
exceeding 60% of total consolidated net sales.
In line with the timing of these additional major changes to the Nisshinbo Group business portfolio, we announced MediumTerm Management Plan 2026, which ends in fiscal 2026, on the same day as our fiscal 2023 earnings announcement.

Net sales

600
500

Consolidated
net sales,
operatingmargin

400

509.7
416.2

457.0

Operating margin

510.6

516.1

541.2

15

200

0

4.3%
-0.6%

2019

2.3%

2022

2023

0.3%
2020

2021

5

0

-2.8

-2.7

5.8

10.2

7.6

-7.8 %

PBR

0.57

0.73

0.55

0.56

0.58

0.72

✓Our steady efforts to2022: [Micro Devices]
DCT (Acquisition)
2023: [Wireless andCommunications]
Hitachi Kokusai Electric(Acquisition)
2023: [Automobile Brakes]
TMD (business transfer)✓We have been working to reorganize our business portfolio, centered on the Wireless andCommunications/Micro Devices businesses, with the aim of establishing a revenue base centered on
manufacturing.
✓However, profitability and profit stability have remained an issue due to a temporary downturn inpublic-tender projects in the Wireless and Communications business, as well as the Micro Devices
business being affected by a delay in the recovery of the consumer products market.
✓The Company’s PBR has been below 1 time, below stock market expectations.

Medium-Term Management Plan Positioning and Priority Measures
2024

2026

2024–2026
Lay the foundations toachieve what we areaiming for

2027

2030

date to restructure
the businessportfolio have laid
the groundwork forthe next phase of
growth.

✓From this base,we will work to
improve profitability
by shifting to abusiness model thatleverages digitaltechnology, centeredon the Wireless andCommunications
business.

Net sales￥541.2 billion¥580.0 billion

Percentage of net sales from the
Wireless and Communications andMicro Devices businesses

44%

65%

Operating income￥12.4 billion¥38.0 billion

46%

70%

Operating margin

2.3%

6.5%

ROE

-7.8%

10%

ROIC

2.0%

6%

Soundness

D/E ratio

0.86 times

0.7 times or lessShareholder
returns

Dividend payout ratio

ー40%Percentage of operating income from
Profitability the Wireless and Communications andMicro Devices businesses

Efficiency■ Non-financial (Fifth Sustainability Promotion Plan (FY2022-2024))

HumanrightsEnvironment

What We Are
Aiming for around 2035

2035

From 2027
Transform the business model andachieve high profitability✓Proactively invest in the Wireless and Communications/Micro Devices businesses andbuild a business model that leverages digital technologies

Reduce management risk by further
strengthening the managementbase✓Respect human rights✓Develop business with a consideration for environmental impact✓Attract, develop, and promote diverse human resources✓Build a responsible supply chain✓Enhance the effectiveness of corporate governanceFiscal 2024 targets

Promote business and humanrights initiatives

Formulated human rights policies andintroduced human rights due diligence inareas of high human rights risk

Formulate human rights policies, introduce
and promote human rights due diligence inareas of high human rights risk

Reduce of greenhouse gas
emissions

Reduced 46% compared to fiscal 2014

Reduction of 35% or more compared tofiscal 2014

Expand sales of products that
contribute to a sustainable
society

53% of total sales

Accounting for 60% or more of sales

Implemented various measures aimed atrecruiting and promoting the success oftalented mid-career hires

Strengthen career recruitment to correct
personnel age structureContinued to conduct global survey

Continue to conduct global survey

Percentage of female managers: 7.4%*

Percentage of female managers: 6%

Percentage of male employees taking
childcare leave: 100% of eligible male
employees*

Percentage of male employees taking
childcare leave:30% or more of eligible male
employees

Implement improvements insustainable procurement incooperation with suppliers

Implemented in line with plans

100% evaluation in the improvement
status of major suppliers (80% or more oftransaction value) based on the results of thesustainable procurement survey

Global response measures

Studied supply chain deployment methods
for overseas suppliers and key overseas
locations

Study and implement supply chain
deployment methods for overseas suppliers
and key overseas locations

Human
capitalPromote diverse human resources

Supplychain*Items for which Nisshinbo Holdings has set KPIs
12

13

Data Section

Priority Measures

2

Build a business model that looks tofuture growth and invest management
resources in a focused mannerFiscal 2023 results

Strengthen career recruitment tocorrect personnel age structure✓Accelerate growth, leveraging the Wireless and Communications/Micro Devices businesses✓Promote investment in growth and look closely at our businesses✓Achieve a valuation that reflects our corporate philosophy, growth potential, profitability,
and return on capital

1

Category

Training of management
Increase the ratio of successor program
Implemented various programs for successor
candidates necessary for businessparticipants in management posts (executive
candidates
promotion
officers and above)

Connect
Everything,
Create Value

Pursue a transformation of
the business portfolio

3

Fiscal 2026 targets

Overview of Business Segments

2018: [Micro Devices] Ricoh Electronic Devices Co., Ltd. (Acquisition)
2018: [Wireless and Communications] ProNav (Acquisition)
2019: [Wireless and Communications]
Changes in
NJ Components (Acquisition)
the business
2020: [Wireless and Communications]portfolio
RBI, LEAS (Acquisitions)
2018: [Automobile Brakes]
Foundation brakes business (Business transfer)

Fiscal 2023 results

Sustainability

2018

1.3%

3.0%

ROE

Summary to
date

Improve
profitability bytransforming thebusiness model

10

300

100

Direction after
the Medium-Term
Management Plan
2026

20

Metrics

Growth■ Nisshinbo Group's Net Sales, Operating Margin, ROE, and PBR(Billions of yen)

■ Financial

Value Creation

Challenges for Medium- to Long-Term Growth and Future Directions

Management Targets

Connect Everything, Create Value ｜ Medium-Term Management Plan 2026
Our Target Portfolio■ Nisshinbo Group’s Net Sales, Operating Margin, and ROE

2010〜2023

Medium-Term

Fiscal 2009

Chemicals

21%

13%

¥242.4

Electronics

Precision
Instruments

10%

17% Automobile

Materials

Chemicals

10%3%Precision
Instruments

Materials

15%

33%

11%

7% 3%

¥580.0billionAutomobile
BrakesMicro Devices

Precision
Instruments

Percentage of net sales
from the Wireless and 21%
Communications/Micro
Devices businesses:

Around 2035

Textiles29%billionWireless andCommunications

・Japan Radio Group-Marine Systems

46%-Solutions andSpecialized
Equipment-Mobility, Others

11%

・Hitachi Kokusai
Electric Group19%

Wireless and Communications/Micro Devices businesses:
80% or more

Micro Devices

65%

80% or more

46%

70%

80％ or more

2.3%

6.5%

10% or more

ROIC

2%

6%

More than 8%

WACC

5.7%

ROE

-7.8%

10%

More than 10%

Percentage of operating income fromthe Wireless and Communications/
Micro Devices businesses

Directions for the Transformation of Our Business Portfolio
We will optimize the allocation of management resources by identifying businesses that align with our corporate philosophy
and demonstrate growth potential, business profitability, and return on capital, in order to promote the transformation of ourbusiness portfolio to achieve our "aims for around 2035."✓Expansion of the Wireless and Communications/Micro Devices businesses✓Restructuring of problem businesses, focusing on profitability

Directions for transforming our business portfolio under the current medium-term management plan
Optimize the allocation of management resourcesto actively invest in focus areas and identify
businesses in non-core areas

Focus on businesses that are consistent with

the Nisshinbo Group's corporate philosophy anddemonstrate growth potential, business profitability,
return on capital, and industry competitiveness.
Conduct a valuation based on businesscharacteristics and risks by setting WACC/hurdle
rates for each business● Wireless and Communications/Micro Devices business・Establish positioning as a focus area and accelerate growth・Build a business model that leverages digital technology● Materials business (Automobile Brakes, Precision Instruments,
Chemicals, Textiles)・Grow by focusing on high-profit areas that contribute to
the environment and have synergies with the Wireless andCommunications/Micro Devices businesses
・Identify areas for growth and areas for downsizing orwithdrawal● Real Estate business・Continue to subdivide asset holdings

15

Data Section

Reconfigurations of our business portfolio to date

Overview of Business Segments

44%

Operating margin

14

What We Are
Aiming For

Real Estate, Others

Chemicals¥541.2

Automobile
BrakesBrakes6%

7%

4%Transform the business model andachieve high proﬁtability

Sustainability

Textiles24%billion2%

TextilesFrom 2027

Fiscal 2026
Wireless andCommunications

Real Estate, Others

Real Estate, Others

9%foundations toare aiming for

Fiscal 2023

(The year we transitioned toa holding company structure)

PapersManagement Plan 2026

Value Creation

Lay theachieve what we

Establish a manufacturing-focused earnings baseaConnect Everything, Create Value ｜ Medium-Term Management Plan 2026
Strategies by Business

Strategies by BusinessWireless and Communications BusinessWireless and Communications Business

Target Directions

Target Directions

Quantitative Targets

We intend to build a profitable portfolio centered on theprovision of social infrastructure systems and after-sales services.

Net salesRadio Group and Hitachi Kokusai Electric Group* (image

250

recognition technology, 5G wireless communication technology, etc.)

200●B oost business profitability through continuous portfolio

reviews

150
100● Improve cash flow generation capability and profitability

through cost structure reforms and inventory reduction●J RC Mobility will prepare for the next stage by preparing

for connected, sensing systems, mobility infrastructure, andother growth areas.

systems and expanding revenues from after-sales services

246

231
158

267
6.7%

5.3%

2

50
0

FY2023
results

FY2024targets

6
4

3.5%

3.0%

8

FY2025targets

FY2026targets

0

Sales composition (fiscal 2026, billions of yen)

● Expand market share in the new shipbuilding market

Net sales

Operating margin(Billions of yen)

Improve solutions to customer issues such as environmental
impact reduction, cost reduction, and crew shortages● Promote ongoing relationships with customers

50
40

20

provide preventive after-sales services and other services

10

the rollout of digital businesses

0Development of automatic operation systems, realization of

42

6.4%

30

Strengthen data-driven analytical capabilities in order to● Accelerate the development of digital technology to expand

43.9

48

45
5.9%

6.2%

8
6

4

3.8%

Value Creation

300

Quantitative Targets

Establish a stable revenue base by providing automated navigation

Operating margin(Billions of yen)

● Create synergies by leveraging the strengths of the Japan

Japan Radio Group: Marine Systems

2

FY2023
results

FY2024targets

FY2025targets

FY2026targets0manned autonomous operation and deployment of data services*Became consolidated subsidiaries in December 2023

■ Business structure●T his business comprises the Japan Radio Group and the

Hitachi Kokusai Electric Group.
●T he core of the Japan Radio Group is Marine Systems,

Solutions and Specialized Equipment, and includes JRC
Mobility and others (JRC Mobility, ICT mechatronics,
medical equipment, and others)●T he Hitachi Kokusai Electric Group* consists of the solutions,DX, infrastructure (social infrastructure), and railways.
■ Business characteristics● Focusing on marine systems, solutions, and specialized

equipment, the business has the following characteristics.
✓Many businesses have high continuity and stability,
such as the provision of social infrastructure systems

Solutions and
JRC Mobility
Specialized
Others21
Equipment(including（8%）
79
elimination)
ICT,
（30%）
6
Mechatronics（2%）
31
Medical Equipment
10
（4%）

（11%）

Business Overview and Strategy■ Business characteristics● Design, manufacture, sales, and maintenance of navigation equipment and systems for large merchant vessels● Once deployed on a new ship, navigation equipment and systems are used continuously for about 20 years until

the ship is scrapped, generating regular after-sales service.
■ External environment● Demand for new shipbuilding is expected to continue to grow due to the

expansion of commercial trade volume and the trend toward zero-emission ships.
■ Main customers● Shipbuilding, shipping, maritime-related companies, etc.

■ Strengths● Global service network with 80 in-house service agents● High share (around 27%) of the market for navigation equipment and systems for large merchant vessels● Cooperation with other companies, including collaborative platforms■ Value provided● Resolution of customer issues through better operational efficiencies andand after-sales services, so are less susceptible tooptimization

economic trends and deliver stable earnings.

For shipowners: Reduce vessel operating costs and environmental impact✓These are asset-light businesses that do not require

For crews: Reduce workload and improve operational safety

large investments in factories and production facilities.

Overview of Business Segments

products, and specialized equipment businesses, including

Hitachi Kokusai
Electric
72（27%）

MarineSystems48（18%）

Sustainability

Business Overview■ Key measures under the medium-term management plan
● Develop elemental technologies and launch products to automate and streamline operations● Steadily capture new shipbuilding demand by leveraging service network, etc.

of ships’ logs
■ Capital expenditure and R&D● Promoting R&D and the proactive launch of elemental technologies for automatic navigation✓New bridge system capable of open architecture✓Large motion turbulence detection system✓Technology to automatically generate aversion routes● Plans do not include large capital investments such as plant construction or line expansion.

16

17

Data Section● Reinforce ongoing relationships with customers through digital-enabled services such as the lifetime management

Connect Everything, Create Value ｜ Medium-Term Management Plan 2026
Strategies by BusinessWireless and Communications Business
Target Directions
Further expand market share in the disaster prevention field,
which is the foundation of the company's business, and create a

Quantitative Targets

80
70
60

20
10

capacity through the above initiatives

0

Business Overview and Strategy● In order to win orders, it is essential to be able toidentify customer issues and to make attractive
proposals that address those issues, as well as to be
price competitive.
■ External environment● The public works budget is expected to remain at its

FY2023
results

1

FY2025targets

FY2026targets

wireless, which are essential for national defense andinfrastructure● Provide safety and security in the face of increasingly

severe disasters (zero-delay escapes)✓Sensor monitoring, information processing, early
information coordination, etc.
● Realize unmanned and labor-saving solutions amid thechallenges of a declining birthrate, aging population,and labor shortage challenges✓Drone flight support through automatic switching ofincrease significantly.

automatic vessel identification for maritime● Public sector: National, prefectural, and municipal

governments● Private sector: Electricity, gas, broadcasting

companies, etc.
■ Strengths● Network to detect customer issues and ability to● Proven track record and high reliability in water andsurveillance, port management, etc.
■ Key measures under the medium-term management plan
● In the solutions business, build a disaster prevention

information sharing platform and infrastructure fordrone navigation over rivers● In specialized equipment, promote development

toward the realization of high-power microwave
devices■ Capital expenditure and R&D● We will continue to invest in R&D to achieve data-

driving transformation of our business model.
✓Data platform construction

river information systems and disaster prevention✓Network infrastructure technology

systems✓Sensor systems✓Market share of around 30% in water and river
information systems and around 15% in disasterprevention systems*

Operating margin80● Maintain and deepen the social infrastructure business,

70
60

our traditional core business, and accelerate new business

50

creation and customer development

40● Promote R&D of advanced technologies and product

5.3%

70

72

7.0%

7.2%

5.3%

8
6

4

30

development based on distinctive video and wireless

20

technologies

100● Resolve issues and create value by using sensing,transmission, and analysis to link cyberspace (business

68

66.3

2

FY2023
results

FY2024targets

FY2025targets

FY2026targets

0*IFRS basis for FY2023 (PL consolidated from 2024)

systems) and physical space (on-site)

Business Overview and Strategy● Plans do not include large capital investments such as

plant construction or line expansion.
*Based on the Company’s own research● We develop, manufacture, and sell system solutions and products centered on imaging and wireless technologies,

as well as providing maintenance and related services.
■ External environment● The public works budget is expected to remain at its current size through fiscal 2025.

✓The budget for digital infrastructure will continue to increase significantly.
● The defense budget will grow in line with the policy of dramaticallystrengthening defense capabilities through fiscal 2027.
■ Main customers● Public sector: National, prefectural, and municipal governments● Private sector: broadcasters, railroads, telecom carriers, manufacturers,

etc.
■ Strengths● Solution business combining "sensing" such as video, "transmission" suchas 5G, and "analysis" using AI● One-stop services from development to manufacturing, system construction, maintenance, and operation in both

wireless and video fields■ Value provided● Supporting a sustainable society through manufacturing and providing safety and security by means of imaging,

wireless, and IT technology■ Key measures under the medium-term management plan
● Accelerate customer business and operational efficiency by developing IT-enabled businesses

Data Section

propose solutions to those issues

Net sales(Billions of yen)

Overview of Business Segments✓Next-generation maritime communications and■ Main customers

leveraging synergies.

Quantitative Targets■ Business characteristics■ Value provided✓The budget for digital infrastructure will continue tofiscal 2027.

0● Wide range of communication technologies, especially

radio networks

dramatically strengthening defense capabilities through

4

2

1.8%
FY2024targets

5

3

current size through fiscal 2025.

● The defense budget will grow in line with the policy of

18

1.5%

6

Hitachi Kokusai Electric Group

Sustainability

defense.

5.6%

30

●R
 aise profitability and improve cash flow generation

satellites, traffic management, broadcasting, and

79

3.6%

40

resilience and basin flood control measuresriver management, aerial surveillance, meteorological

72

50

●R
 espond to advanced systems (digitalization) in landand sale of radar and communication systems for

62.7

66

Strengthen the Nisshinbo Group's total solutions and accelerate
the expansion of the Wireless and Communications Business by

Operating margin(Billions of yen)river management and disaster prevention● The company's business includes the manufacture

Target Directions

Net sales●E xpand market share in the foundation fields of dams,■ Business characteristics

Wireless and Communications Business

Value Creation

digital business that leverages its high market share.

Strategies by BusinessJapan Radio Group: Solutions andSpecialized Equipment● Promote customer co-creation in areas of private-sector demand● Grow specialized equipment through new business utilizing applied radio wave technology● Develop and reskill system engineers and digital human resources for the solution business■ Capital expenditure and R&D● Plans do not include large capital investments such as plant construction or line expansion.
● We will strengthen R&D in 5G/beyond 5G, image recognition, AI, etc.

19Connect Everything, Create Value ｜ Medium-Term Management Plan 2026
Strategies by Business

Innovation-Creating Initiatives

Micro Devices BusinessWe will create new digital services of value to users by integrating the core technologies of the Nisshinbo Group, with aTarget Directions

focus on the Wireless and Communications and Micro Devices businesses.

Quantitative Targets

Contribute toward the resolution of issues faced by society andcustomers by creating customer value leveraging the value we have

Net sales

Operating margin120● Maintain sales expansion by capturing growth in the analog

100

semiconductor market

8080● Improve profitability through a shift to high-function products

4.4%

60

such as multi-functional ICs and modules

40● Develop analog solution devices utilizing distinctive sensors

20such as sound, smell, and microwave● Develop unit and digital business development with a view to0

the future through collaboration among technologies within

88

98

3.6%

109

8

8.1%

1.2%

FY2023
results

FY2024targets

FY2025targets

10

FY2026targets

Creating new value through2

make everything visiblesea, air, and space to transmit

digital technology●W e contribute toward improvements in energy● Build relationships with customers who will become● Shift to multi-functional and modular products■ Capital expenditure and R&D✓Capital investment in plants, mainly for back-end

markets (operational amplifiers, comparators,
LDOs, microwave electron tubes, etc.) and coretechnological capabilities such as low power
consumption, low noise, high precision, etc.
● Flexibility and quality stability through integrated

processing✓Expand use of foundries and OSAT
● New product development through collaborationand technology integration with Group companies● Research and development for modularization andunit/digital business

InnovationCreating Initiatives

Accelerating digitalization
Growing demand for action to address climatechangeDemographic changes (falling birthrate, aging
population, labor shortages)

Phased array weather radar (3D high-speed
observation of weather phenomena)

Odor sensing platform(detection of abnormal odors in factories)

AI-based disaster prevention and mitigation
systems (river flooding/tsunami/evacuation)

Acoustic sensing(predictive maintenance, noise cancellingstethoscope)

Satellite image data application(diagnosis of crop growth)

Image and radar sensor fusion(obstacle avoidance for mobility, etc.)

Fully automated drones (disaster prevention information provision service, labor-saving monitoring andinspection of rivers and structures)
5G, beyond5G/6G, terahertz wave communication solutions (disaster prevention/mitigation, manpowersaving, safety assurance, etc.)
Highly reliable communications using quantum cryptography and network observability (data security
for finance, medicine, defense, etc.)
Communication solutions accessible anytime/anywhere (including satellite and underwatercommunications to increase convenience in peacetime and provide backup in times of disaster)For a more detailed explanation of examples of initiatives aimed at creating innovation, please see pages 26-27.

front-end/back-end production
20

21

Data Section● High market share for products in multiple niche

opportunities

alliances to strengthen digital technology● Automotive: Manufacturers of automobiles (including

customer relationships

Business

new strategic partners● More investment to reinforce the production system● Ability to respond to customer issues and strong

Provision of valuable digital services to users● Promote collaboration through M&A and business● Industrial: Manufacturers of industrial equipment and robots■ Strengthsof AI and other digital technologies● Ensuring robust security

Overview of Business Segments

cycles are longautomotive parts)business, and society through the use

Integration of core technologies +external technologies
and knowledge, alliances, M&A●E xpand our market share in products for automotive

is expected to recover in the second half of 2024,

manufacturers

in previously unconnected areas■ Key measures under the medium-term management plan

environment is low in volatility and development● Consumer: Smartphone, PC and AV equipment

growth in information volume● Digitization of sensing information

efficiency, and other technological capabilities.

and industrial equipment where the operating■ Main customers

a wide variety of data
● Creation of new value for individuals,● Provision of seamless communications

through sensor fusion

take advantage of low power consumption, high✓Demand for industrial and consumer applications

semiconductor shortages.

waves, sound waves, cameras, and● Efficient analysis of large volumes andcommunications to facilitate further

Sustainability■ Value provided

less than 10% between 2012 and 2014.

is expected to continue to recover following● Provision of high-capacity wirelesssensors including electromagnetic● Sophisticated object detection

impact through the development of products thatwhile the demand for automotive applications● Utilization of a wide variety ofsemiconductors

sensor signal processing ICs.

●T he market is expected to grow at a CAGR of slightly

and collect information0

efficiency and reduction in customers’ environmental

worth approximately ¥13 trillion.

Information processing

Seamlessly connecting land,

power control system ICs, operational amplifiers, and● In 2022, the analog semiconductor market was×

Utilizing proprietary sensors toBusiness Overview and Strategy■ External environment

Wireless communications

4and outside the Group, in addition to existing technologies in the areas of electronic devices and microwaves● We develop analog semiconductor products such as×

Sensing

6

Value Creation

provided through analog technology■ Business characteristics

The Nisshinbo Group’s core technologies(Billions of yen)Connect Everything, Create Value ｜ Medium-Term Management Plan 2026
Cash Flow Allocation

Financial Strategy and Shareholder Return Policy

We intend to invest aggressively in focused areas (Wireless and Communications/Micro Devices businesses) and aim for a dividend
payout ratio of 40% in order to realize our target business portfolio.

Target Capital Structure

D/E ratio: Aim for 0.7 times or lower● Aim for both optimal capital efficiency and financial soundness to allow for strategic

financing.

■ Shareholder returns

40% through fiscal 2026

● Aiming for a dividend payout ratio of¥30.0 billion● Make flexible decisions on share buybacks based on capital structure,

Operatingcash flow
operations(before R&D)/
sales ofassets¥290.0

Policies under the MediumTerm Management Plan

returns.

■ Strategic investmentsbillion31%¥190.0billion■ Percentage ofinvestment in focus areas● Our basic policy is to maintain or increase dividends, using ¥36 as our minimum annual

17%Strategic
investments+Capital
expenditures+ R&D expenses¥230.0billionShareholder Return Policy

long-term outlook for free cash flow, and other factors, while securing the necessary
funds for investment in growth.

24%

28%

Reinforcing the Management Base (Sustainability)
Key Themes for Reinforcing the Management Base
● Continuously strengthen the management foundation across the Group to realize our aims

Cash outflows*(2024–2026)● Reduce management risk and the cost of capital by addressing key themes, aiming for sustainable growth and theenhancement of corporate value over the medium to long term

* Policies at the beginning of the medium-term management plan

Strategic investment examples

dividend.
● We will be flexible on share buybacks based on our capital structure, the medium- to

Capital expenditures + R&D
expenses(Wireless andCommunications)

Capital expenditures+ R&D expenses(Micro Devices)70%

profit grows.

Strategic
investments

Capitalexpenditures +R&D expenses(Others)

growth, including M&A, to transform
our business model in focus areas(business model utilizing digitaltechnology)■ Capital expenditures+ R&D expenses● We aim for a dividend payout ratio of 40% by fiscal 2026 and will increase dividends as

Sustainability¥190.0¥40.0 billion● Invest strategically and flexibly in¥40.0 billion

Capitalexpenditures +R&D expenses

the business portfolio that we aim for.
and use the proceeds from sales as a source of funds for investment and shareholder¥30.0 billion
Strategic
investments(M&A, etc.)

scope of operating cash flow and we will prioritize investments in focused areas to create● From the viewpoint of improving capital efficiency, we will systematically reduce assets

medium- to long-term free cash flow outlook, etc.

Shareholder
returnsbillionCash inflows*(2024–2026)● The Company's basic policy is to invest and return profits to shareholders within the

Value Creation

Reduce interestbearing debt

● Respect and protect the human rights of all people associated with the Company, and promote business activities with anawareness of respecting, protecting, and promoting human rights

Acquired 80% of Hitachi Kokusai Electric Shares

Key themes and policy initiatives for reinforcing the management baseAcquisition value: ¥34,773 million

Overview of Business Segments

Acquisition completed: December 27, 2023

Respect for human rights

Nisshinbo Group holding after share acquisition: 80%
Acquisition purpose: To contribute to the enhancement of the Nisshinbo Group’s total solutions capabilities, andexpand its business domains through the synergies created✓Strengthen management systems that foster a consciousness toward respecting, protecting, and promoting

human rights through human rights due diligence efforts● Maximize sales and ensure profitability through the promotion of account management and horizontal deployment of know-how● Improve profitability by prioritizing target customers and clarifying projects● Resolve issues and create value by linking cyber (business systems) and physical (on-site) spaces

Consolidated Operating Results and Financial Position for the Past Three Fiscal Years(Millions of yen)

Fiscal 2020

Fiscal 2021

Fiscal 2022

Consolidated net assets

16,326

16,75821,773

Consolidated total assets

80,58775,38569,596

17,55518,01923,412

Consolidated sales revenue—

77,234

67,148Net income attributable to owners of the company

116

3,587

3,761

Consolidated net income per share (yen)

125

3,856

4,044

Divided per share (yen)

—

1,075

430

Note: Fiscal 2020 figures are based on Japanese accounting standards; from fiscal 2021 onward, figures are based on International Financial Reporting Standards.

22✓Consider opportunities

and risks related toreduction of greenhousegas emissions andnatural capital✓Steadily promotebusiness to expand
sales of products

Promote the acquisition,
development, andadvancement of diverse
human resources✓Promote the acquisition,

development, andsuccess of diverse
human resources based

Build a responsible
supply chain✓Promote sustainable

Improve theeffectiveness ofcorporate governance✓Continue corporate

procurement initiatives

governance reforms

throughout the supply

to establish effective

chain

governance

Data Section

Consolidated net asset per share (yen)Develop businesswith consideration forenvironmental impact

on the Nisshinbo Group
Human Resources
Strategythat contribute to asustainable society
For a more detailed information of “Reinforcing the Management Base (Sustainability)”, please see pages 28-55.

23

Connect Everything, Create Value ｜ CFO Message

Wireless and Communications and Micro Devices businesses
the mainstays of our portfolio.
Over the next three years, as CFO, I will be proactively

Increasing PBRAt present, Group PBR is under 1x, and we continue to fall shortincrease profit margins, then achieve sustainable growth. To

same time, in non-core areas, I will assess business fromthis end, we must strive to improve the profitability of existing

The pressing issue at the moment is to improve short-term

the perspective of consistency with the Group’s corporate

businesses, while also making use of M&A, business transfers,

profits and reduce assets, which requires thorough inventory

philosophy, growth potential, profitability, return on capital,and other methods to transform our business portfolio andmanagement. We must work to liquidate inventory for businessand industry competitiveness, then proceed with optimizing

improve profitability by transforming our business model.

use. I strongly dislike the term“appropriate inventory,”as I
am worried that the abstract expression“appropriate”may

Promoting Business Portfolio Transformations

lead to laxness in areas such as purchasing, shipping, andand going forward, we will continue to assess businesses by

ROIC will be an important indicator as we move forward witheveryone in the workplace. Over the next three years, the Group

comparing them to the WACC for each business.

future portfolio transformation. For businesses where ROIC ismust bring inventories valued at approximately ¥20 billion

Director and Managing Officer
Deputy Chief of Corporate Strategy Center

Basic Financial Strategy
The Nisshinbo Group’s basic financial strategy is to promotemanagement emphasizing profitability and efficiency while
maintaining financial soundness in preparation for medium- tolong-term investment and risks. The Group develops a diverse
range of businesses centered on the environment, and we havecontinued to restructure these businesses with the missionof contributing to society through business activities. We willcontinue to fulfill this mission while aiming for further growththrough the transformation of our business portfolio.

back to previous levels and improve asset turnover efficiency.

if there are no prospects of improvement. In 2024, we plan to

However, what is truly important is not simply reducing the

expected in the near future, there is a sense of urgency thatfurther deepen discussions on assessing business at monthly

amount of inventory on hand. There are also businesses within

unless business profits are raised even further, we may lose out

Board of Directors meetings, and verify whether we can achieve

the Group that rely on inventory to do business, such as thein terms of financing and other financial opportunities gearedsolid business results going forward.

processing field involving semiconductors and other products,

Specifically, the target areas are Automobile Brakes,

as well as the marine business, which is based at ports andto promote business portfolio transformations and increase

Precision Instruments, Chemicals, and Textiles, which haveconducts proposal-based sales, thus it is also important tobusiness profitability.

been summarized as the materials domain. In determining

grow the top line at the same time as implementing thoroughwhich areas to expand and which to reduce or withdraw from,inventory management.

Capital Allocation

I think one of the key points is whether or not synergies can becreated with the focus areas of Wireless and Communications

medium-term plan. I think it is important to maintain a strong

Our financial policy emphasizes a balance between optimal

and Micro Devices.

determination to achieve established numerical targets, unlesscapital efficiency and financial soundness to ensure strategic

If we honestly evaluate each business plan in the materials

The same can be said of the numerical targets for the entire

something unexpected were to occur. Accordingly, we will

financing. We will systematically reduce assets to improvedomain using DCF and other methodologies, we will arrive

maintain efforts to achieve the management targets announced

capital efficiency. In addition to operating cash flows, funds

at appropriate corporate values. However, the total of thesein the new medium-term plan, especially the operating income

obtained through the sale of assets will be proactively invested

corporate values is not reflected in the Nisshinbo Holdings

target of ¥38 billion.

and profits returned to shareholders, as we prioritize investments

consolidated share price. At present, this is something that has

in focus areas aimed at achieving our ideal business portfolio.

been discounted.

Specifically, over the three-year plan period, we assume

To improve PBR and achieve a fair assessment of corporate

Expanded Disclosure of Non-financial
Indicators

the generation of approximately ¥290.0 billion from cumulativevalue, it is essential to improve profit margins. To this end, we

operating cash flows and asset sales, of which approximately

approach business portfolio reforms with a strong sense ofWith regard to non-financial indicators, three years ago I personally¥190.0 billion will be allocated to capital investment and R&D

urgency, as we cannot continue to maintain businesses thattook on the role of spearheading a disclosure project in line

expenses, and approximately ¥40.0 billion will be allocatedare driving down profit margins within the Group. I see it as mywith the TCFD framework aimed at enhancing climate-related

to strategic investments in focused areas. We expect to invest

responsibility to ensure business units facing difficult conditions

financial information disclosure. Over the past three years, risk

around 70% of the approximately ¥230.0 billion generated fromare prepared, which I will continue to do forcefully.

and opportunity analyses based on future scenarios have been

the combination of these two efforts in focus areas.

At the same time, in Wireless and Communications, which

conducted for all segments, and we are working towards the goal

is a key focus area, we are looking forward to growth, especiallyof net zero by 2050, targeting a 50% reduction in CO2 emissions by¥30.0 billion to shareholder returns with the aim of achieving a

in the Solutions and Specialized Equipment businesses. The

2035 compared to fiscal 2014 levels. Next, we will also be working

dividend payout ratio of 40% through fiscal 2026. The full-year

Solutions business is involved in social infrastructure projects

on our response to the Task Force on Natural-related Financial

dividend for fiscal 2023 was ¥36 per share. Going forward, wesuch as dams, river management, and disaster prevention, while

Disclosures (TNFD). This will be the second round for eachwill maintain this level and consider increasing dividends with

the Specialized Equipment business works with the Ministry ofbusiness unit, but this time we will start with natural capital at thethe aim of achieving a payout ratio of 40%.

Defense. Both have strengths in the government procurement

core. In line with our mission, it is only natural that we should strive

At the same time, we plan to allocate approximately

The Nisshinbo Group announced Medium-Term Management

The remaining ¥30.0 billion in cash will be used to reducebusiness, with Japan Radio and Hitachi Kokusai Electric, whichto avoid placing a burden on the environment, and we will continue

Plan 2026 in April 2024. The key element of this new medium-

interest-bearing debt. We have set a D/E ratio of 0.7 or less as

recently joined the Group, possessing strengths in this area. The

to make the environment a key factor in our business decisions. We

term plan is the promotion of business portfolio reform. The

a guideline for our target capital structure.

new medium-term plan only incorporates the idea of 1 + 1 =will expand TCFD, TNFD and other information disclosure while

2, but in the future, we hope to be able to create new value bycontinuing to further accelerate sustainability initiatives.

plan also clearly defines the Group’s intention of making the24

25

Data Section

Medium-Term Management Plan 2026
Formulation

below WACC, drastic measures will probably have to be taken

Overview of Business Segments

Shuji Tsukatani

Domestic interest rates have begun to rise, especially

Sustainability

Term Plan Targets

manufacturing. For this reason, I must constantly remindsince the beginning of 2024. With further rises in interest costs

towards investment in growth. For this reason, it is essential

Value Creation

Communications and Micro Devices businesses. At theGroup in fiscal 2023. We also calculate ROIC by business,

Resolve and Achieve New Medium-

Improving Profits

of stock market expectations. To increase PBR, we must firstweighted average cost of capital (WACC) of 5.7% for the entire

Transformations with Unwaveringbases.

investing in focus areas including the Wireless andthe allocation of management resources. We are looking at a

We Will Promote Business Portfolio

promoting the integration of mutual technologies and customer

Connect Everything, Create Value ｜ Medium- to Long-Term Initiatives in the Wireless andCommunications BusinessMedium- to Long-Term Initiatives in the Wireless andCommunications Business
Nisshinbo’s Wireless and Communications business leverages core technologies comprising communications, sensing,and data analysis technologies to provide disaster prevention warning systems, dam control systems, and other social
infrastructure.

3 Weather Radar Advancements
We will respond to increasingly severe disasters by advancing the functions of our weather radars, which have a high market share in Japan,
and improving measurement precision to enhance prediction and forecasting accuracy.

1 Advanced Disaster Prevention Solutions: Targeting More Sophisticated and Personalized Prediction
55%

information processing, and evacuation support efforts up to now.
Up to now

to
Point
e
sur fac

Sensor monitoring
Limited to areas

such as dams and riversveEﬀec ti tionu nicaco m m fo
ation
inform

Evacuation support
Use of broadcast radio anddoor-to-door receivers(individualized)

Drainagechannel(creek)3D rainfall observation solution

Contributes to improved
prediction and forecasting
accuracy

Urban area

4 Systems for Ports

information isprovided, taking into
account factors suchas location andfamily conditions

Drain gate

Using phased array technology,
the position of clouds and theamount of rain are observed
and displayed in 3D.

To realize labor-saving and automated port monitoring and management operations, Nisshinbo will provide maritime traffic monitoring
solutions and vessel entry/exit port management solutions coordinated with vessel-side solutions.

Overview of Business Segments

There are issues related
to reliable evacuation
support

Improving measurement precision through the development of

Evacuation support

Personalized

Evacuation decisions arerule of thumbincreasingly severe disasters...

more sophisticated radar systems

ensures evacuation lead time
Flood pond

20%

Company
B

Data shared with existing systems to coordinate
information; early prediction of ﬂood risk

Reservoir

Regulating
reservoir

Information processing

From now

Further advancing accumulated
technologies to contribute tosafety and security in response to

Sustainability

between national andprefectural governments andmunicipalities

Dam

CompanyA

Sensor monitoring

・Areal precipitation observation using
phased array weather radar
・Surveillance through the use of dronesnoratioColl ab danstingforecaInformation processing
Only a small portion ofdata collaboration

25%

Individual optimization through river
basin coordination

Eﬀorts to ensure zero escape delays

High market share in Japanfor weather radar systems

Up to now

To ensure zero delays in escaping disasters, we will provide advanced disaster prevention solutions that build on sensor monitoring,

Value Creation

To resolve social issues going forward, we will create solutions business founded on IoT.

Providing port solutions realizing labor saving and automated port monitoring and management operations

Urban area

From government to resident-led evacuations

Appropriate evacuation behaviors lead tozero escape delays

Maritime traﬃc surveillance solution

Vessel entry/exit port management solutions

2 River Highway Concept
There are currently high expectations for the ability of drones to quickly collect information and for their use in logistics in river basins, andthe Nisshinbo Group is working to build the communication infrastructure needed to achieve safe navigation.

Automatically switches
between public networks(mobile lines) and privatelines

20XX onward

Private line

Plan to start
using airspace
above rivers

Private line

Delivered drones for river
patrols to Ministry of Land,
Infrastructure, Transport
and Tourism

Nisshinbo Group Strengths

Competitive Advantage 1

Competitive Advantage 2River and waterway information system forgovernment agencies

Capital and business alliance with

Nisshinbo possesses a variety of wireless system technologies suitablefor drone navigation
Medium-range,
Long-range,high-capacity wireless
low-capacity wirelesscommunications
communications

Aerosense Inc., a Japanese industrial
drone manufacturer(October 2022)

Automated vessel identiﬁcation

Next-generation maritime communications
March 2024

Digitalcommunications
between vessels

Communications app

SensorfusionHigh-precision
sensing

Data Section

Public network(mobile lines)

Solutions leveraging achievements and knowledge

Contributes to labor savings in port
management operations and more eﬃcient port
fee collection

Contributes labor-saving in maritime traﬃcsurveillance operations

for logistics

Private line

Approx. 30% share

Docking and load management support

Remote surveillance, center facilities integration

Automated vessel
identiﬁcationAI

The Nisshinbo Group, which has a long track record of delivering numerous water and river-related infrastructure
facilities, will leverage this knowledge and our unique wireless communication technologies toDigitalization of safety and navigation support

Port surveillance radar noise reduction, automatedlandmark recognition

develop solutions that enable drones to safely navigate above rivers

26

27

Connect Everything, Create Value ｜ Materiality, Risks and Opportunities

Materiality, Risks and Opportunities
With its corporate philosophy“Change and Challenge! For the creation of the future of Earth and People,”the Nisshinbo
Group has since its founding inherited the basic spirit of corporate public institutions of contributing to society throughbusiness activities. We are placing sustainability at the heart of our thoughts on corporate management and proactively

Materiality and Related Major Risks, Opportunities and Responses
ESG

Materiality

sustainable growth for the Nisshinbo Group’s business together with society.

Materiality of Nisshinbo Group● Contribution to the environmental and energy field ● Creation of a safe and secure society ● Global compliance

Process of Determining Materiality
2. Prioritize social issues

3. Deliberate and approve at the
Corporate Strategy ConferenceFirst, we identified social issues,

During Group Sustainability

The Corporate Strategy Conference,referring to ISO26000, the fourth

Promotion Council deliberations, wechaired by the president ofedition of the GRI Guidelines, the 10prioritized the social issues we had

Nisshinbo Holdings and comprisingprinciples of the UN Global Compact

identified from the perspective of

all managing officers, deliberated theand other social norms. We then

their importance to stakeholders andissues’ materiality. After considering

evaluated their relationship to thetheir importance to the Nisshinbo

the importance of these social issues

Group’s businesses and identified 22

Group, coming up with a draft

and their relationship to the Group’ssocial issues for consideration.

proposal.

businesses, we determined the threematerial issues indicated above.

Strategic
business domains

Mobility

Infrastructure& Safety

Life &
Healthcare

Contribution
to theenvironmental
and energy
field

Business segments●●●

Micro Devices

●

●

●

Automobile Brakes●

Precision Instruments●

Chemicals

●

●
●

●
●

Real Estate●Core SDG objectives andtargets in our business

Target 3.6

Target 7.3

Biologicalresources

Water
resources• Impact of water shortages on
manufacturing processes• Decreased production costs
due to water conservation

Response to Risks:•Promote water conservation and recycling• Work environment deterioration
caused by harassment and otherhuman right issues• Loss of stakeholder trust andoperational continuity caused
by inadequate consideration forhuman rights－• Develop human rights policies, introduce and promote
human rights due diligence in areas where human rights
risks are high• Establish a human rights awareness group ay HD and
conduct Group human rights training• The Nisshinbo Group Sustainable Procurement Basic Policy
and Sustainable Procurement Guidelines clearly specify
the prohibition of forced labor and child labor, and ensure
respect for human rights in the supply chain

Target 13.1

Human
resources• Implement strategic PR activities to improve the corporate
visibility and image• Strengthen mid-career recruitment• Retain human resources through career support and aninternal recruitment system• Develop human resources through the establishment of a
training system and expanded e-learning menu items• Implement program cultivating successors

Occupational
injuries• Occupational injuries due to lack－of education and training• Loss of stakeholder trust caused byoccupational injuries and accidents• Conduct risk assessment• Conduct education and training, share accident case studies
across the Group• Loss of trust, claims for damages
or product recalls due to quality
issues or defects with products
or services－

Quality• Use the risk management system to minimize risk
probability and potential impact• Establish a quality assurance team at HD to oversee quality
assurance and product safety activities at Group companies• Management impact of failed
M&A and other efforts• Diminished management
efficiency due to overlapping
functions between businesses• Harness the Group’s diverse
strengths by integrating
businesses/organizations todrive innovation and increase
resilience to changes in theoperating environment• Development and sharing of procedures for M&A
operations• Improve efficiency by overhauling Group-wide organizations
and outsourcing

Businessmanagement• Business continuity risks
associated with dysfunctional
corporate governance andinternal controls• Take risks based on abalance between proactive
and defensive governance• Aim to achieve a strong balance between improving
management transparency through proactive governancereforms and taking bold risks－

Compliance• Loss of trust and damage tocorporate value caused by legal
violations such as corruption or
anti-competitive practices, or bycorporate behavior that diverges
from social norms• Employ messaging from the president of HD to underscorethe importance of fair business practices• Provide continuous compliance training• Impose severe penalties for misconduct• Financial window-dressing,accounting irregularities, etc.

－

• Use the internal control system and the corporate ethics
reporting system to prevent misconduct• Employ regular rotation to prevent misconduct－• Unauthorized disclosure of
personal information, customer
information or trade secrets• Adverse impacts on business inthe event of unauthorized access,tampering, data destruction orloss, leakage or other damage
caused by cyberattacks, etc.

• Conduct continuous training and annual internal audits toassess information security• Conduct cybersecurity measures and implement requisite
countermeasures while ensuring multi-level protection

Fraud/Illegal
conduct

Target 3.2

Target 9.4

Response to Opportunities:• Capturing demand for products and services that take into
account environmental and biodiversity conservation• Human resource shortage due to • Promote the overlap
labor force contraction
between the Corporate• Low motivation and loss of human
Philosophy and the growinginterest in ESG among
resources due to mismatchedyounger people, leading towork assignments, etc.
more hiring opportunities• Business promotion delays due
to imbalanced personnel age
structure

Information
security

Target 9.4

Responses to Opportunities:• Expand EV-related product development and manufacturing• Capture demand for energy-saving products(e.g., semiconductors, electronic device–related products)• Develop and manufacture millimeter-wave radar water level
gauges and capture demand for anti-corrosion products
and services

Data Section

TextilesGlobalcompliance

Responses to Risks:• Avoid carbon taxation by reducing greenhouse gas emissions
and energy conservation, and reduce energy costs• Prevent and mitigate property damage and loss of businesscaused by flooding• Implementation of impact assessments related to naturalissues in accordance with the recommendations of theTaskforce on Nature-related Financial Disclosures (TNFD)

Group
management

G: Corporate Governance

Wireless and Communications• Conduct climate change scenario analyses according to the
Task Force on Climate-related Financial Disclosures (TCFD)
recommendations• Increased procurement costs due • Increasing demand for
products and services
to rising prices of raw materials
that take into accountand agricultural products
environmental conservation• Uncertainty over the stableand biodiversity
supply of raw materials andconservation
agricultural products

Human rights

Creation ofa safe andsecuresociety• Growing demand for EVs,
• Increase in raw material
new energy vehicles, smart
procurement costs andmobility and fuel cell–related
manufacturing costs due to
products
carbon taxation• Higher sales of energy• Increase in energy costs due
saving semiconductors andto requests from customers toelectronic device–related
reduce greenhouse gas emissions
products• Increase in costs due to property• Growing demand fordamage and loss of businessdisaster prevention productscaused by flooding
and services driven byheightened
flood risk

Responses to risks and opportunities

For risks related to business, please see pages 30–32 of the 181st Securities Report.

28

Overview of Business Segments

Strategic Business Domains, Business Segments and Related SDGs

ClimatechangeOpportunities

Sustainability

1. Identify social issues forconsideration

S: Social Initiatives

In February 2015, we identified material issues for the Group in order to clarify issues that required action to achieve

Risks

Value Creation

Nisshinbo Group Materiality and Process of Determining Materiality

E: Environmental Initiatives

pursuing sustainability initiatives.

Major risks andopportunities

29

Connect Everything, Create Value ｜ Environmentally Conscious Business Developments

Environmentally Conscious Business Developments
Basic Concept

・Reduction of Greenhouse Gas Emissions

The Nisshinbo Group is aiming to increase corporate value as a more united corporate group by realizing its Corporate Philosophy —“Change andGreenhouse gas emissions in FY2023 were 46% lower than in FY2014, the target level for FY2024 has been reached. The percentage ofelectricity used by the Group derived from renewable energy sources increased to 21% (compared to 8% in the previous fiscal year) as a result

Business Conduct Guidelines, we have a deep understanding of environmental behavior and actively engage in and act on environmental activities.

of the expansion of solar power generation facilities in Japan and overseas and the switch to renewable energy-derived electricity for purchased

As an Environment and Energy Company group, we will continue to offer new products and systems that help protect the environment, saveelectricity. In addition, the installation of additional perfluorocarbon (PFC) and other gas abatement equipment in the Micro Devices businessenergy and create alternative sources of energy, while also providing solutions that address some of the greatest issues faced by humanity today,

resulted in a decrease in emissions.

such as environmental destruction and natural disasters caused by climate change, to make life safer and more secure for people everywhere.

The Nisshinbo Group's actual greenhouse gas emissions (Scope 3) in FY2023 were approximately 1,915 thousand t-CO2e, up 19% fromthe previous fiscal year's greenhouse gas emissions. The increase was mainly due to improved statistical accuracy at overseas sites.

Long-Term Environmental Target (to fiscal 2050)
Aim to be Carbon Neutral

Specific Initiatives of The Nisshinbo Group

Medium-Term Environmental Target (to fiscal 2030)

to70％ or more of total sales

Global warming countermeasures
Reduce greenhouse gas emissions
by

50％ or more compared

MWh of electricity derived from renewable energy in FY2023.

Contribute to the realizationof a recycling society
Improve the recycling ratio

to fiscal 2014

to95％ or more

Nisshinbo Holdings Inc., Head Office, purchases electricity derived from hydroelectric and solar power generation; and Japan Radio Co., Ltd.

Water resource countermeasures
Reduce water usage per unit of
sales
by

Nagano Plant, Ueda Logistics Center, Nagano Japan Radio Co., Ltd. Head Office & Factory, Ueda Japan Radio Co., Ltd. Head Office & Main
Factory in the Wireless and Communications business purchase green power derived from hydroelectric power generation; and Nisshinbo

70％ or more compared

Brake Inc. Tatebayashi Plant, Nisshinbo Somboon Automotive Co., Ltd., Nisshinbo Automotive Manufacturing Inc. in the Automobile Brakes

to fiscal 2014business purchase electricity derived from solar power generation; and PT. Nikawa Textile Industry, PT. Nisshinbo Indonesia and PT. Naigai

Key action items

Reduction of greenhouse gas emissions*1
Reinforcement of the maintenance of biodiversity
Reduction of water usage per unit of sales
Promote Life Cycle Assessment (LCA)*3
Reduction of the energy consumption per unit of sales
Reduction of the volume of PRTR*4 substances emissions per unit of sales
Improvement of recycling rate

The 5th Three-Year Environmental Targets

60% or more of total sales

Fiscal 2023 results

・Reinforcement of the Maintenance of Biodiversity

53% of total sales
2*1 Please refer to Nisshinbo’s Sustainability website for details regarding emissions calculation methodologies.
*2 FY2023 activities started: Ueda Japan Radio Co., Ltd. (Japan).
*3 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.
*4 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 Chemical Substancesin the Environment and Promotion of Improvements to the Management Thereof”for which reports of their amounts of release and transfer must be filed.

In the enhancement of biodiversity conservation activities, in FY2023, Nisshinbo Group registered the maintenance of forests and satoyama in
consideration of biodiversity by the Nigiyaka na Mori Project of the Kamiko Forest Certification Council in which Ueda Japan Radio Co., Ltd. andother segments are also considering the details of new activities to be determined.
Specific Initiatives of The Nisshinbo GroupThe Nisshinbo Group started biodiversity conservation activities in FY2015 and expanded
the scope of activities by participating in biodiversity conservation activities (activities ofsatochi-satoyama conservation, forest conservation, and marine conservation) conductedin protected areas by protecting threatened species and conducting conservation activities
in collaboration with regional and local governments, NGOs and NPOs, universities, local
companies, and supply chain entities. Currently, Nisshinbo Group is engaged in biodiversity

Fiscal 2023 Progress toward Three-Year Environmental Target Key Action Items

conservation activities at eleven business sites in Japan and five sites overseas.

The Nisshinbo Group is making steady progress on all eight of its initiatives, with five of them having achieved fiscal 2024 targets ahead ofTokyo University of Marine Science and Technology to investigate the feasibility of collecting and monitoring marine plastic waste.

schedule.

・Improvement of the Sales Percentage by the Products that Contribute to the Development of the Sustainable Society

Example of initiatives at Japan Radio: To protect marine life inhabiting the waters off Japan's coast, Japan Radio is collaborating with the・Reduction of Water Usage per Unit of Sales

Sales of“the products that contribute to the development of sustainable society”are growing steadily, accounting for 53% of the Group's FY2023

In FY2023, the volume of water used per sale was 11.8 m3 per million yen, a 2% reduction in the volume of water used per sale in the previous

sales. The breakdown is as follows: friction materials compliant with copper and antimony regulations*5 in the Automobile Brakes business accountyear. Water consumption per net sales has been decreasing year by year because of the progress of water-saving activities, such as thefor 19%, semiconductor products (contributing to energy saving and smaller chip size in electrical appliances) in the Micro Devices business

replacement of water-cooled air conditioners with air-cooled ones in the Wireless and Communications business.

Overview of Business Segments

35% or more compared to fiscal 2014 Reduced 46% compared to fiscal 2014
Activities in Japan and abroad At more than 5 new sites Ongoing activities at three new sites*
Reduce by 65% or more compared to fiscal 2014
Reduced 78% compared to fiscal 2014
%
or
more
of
total
sales
60
60% of total sales
Reduce by 15% or more compared to fiscal 2014
Reduced 24% compared to fiscal 2014
Reduce by 30% or more compared to fiscal 2014
Reduced 38% compared to fiscal 2014
Increase the recycling rate to 90% or more
88% recycling rate
Reduce by

Sustainability

Shirts Indonesia in Textiles businesses purchase electricity derived from geothermal power generation.

The 5th Three-Year Environmental Targets (FY2022–2024)
Improvement of the sales percentage by the products that
contribute to the development of the sustainable society

Switching to Electricity Derived from Renewable Energy Sources

The Nisshinbo Group is promoting the switch to electricity derived from renewable energy, and purchased approximately 154.4 thousand

Primary targets

Provide sustainable solutions
Increase ratio of products that
contribute to a sustainable society

Value Creation

Challenge! For the creation of the future of Earth and People.”With“Awareness and Concern toward Our Environmental Impact”as the Group’s

account for 9%, non-iron shirts in the Textiles business account for 3%, disaster prevention and mitigation-related products in the Wireless andCommunications business account for 2%, and others account for 19%. We aim to achieve our targets by expanding sales through the provision ofsolutions related to disaster prevention and mitigation by Hitachi Kokusai Electric, which became a consolidated subsidiary at the end of 2023.
*5 Copper and antimony regulations: Laws of and regulations in Japan and overseas that restrict the use of copper and antimony, which are considered highly toxic
when released into the environment.

Specific Initiatives of The Nisshinbo Group

Using AQUEDUCT to Understand and Monitor Water Risks

AQUEDUCT Water Risk Atlas

The Nisshinbo Group conducts water risk assessments of all of the Group's business

Telemetering Station System Utilizing Solar Cells
The telemetering system of Japan Radio Co., Ltd., measures water levels,
precipitation, and other data on the natural environment of dams and rivers
and automatically collects this information via wireless lines. This information isused for river management, which is important for environmental conservation,such as disaster prevention and the efficient use of water resources.

30

Data Section

sites and main supply chains using the AQUEDUCT Water Risk Atlas* published bySpecific Initiatives of The Nisshinbo Groupthe World Resources Institute (WRI). In FY2023, six of the Group's business sites areclassified as "Extremely high" areas. At view point of the current water consumption atthese sites, the Group estimates that it is not highly likely to have a significant impact
on its business activities. In addition, 11 sites of its main supply chain companies areclassified as "Extremely high" areas. The Group continues to monitor the situation of
those sites and supply chains that have been assessed as "Extremely high.”* AQUEDUCT Water Risk Atlas: Maps based on 12 different water risk indicators, including "physical water stress," "water quality," "water resource regulatory
risks," and "reputational risks."

31

Connect Everything, Create Value ｜ Environmentally Conscious Business Developments

Connect Everything, Create Value ｜ Reports Based on the TCFD Recommendations

Reports Based on the TCFD Recommendations
・Promote Life Cycle Assessment
Life Cycle Assessment (LCA) in fiscal 2023 was 60% of total sales. Under the 5th Three-Year Environmental Target (fiscal 2022–2024), we will
aim for 60% or more and continue expanding the scope of these activities. In FY2023, LCA implementation was newly completed for ring yarn
(general staple spun yarn) in the Textiles business and fuel cell separators in the Chemicals business, and the implementation rate is improving.

Image of Life Cycle Assessment

LCA Software Utilization

The Nisshinbo Group is expanding its LCA activities while putting LCA software to effective

Input

Natural resources (metal, oil, water, etc.)
Energy (electricity, fuel, etc.)

product standards and manufacturing process improvements, as well as the developmentof environmentally friendly products. Naturally, the Group draws on LCA product results
to reduce energy consumption in manufacturing and emissions of chemical substances.
Additionally, the Group introduced LCA from the product development stage, contributing

Raw
Transport Material Transport
Transportmaterial
Assembly
manufacturingcollection

OutputGroup has conducted climate change scenario analyses in accordance with the Task Force on Climate-related Financial Disclosures (TCFD)
recommendations since fiscal 2021. By identifying the risks and opportunities that climate change will pose to the Group in the future, thenutilizing them in the formulation of business strategies, we will devise more flexible and robust strategies and increase resilience against futurerisks. Furthermore, in June 2022, Nisshinbo announced its endorsement of the TCFD recommendations.

Governance

Product life cycle

use to calculate LCA data in order to understand environmental impacts and promote

Believing it important to seize business opportunities and respond appropriately to risks posed by climate change, a global issue, the Nisshinbo

UseTransport

Waste

Air pollutants (CO2, NOx, SOx, etc.)
Water pollutants, waste, etc.

to the expansion of sales of environmentally friendly products.

The Nisshinbo Group established and now operates a mechanism within the Group-wide governance system* to appropriately respond to risks
and opportunities related to climate change. Responsibility for climate-related issues is entrusted to committees such as the Corporate Strategy
Conference comprising the president and executive officers, which reports to the Board of Directors, who discuss responses to reported climaterelated issues and monitor targets and progress toward their resolution.
* Refers to“Corporate Governance Structure”on page 49, Corporate Governance.

・Reduction of the Energy Consumption per Unit of Sales
Energy used in FY2023 per sales was reduced by 24% from FY2014, achieving the FY2024 target ahead of schedule. In the Textiles business,
the fact that PT. Nikawa Textile Industry stopped using coal boilers to generate electricity as of November 2021 made a significant contribution.

Strategy
An Overview
an analysis of the Group's major businesses was completed in FY2023. In FY2021, the Group targeted the Solutions business in the WirelessSpecific Initiatives of The Nisshinbo Groupand Communications business, the Automobile Brakes business, and the Chemicals business that are expected to have a large risk/opportunity

Introduction of Next-Generation Environmentally Friendly
Refrigeration Equipment

impact. In FY2022, the analysis was conducted in major businesses with production activities by covering the Marine System, ICT/Mechatronics,
and Mobility business in the Wireless and Communications business, the Micro Devices business, the Precision Instruments business, and the

Nisshinbo Micro Devices Fukuoka Co., Ltd., has selected and introduced a next-

Textiles business. For FY2023, the scope of the program includes Medical Equipment business in the Wireless and Communications business,

generation environmentally friendly non-CFC inverter-turbo refrigerator as an energy

Real Estate business, and Other businesses, as well as initiatives in the Business Development Division. The climate change scenarios used areconservation measure for its power equipment. From March 2023, the installed chillers

for a world where warming progresses (warming progression scenario, 2.5°C to 4°C) and a world where warming is controlled and active

were put into operation, resulting in a reduction of 968 MWh/year (418 t-CO2/year of
CO2 emissions) in electricity consumption for the chillers compared to the previous year.

Next-Generation Environmentally Friendly NonCFC Inverter-Turbo Refrigerator

In FY2023, the Nisshinbo Group's volume of PRTR substance emissions per unit of sales was 0.044 kg per million yen, up 8% year on year. Although
the amount of paint used was reduced at Nanbu Plastics Co., Ltd., Susono Plant through a variety of improvement activities, such as standardizationof paint conditions and digital setting of paint application flow rates, the amount of PRTR substances released into the environment increased due tochanges and additions to the substances subject to the PRTR system as a result of the revision of the Chemical Substances Control Law.

In FY2023, the volume of substances subject to PRTR handled by the Nisshinbo Groupwas 2,390 t, down 9% year-on-year (YoY). The volume of methylene bis (4,1-phenylene)

3,000

diisocyanate decreased due to lower production of spandex and elastomers in the

2,000

Textiles business.

1,000
0

Volume of PRTR substances handled

2,817 2,555 2,799 2,625

The Nisshinbo
Group

Analysisconducted on
all projects

FY2021-FY2022
Solutions business, Marine
System, ICT/Mechatronics,
Mobility business in Wireless
and Communications

Automobile Brakes

Trends in the Volume of PRTR Substances Handled
（t）
4,000

transitions occur (decarbonization scenario, 1.5°C to 2°C). Climate change scenario analysis was conducted using the steps shown below.

2,390

Chemicals
Micro Devices

・Improvement of Recycling Rate
The recycling rate of FY2023 was 88% (an increase of 4% over the previous fiscal year). This was due to an increase in the recycling rate ofbrake friction material polishing powder at overseas Automobile Brakes business sites. The Nisshinbo Group has set the target of achieving a

Zero Emissions Activities

1 Assess materiality of climaterelated risks
2 Identify and define range of
scenarios

FY2023
Medical Equipment
business in Wireless andCommunications

3 Evaluate business impacts

4 Identify potential responses

Real Estate
OthersData Section

95 % recycling rate by FY2030. To this end, The Group is engaging in initiatives to reduce the amount of waste generated by each business.

Steps of Climate Scenario
Analysis

Precision Instruments
Textiles2019 2020 2021 2022 2023 (FY)

Analysis

Overview of Business Segments

・Reduction of the Volume of PRTR Substances Emissions per Unit of Sales

Specific Initiatives of The Nisshinbo Group

Business Development
Division

Throughout the Nisshinbo Group, the Group is working toward zero emissions (a recycling ratio of 99% or more). Of its locations thatgenerated 10 tons of waste or more in FY2022, 31 locations achieved zero emissions.

For more information, please see the Sustainability section of the Nisshinbo Group website.
https://www.nisshinbo.co.jp/english/sustainability/

32

Sustainability

Since the Nisshinbo Group has a wide range of businesses, a climate change scenario analysis was conducted in stages starting in FY2021, andSpecific Initiatives of The Nisshinbo Group

Value Creation

Specific Initiatives of The Nisshinbo Group

Overview of the TCFD Response33Connect Everything, Create Value ｜ Reports Based on the TCFD Recommendations

1. Assess Materiality of Climate-Related Risks

3. Evaluate Business Impacts

As the first step in the scenario-analysis, the Nisshinbo Group identified the material risks and opportunities for each of the targeted businesses

In the scenario analysis, the Nisshinbo Group evaluated the financial impact by business segment. The following is a summary of the impact onusing the TCFD final report and relevant external literature on the industry and other relevant topics. As the impacts of climate change havethe Nisshinbo Group as a whole by scenario.
•Under the global warming progression scenario and while insurance coverage has minimized the impact, a certain amount of costterm as well as medium- to long-term timelines leading up to 2050. Accordingly, the following table indicates significant risks and opportunities

increases will be required to deal with property damage from flooding, sales of products related to EVs, new energy vehicles, smart

associated with business continuity and the creation of new businesses.
：Wireless and Communications：Micro Devices：Automobile Brakes

mobility, and fuel cells, as well as friction materials for brakes, are expected to increase.

：Precision Instruments

Assessment Item
Risk
Risks
Major
Type
Subcategories
categories
Transition Policy andCarbon price ・Increased raw material procurement and
Risks
Legal
manufacturing costs due to carbon taxationMarket andTechnology
ShiftsEnergy mix

Customerand market
changes：Chemicals：Textiles：Real Estate：Others：Business Development Division

Opportunities
・Decrease future operating costs by switching to renewableenergymobility, and fuel cell-related products are expected to increase more than in the global warming scenario, and sales of decarbonizationrelated products and environmentally friendly products are expected to expand, including increased sales of insulation materials due tothe spread of ZEB/ZEH.
In both scenarios, the Business Development Division is expected to see significant potential opportunities, such as increased sales
opportunities for fuel cell-related products, driven by the widespread use of hydrogen infrastructure.

・Increase or decrease in energy costs due tofluctuations in city gas/crude oil/electricity prices
：Wireless and Communications―

・Cost increase due to response to GHG reduction ・Increased demand for related products due to increased demand forrequests from customers
marine transportation as a result of modal shift•In the decarbonization scenario and while the challenge will be to reduce carbon tax costs, sales of EVs, new energy vehicles, smart

Category

・Physical damage and loss of business interruption
due to typhoons and guerrilla rainstormsCustomer and market
changes

Increase in sales of brake friction materials due to change in demand for automobiles

Increase in sales of insulation materials due to the popularization of ZEB/ZEH
Increase in sales of cross-linking agents due to rising demand for cold-drying paints
Increase in sales of machine tools for CFRP materials due to an increase in the number ofcompanies working to reduce GHG emissions
Expand sales of other environmentally oriented and environmentally friendly products and services(Increase sales of products for environment-oriented apparel and environmentally friendly
industrial materials, frozen meals, plant-based meat to reduce food loss, and implement
higher rents for properties with ZEB and energy certifications)
Spread of low-carbon
and energy-saving
technologies

Increase in sales for products related to EVs, new energy vehicles, smart mobility,and fuel cells
Increase in sales of energy-saving GaN power semiconductors and electronic device
related products
Increase in sales of wind power generation related parts
Increase in sales of related parts due to change in demand for ICE vehicles
・Expand opportunities to market products and services that address
long-term changes in disease structure and access to healthcare due
to climate change

Increase sales opportunities for fuel cell-related products as hydrogen infrastructure becomes morewidespread
Average temperaturerise, and Change in
Precipitation andWeather patterns―

Increase in sales for related products due to increased demand for marine transportation
as a result of modal shift
Increase in energy costs due to response to GHG reduction
requests from customers

・Increase in sales of products for heat protection(cool biz, cool sensation, etc.)

：Business Development Division

Assessment of Impacts*1
Warming
Decarbonization
Progression
Scenario
Scenario*2*2

Increase in sales for disaster prevention products and services due to increased flood risk
Increase in sales for air conditioner parts due to more frequent use of air conditioning in summer
Decrease in product costs due to lower raw cotton prices

２. Identify and Define Range of Scenarios
With 2050 as the time axis, the Nisshinbo Group analyzed climate-related risks and opportunities using the warming progression and

Decrease in profit due to higher purchase price costs resulting from lower yields of wheat
and oilseeds; increase in profit due to change in sales strategy

decarbonization scenarios. The following documents were referenced for the analysis.

Increase in sales of clothing for heat protectionWarming Progression Scenario

Expand opportunities to market products and services that address long-term changes in disease
structure and access to healthcare due to climate change

Decarbonization Scenario
Intergovernmental Panel on Climate

International Energy Agency (IEA)

Intergovernmental Panel on Climate

Change (IPCC)

・Net-Zero Emissions Scenario (NZE)

Change (IPCC)

・Reference Technology Scenario (RTS)・RCP8.5

・Sustainable Development Scenario (SDS) ・RCP2.6 or RCP4.5

Note: IEA scenarios are based on the latest data available at the time of analysis for each project, and there might be slight differences in conditions and other factors.

The Nisshinbo Group organized the global view of the warming progression scenario and the decarbonization scenario. In the warming
progressive scenario, while some sites will be affected by flooding and other damage, sales opportunities for countermeasure products andservices as temperatures rise will increase, and demand for disaster prevention-related products and services is expected to rise. In the
decarbonization scenario, countries will tighten emission reduction targets and introduce high carbon taxes, while demand for decarbonizationrelated products and environmentally friendly products, especially EVs/renewable energy, is expected to increase.

Severity of extreme
weather events*3*3

Increased costs due to physical damage and loss of businessinterruption caused by flooding*1 Assessment of Impacts
Degree of Impacts: :Positive Impact/ :Negative Impact:Less than 1 billion yen: / , More than 1 billion yen but less than 5 billion yen:/,More than 5 billion yen but less than 10 billion yen:/, 10 billion yen or more:/(The size of the impact after taking into account the currently assumed countermeasures is described)*2 The size of the impact of the Business Development Division may fluctuate because of future business development and uncertainties of the information and data
used.
*3 The magnitude of the impact of the Medical Equipment business is targeted at products and services related to analyzers for the increasing number of diseases
associated with climate change, telemedicine and medical big data, but the scale of the business may fluctuate because of future business development anduncertainties of the information and data used.
(For business impact assessment details, please see“Information Disclosure Based on TCFD Recommendations”on the Group Sustainability website.)(For global outlook details, please see“Information Disclosure Based on TCFD Recommendations”on the Group Sustainability website.)

35

Data Section

International Energy Agency (IEA)
・Stated Policies Scenario (STEPS)

34

Overview of Business Segments

Severity of
extremeweather
events・Increased demand for air conditioner parts due to more frequent
use of air conditioning in summer：Others

Sustainability

・Increase in demand for disaster prevention products andservices due to increased flood risk

：Real Estate

Assessment Item

Increase in energy costs due to fluctuations in city gas, crude oil, and electricity prices

・Increase sales opportunities for fuel cell-related products as hydrogen
infrastructure becomes more widespread

Acute：Textiles

Energy mix

・Increase in demand for related products due to increase in newoffshore wind power generation

・Increase or decrease in product costs due tofluctuations in raw cotton prices
・Higher purchase price costs due to lower
yields of wheat and oilseeds, and lower
wheat sales volume due to higher costs

：Chemicals

Increased cost of procuring raw materials from suppliers andmanufacturing costs at factories due to carbon taxation

Spread of low- ・Decrease in demand for ICE vehicle parts due to ・Increased demand for products related to EVs, newcarbon andthe spread and expansion of EVs
energy vehicles, smart mobility, and fuel cells
energy-saving ・Sales expansion of energy-saving GaN power semiconductors andtechnologies
electronic device related products

・Increase in disaster response costs andrelocation costs due to storm surge damage：Precision Instruments

Carbon price・Expand sales of other environmentally oriented and environmentallyfriendly products and services (Increase sales of products for environmentoriented apparel and environmentally friendly industrial materials, frozen
meals, plant-based meat to reduce food loss, and implement higher rents
for properties with ZEB and energy certifications)

Averagetemperaturerise, andchange inprecipitation
and weather
patterns：Automobile Brakes

・Increase in sales of insulation materials due to the popularizationof ZEB/ZEH

・Expanding the market for CFRP related products that contributeto low-carbon

Chronic：Micro Devices

・Increase in sales of brake friction materials due to change indemand for automobiles

・Increase in sales of cross-linking agents due to rising demand forcold-drying paints

Physical
Risks

Value Creation

the potential to arise in the medium to long term, risks and opportunities were qualitatively evaluated as“large,”“medium”or“small”on short-Connect Everything, Create Value ｜ Reports Based on the TCFD Recommendations

Connect Everything, Create Value ｜ Human Rights and Human Capital, Safety and Quality

Human Rights and Human Capital, Safety and Quality
4. Identify Potential Responses

Basic Concept

In the future, based on the results of the scenario analysis, all business divisions will minimize risks related to greenhouse gas emissions while

Each and every employee’s ability is key for companies to contribute sustainably to a diverse and global society. We

focusing on capturing the actual and potential opportunities related to the products and services of each business division in the medium to

aim to create a more worker-friendly environment by respecting the character and individuality of each employee andlong term. The Nisshinbo Group has completed scenario analysis for its major businesses in FY2023 and will continue to revise the content as

Business

Common to all
projects

Wireless andCommunications

Micro Devices

Precision
Instruments

Chemicals

Real Estate
Others businessBusiness Development
Division・Risk of incurring additional costs due to the introduction and higher cost of ・Avoidance of carbon tax and reduction of energy costs through GHG reduction/
carbon taxes. In addition, suppliers may increasingly request GHG emission
energy conservation
reductions and be forced to respond to such requests.
・Prevention and mitigation of physical damage and loss of business interruption
・Potential for physical damage and loss of business interruption caused bycaused by flooding
increased flooding
・Increased demand for marine transportation due to modal shift may expand ・Capturing demand for shipping-related products
sales opportunities for ship-related products
・Expand development and manufacturing of EV-related products・Demand for EV-related products may increase due to growth in EV sales
・Application of energy-saving related products (GaN power semiconductors,
・Demand for energy-saving devices may expand and sales opportunities forelectronic device related products, etc.) to the electric power field・Capturing demand for ships to support offshore wind facilities
energy-saving devices may increase
・Development and manufacture of millimeter wave radar water gauge for disaster・Frequent occurrence of natural disasters may increase flood risk, thereby
increasing demand for disaster prevention-related products and services
prevention, capturing demand for disaster prevention products and services
・Potential for increased demand for offshore wind power related products
・Capturing demand for products and services related to analysis of diseases that
due to increased demand for renewable energy
are increasing with climate change
・Expand opportunities to market products and services that address long-term ・Development of products and services for telemedicine and medical big
changes in disease structure and access to healthcare due to climate change data through collaboration of medical devices and wireless/communication
technologies

・Development and manufacture of smart mobility-related products along with the
expansion of the smart mobility society, and enhancement of the related parts
production system
・Development and manufacture of energy-saving products to respond to demand
for low-carbon and energy-efficient products
・Capturing demand for water gauge sensors to address increased flood risk

・Although demand for brake friction materials is expected to increase due to・ Providing products and services that comply with the changes and regulations
rising demand for automobiles, the longer service life of brake friction materials associated with the promotion of decarbonization
may reduce demand for brake repairs as the percentage of EVs increases
・Increasing environment-oriented in the supply chain may expand sales
opportunities for machine tools for CFRP materials
・Demand for wind-related products may increase as the introduction ofrenewable energy increases
・Sales opportunities for new energy vehicle-related products may increase
due to growth in EV sales, while sales opportunities for ICE vehicle-related
products may shrink
・Increased demand for air conditioners due to global warming may expand
sales opportunities for related products
・Potential for increased demand for cross-linking agents due to expanded
use of low-temperature drying paints
・Potential for demand for insulation materials for building materials toincrease due to the spread of ZEB/ZEH
・Potential for sales of fuel cell bipolar plates to grow in proportion to the
expansion of the fuel cell market

・Changes in environment-oriented in the supply chain may expand
opportunities to sell to more environment-oriented customers and to sell
environmentally friendly products
・Fluctuations in raw cotton costs due to climate change, but also thepossibility of increased sales opportunities for products of heat-related
protection due to rising temperatures
・Implement higher rents for properties with ZEB and energy certifications

・Capturing sales opportunities for machine tools for CFRP materials to respond to
the environmental needs of the supply chain
・Development and manufacture of wind power generation related products
along with expansion of renewable energy introduction
・Development and manufacture of parts processing and assembly-only machine
related to new energy vehicles as EV sales increase
・Development and manufacture of air conditioning parts to meet the growing
demand for air conditioning during the summer season
・Capturing demand for cross-linking agents due to increased demand for lowtemperature drying paints
・Capturing demand for heat insulating materials due to the spread of ZEB/ZEH
・Capturing demand for fuel cell bipolar plates due to the spread of fuel cells
・Providing products and services that comply with the changes and regulations
associated with the promotion of decarbonization
・Capturing demand for products for apparel to promote decarbonization, anddevelopment and manufacture of environmentally friendly industrial materials
・Development and manufacture of clothing for heat protection

・Capturing demand through operation of environmentally friendly properties

・Higher purchase price costs due to lower yields of wheat and oilseeds, and ・Price pass-through and other measures to deal with increased oil and fat
lower wheat sales volume due to higher costs
procurement costs
・Increase sales of frozen meals and plant-based meat to reduce food loss
・Capturing demand by procuring and selling environmentally friendly food products

・Potential for growth in sales of fuel cell-related products in proportion to・Capturing opportunities through the development and enhancement of fuel cellthe expansion in the size of the fuel cell market against the backdrop of the related product development and manufacturing systems
spread of hydrogen infrastructure
・ Research and development of hydrogen infrastructure-related products

Risk Management
analyzed and evaluated in each business based on the Risk Management Rules. The persons in charge of each business prioritize risks andhypothesize the magnitude of their impacts on business and future scenarios. This information is comprehensively mapped at the Corporate
Strategy Center and deliberated by the Corporate Strategy Conference and the Board of Directors.

Indicators and Targets

are aiming for carbon neutrality by 2050 and proactively promoting climatechange countermeasures such as energy conservation activities and reduced
perfluorocarbon (PFC)* emissions.
*Perfluorocarbon is a fluorine-based greenhouse gas used for dry etching in thesemiconductor manufacturing process.

specific guidelines for behavior that all employees must observe.

Target for 2024 (The 5th Three-Year Environmental Target)
Reduce greenhouse gas emissions by 35% or morecompared to fiscal 2014
Target for 2030 (The Medium-Term Environmental Target)
Reduce greenhouse gas emissions by 50% or morecompared to fiscal 2014
Target for 2050 (The Long-Term Environmental Target)
Aim to be Carbon Neutral

rights due diligence initiatives.
In order to understand the current status of the institutional

The first item in the Action Guidelines is "Respect for Human Rights.”

aspects that form the basis for implementing human rights due

Furthermore, the Group takes seriously its responsibility to protect

diligence at each Group company and to link this to corrective

human rights as a corporation and thus established the Nisshinbo

measures, the Group conducted the Human Rights Due Diligence

Group Human Rights Statement, which expresses the desire to

Questionnaire: Basic 2023 survey of 81 companies in Japan andrespect human rights in words as the Group's management stance.

overseas to determine basic responses, including institutional

Nisshinbo Group defines human rights as "the rights of people

development and operation, awareness-raising, and the appropriate

to live fulfilling lives based on their own diverse choices.”The Groupmeasures regarding human rights issues. Basic 2023 was developed

believes that companies have a responsibility to ensure that people(100% response rate). This survey also examines the actual status ofhave the opportunity to make choices to achieve the happiness theyeach company's initiatives and responses by identifying issues thatdesire. By providing products, technologies, and services that protect

may lead to human rights risks and examining future initiatives.

people's safe and secure living environment, the Group aims torealize the well-being of society in which people, including Nisshinbo
Group, and especially children who will live in the future, can lead
happy and fulfilling lives. Specifically, we are promoting human rights
awareness activities and initiatives related to business and humanrights. We have set the following KPIs as targets for these initiatives
and are moving forward with various activities.
Quantitative Targets
FY2023 Results・ (Japan) Group human rights training: 100%
(Overseas) Human rights education and training
・ Formulate human rights policy, introduce andpromote human rights due diligence in areas
with high human rights risks▶ Please see below for details regarding the Nisshinbo Group
Human Rights Policy.
https://www.nisshinbo.co.jp/english/sustainability/human-rights/
statement.html▶ Please see below for details regarding the Nisshinbo Grouphuman rights due diligence.
https://www.nisshinbo.co.jp/english/sustainability/human-rights/
duediligence.html

97％

A video message from the president was distributed to
employees to inform them of and help them understand theformulation of the Group Human Rights Policy, as well as thehuman rights policy. In addition, Nisshinbo Group provided humanrights training not only for new employees but also for career
employees throughout the year to deepen their understanding ofrespect for human rights as the common will of the Group. Also, theGroup conducted a survey of 81 domestic and overseas companies
as part of its human rights policy formulation and human rights due

For more detailed information, please visit the Sustainability section of the Nisshinbo Group website.
https://www.nisshinbo.co.jp/english/sustainability/36

established a human rights policy for 2023 and is promoting human

The Nisshinbo Group's Business Conduct Guidelines are a set of

diligence activities.
In addition, the“Nisshinbo Group Sustainable Procurement Basic
Policy”and the“Sustainable Procurement Guidelines”used by Group
companies clearly indicate the prohibition of forced labor and childlabor, and ensure respect for human rights throughout the supply chain.

Conduct Human Rights Due Diligence

Human Resource Acquisition andDevelopment
The Nisshinbo Group is working to acquire and develop humanresources with a focus on future business developments based onthe“business is people”human resources policy and Nisshinbo
Group Human Resources Strategy. Specifically, this entails thedevelopment of management candidates necessary for businesspromotion and stronger efforts to recruit mid-career employees torectify the employee age imbalance.
We have established the following KPIs as targets for these
initiatives and are promoting activities accordingly.
・ Increase the participation rate of senior management posts(executive officers or above) in the future leader program・ Strengthen efforts to recruit mid-career employees to rectify
the employee age imbalance
Regarding future business leader development programs, for general

Data Sectionchange while mitigating risks. To mitigate climate change–related risks, we

Respect for Human Rights

background, thoughts, and goals behind the formulation of theRegarding risks and opportunities related to climate change to which the Group should pay attention, risks are unambiguously ascertained,

The Nisshinbo Group aims to seize business opportunities related to climate

occupational injuries, and promotes quality assurance activities to improve customer satisfaction.

Overview of Business Segments

TextilesDirection of Responses

Sustainability

Automobile
Brakeshiring, and promote a work-life balance. Nisshinbo also engages in safety and health activities with the goal of eliminating

Outline of Business Impacts

・Potential increase in sales of smart mobility-related products due to social
developments toward a smart mobility society
・Potential for increased demand for low-carbon and energy-saving products
・Frequent occurrence of natural disasters may increase flood risk, thereby
increasing demand for disaster prevention-related products

placing the right people in the right jobs. To this end, we respect diversity in all respects, including human rights andValue Creation

appropriate based on changes in the business environment.

managers and above, the Nisshinbo Group provides cross-industrial
exchange training within the Group, including management mindset
training to acquire a mindset appropriate for management positions;selective external training to acquire management knowledge,
mindset, and role behavior; and practical workshops to acquire theIn order to fulfill the "corporate responsibility to respect humanability to create and breakthrough in business. Furthermore, since

rights" required by the "Guiding Principles on Business and Human

FY2020, Nisshinbo dispatched several participants to the Management

Rights" adopted by the United Nations, the Nisshinbo Groupof Technology (MOT) in order to develop managerial human resources37

Connect Everything, Create Value ｜ Human Rights and Human Capital, Safety and Qualitythat combine technical knowledge and management skills. As a result

The Group is also expanding the Learning Management Systemof these efforts, more than 50% of the participants in this program

menu, which allows employees to take courses anytime, anywhere,

have been appointed to managing officer or higher positions.

on a wide variety of learning subjects.

Total Number of Participants in the Senior Management
Succession Planning Program (2015-2024)

Digital Human Resource Development

Number ofParticipants

Course Title / Outline

・Executive Management Program (GLOBIS)
・Advanced Management Seminar (KeioBusiness School)28

・Executive Business Leader Course(Japan Management Association)
・Senior Management Course (Waseda
Business School)
Selective
External
Training

・MUFG Business School (Mitsubishi UFJ
Research and Consulting)3

・Financial Leadership Programs(Hitotsubashi University)

11

The Nisshinbo Group's mission is to contribute to society throughwith Disabilities and Seniors

business activities , and the Group aims to provide solutions to the

Aiming for a work environment where everyone, regardless ofchallenges facing human society by transforming its corporate culture

disabilities, respects diversity and can work with enthusiasm, the

The Nisshinbo Group promotes the cultivation of human resources

into one that is open-minded and where the wisdom of a diverse

Nisshinbo Group targets a 100% employment rate of persons

with digital skills. In fiscal 2023, we expanded digital-related

range of people can come together. As a means to achieve this,with disabilities (ratio of achieving companies) at domestic Groupe-learning courses from five to 21 offerings, updated“digital

Nisshinbo Group has positioned diversity and inclusion as a startercompanies with 43.5 or more employees.

basic training”for new employees, and systematized it as“digitalfor innovation and is promoting activities to foster an organizational

literacy training.”The program provides a forum for sharing goodclimate that recognizes, accepts, and respects differences and allows

examples of internal digital-related activities and discussing businesspeople to take advantage of each other's strengths. To promote

Nisshinbo Holdings Inc., has a reemployment system in place for

improvement plans and new digital business ideas using digital

D&I, we formulated the following targets and KPIs, and are taking

employees who reach the mandatory retirement age of 60, as a measuretechnology across workplaces.

measures to spread awareness of D&I throughout the Group, ensure

to support the active participation of seniors until the age of 65.

In addition, since 2023, Nisshinbo has been conducting training

human resources, and ensure psychological safety, which is thethe aim of developing human resources who can utilize digital

cornerstone of D&I.

・Graduate School of Business
Administration (MBA) Program (Graduate
School of Keio University)

1

Practical
・Acquisition of the ability to create andWorkshops
breakthrough in business (SANNO University)

71

Total

124

In order to correct the age structure of the workforce, theGroup is reinforcing the number of career hires in addition to
new graduates. In order to ensure diversity, the Group is actively
recruiting women and non-Japanese employees in particular. In
and promote excellent career hires.
① Maintain competitive salary levels② Role grading system to clarify job descriptions③ Personnel system that enables early promotion regardless oflength of service④ A multitrack personnel system that accommodates different
work styles and occupational perspectives⑤ Improvement of working environment, such as teleworking
system and satellite offices⑥ Enhancement of training and follow-up for career hires⑦ Employee referral system (referral system) to introduce
employees' acquaintances⑧ Re-entry system for employees who retired for personalreasons (Re-join System)⑨ A system to provide leave and allowances for every five yearsof service (Discovery Leave System)

Career Support

for the use of technology.

The Nisshinbo Group views diversity as a source of innovation and・ Disseminate top management messages and implement
measures contributing to the success of diverse humanresources
Quantitative Targets
FY2023 Results

Engagement
Valuing its relationship with employees, the Nisshinbo Group is
working on“engagement”as a key action item to build good
relationships with employees.
We have established the following KPI as a target for these
initiatives and are promoting activities accordingly.

・ Women among overall hires*
Mid-career: Managers:
New graduates: Clerical positions:Technical positions:・ Mid-career hires among management:*(end of fiscal 2024 target)

・ Continue implementing the global survey
Quantitative Targets
FY2023 Results

・ Promote the practice of the Group's Corporate
Affirmation
Philosophy, VALUE, and Business Conduct Guidelines rate in Japan(Affirmation rate in global survey, 80% or more)
68%
The Nisshinbo Group has conducted an annual survey of its

50%
50%
20%
11%

25%
50%
23%
15%

Note: Targeting mid-career hires equal to the ratio of mid-career hires among
all full-time employees by 2030.

・ Female manager ratio* (end of fiscal 2024 target):Work-style Reforms

6%

7.4%

Note: All domestic Group companies are targeting a female manager ratio of
10% or more in FY2030.

・ Participation in psychological safety training: 100%

99.6%

*KPI for Nissinbo Holdings Inc.

In order to close the gender gap, Nisshinbo introduced theFemale Leader Development Program in FY2023. Training was held

strives to enhance corporate value by leveraging its strengths indiversity of business, diversity of people, and diversity of values. The
Group promotes reforms in the way everyone works so that the
Nisshinbo Group can respect diversity and utilize the individuality
and abilities of each employee to improve productivity, make work
rewarding, and enable employees to continue to play an active role,
which will in turn lead to a strong competitive edge. Specifically,
we are working to create a workplace environment in which all
employees can work comfortably.
We have established the following KPIs as targets for these
initiatives and are promoting activities accordingly.
Quantitative Targets
FY2023 Results

・ Annual paid leave utilization: More than 70%
・ Male employees utilizing childcare leave among
all male employees: More than 30%

71％
100％

Note: KPIs are for Nisshinbo Holdings Inc.

In consideration of childcare, nursing care, and the various

employees since 2018. In FY2023, the number of target companies

for management candidates and the next generation to further

was expanded to all domestic group companies (34) and 42

improve their mindsets, examine careers with reference to leadership

constraints faced by employees, Nisshinbo Group has establishedoverseas for a total of 76 companies. With 17,632 participants,

and role models, and form networks among women. Regarding

various systems to enable employees with diverse backgrounds to

the response rate was 94%, an extremely high response rate for a

psychological safety, the Nisshinbo Group is promoting penetration

work productively and energetically. The Nisshinbo Group instituted

global survey. The results were generally healthy, with 7 out of 15

activities by conducting ongoing training using case studies.

teleworking in 2021 and has opened satellite offices. We have also

categories reaching the level of no major problems, 4 categories

Promotion of Women's Activities

requiring further monitoring, and 4 categories requiring attention.
The cycle of analyzing the result data, clarifying and implementing
priority measures, and then conducting a fixed-point observation ofchanges in scores in the following year's survey is repeated.

Practice the Group's Corporate Philosophy

Nisshinbo Holdings Inc. has formulated a general businessowner action plan based on the Law for the Promotion of
Women's Activities, and each company has set specific targets
and achievement periods, mainly for the number of women in
management positions and the ratio of female employees. Similar

established staggered start times, flextime, hourly paid leave in hourly
increments, and shorter workdays. Furthermore, we formulated the“General Business Owner Action Plan”to support an environment
enabling men to easily utilize childcare leave. In FY2023, Nisshinbo
Group publicized the systems related to men's childcare leave on
its in-house portal site and interviewed men who had experience inchildcare at Nisshinbo Holdings Inc. and Nisshinbo Mechatronics Inc.

To put the Group Corporate Philosophy into practice, the Nisshinbo

initiatives are being implemented at 20 Group companies in JapanThe Group provides career training for each generation as anGroup disseminates management messages based on the Groupother than the Company.

Group manages the status of overtime work through the department

opportunity for each employee to regularly reflect on the individual

Corporate Philosophy.

General Action Plans

in charge of personnel affairs and the Health Committee. In order to

The corporate philosophy education video that was deployed

As opportunities to take on new career challenges, theto all Group companies in FY2023 shows how the Group Corporate

Nisshinbo Group has the New Challenge System, which allows all

Philosophy, VALUE, and Business Conduct Guidelines lead to business

Nisshinbo Group employees to take on the challenge of transferring

policies, management plans, and annual slogans, which in turn leadto a position they are aiming for and a self-assessment system. In

to management plans for each company, as well as goals for each

addition, the Group has a mentoring system and career interviews

workplace and individual. The content of the document includes theas a mechanism to support employee growth.

importance of each individual sincerely fulfilling individual roles.

38

To prevent long working hours and overwork, the Nisshinbo(Planning period: January 1, 2022, to March 31, 2026)

improve operational efficiency, the Group is reviewing operations

Goal 1: T he proportion of females in the total number ofto eliminate unnecessary work and leveling operations to avoid

clerical professionals is to be more than 50%.
Goal 2: T he number of women in supervisory roles will be
more than twice as many as that in fiscal 2021.
Goal 3: Take at least 70% of annual paid leave.

concentration of work on specific persons.

For more information, please see the Sustainability
section of the Nisshinbo Group website.
https://www.nisshinbo.co.jp/english/sustainability/

39

Data Section

career and to reconsider career aspirations.

Overview of Business Segments

addition, the following measures are being implemented to attract

various problem-solving approaches and thinking methods required

In fiscal 2023, all Group companies in Japan achieved thetargeted employment ratio of people with disabilities.

Sustainability

10

human resource diversity, promote the active participation of diverse

on problem-solving methods in the age of digital technology withtechnology to solve problems at their workplaces, where they learn

・Department of Management ofTechnology (MOT) Program (Graduate
School of Management, Tokyo Universityof Science, etc.)

Supporting the Active Participation of People

Value Creation

Program

Promotion Activities for Diversity & Inclusion

Connect Everything, Create Value ｜ Human Rights and Human Capital, Safety and Quality

Connect Everything, Create Value ｜ Supply Chain Management

Supply Chain Management
Safety and Health Activities

health management efforts across the Group, Nisshinbo established

The Nisshinbo Group shares the Business Conduct Guidelines“Safety
Is the Basis for Everything”with all employees and promotes healthand safety activities with the aim of maintaining and improving safe
outside Japan.
We have established the following KPI as a target for these
initiatives and are promoting activities accordingly.

Group company and is tasked with coordinating the Group’sactivities. Specifically, the meeting focuses on activities in three
key areas ー personal health, organizational health and safety
awareness ー to ensure all employees are fully aware of their safety

initiatives and are promoting activities accordingly.

0 cases

In FY2023, to maintain zero workplace accidents, we utilizedrisk assessments when introducing new machinery, equipment, andnew chemical substances, as well as when making major changes
in work content, and promoted measures to reduce major risks.

76%
95%

In FY2023, as in FY2022, based on the concept of "protecting
the health of workplaces and employees and enhancing productivity

for autonomous chemical substance management at each businessthrough health management measures," the following activities werelocation. To improve risk sensitivity, we increased each employee's

promoted.

prediction training and hiyari-hatto (near-miss) reporting activities.
In addition to training conducted at each business office for newhires and employees changing work content, we strive to increasesafety awareness among all employees through skill-enhancing
education for safety and health workers, danger awareness training,
5S activities (sort, set in order, shine, standardize and sustain) andsmall group activities that include danger experience education.

Occurrence of Occupational Injuries① Improvement of the ratio of employees found to havelifestyle-related diseases② Reduction of overall health risks through stress checks③ Prepare health management reports that quantify the healthstatus of employees④ Industrial health personnel from group companies coordinate
to conduct health awareness activities
Continuing on from fiscal 2021, in fiscal 2023 Nisshinbo wasagain certified as a Health & Productivity Management Outstanding
Organization 2024: Large Enterprise Category, as well as a Healthfor sustainable transactions throughout the supply chain.
Further, we established the Nisshinbo Group Sustainable Procurement Basic Policy in 2015, from the perspectives ofWe revised this policy in 2024, and formulated the Nisshinbo Group Sustainable Procurement Guidelines.
refer to the following.
Promoting Responsible Supply Chains https://www.nisshinbo.co.jp/english/sustainability/fair_trade.html

Promoting Sustainable Procurement
Having positioned sustainable procurement as a key aspect of our sustainability promotion plan, we formulated a three-year initiative (FY2022–24)
that is being promoted across the entire Group.
Targets・KPI

Quantitative Targets
FY2023 Results

Improving sustainable procurement incollaboration with suppliers

Evaluation of improvement efforts based on the results of the sustainable
survey to major suppliers (more than 80% of transaction amount), 100%

Activities as planned

Implementation of global initiatives[Qualitative Target] Consideration and implementation of deployment
methods to the supply chain at overseas business connection andcritical overseas locations

Expanding internal awareness-raising activities

Implementation rate of training for purchasing staff (annual theme), 100%

The Nisshinbo Group’s Initiatives

46%

In FY2023, the Group focused on the global expansion of sustainable procurement initiatives as a major pillar of activities. In addition
to regular meetings of purchasing managers in July and December, meetings were held every month from August onward to check theimplementation status of sustainable procurement at overseas offices of group companies and to discuss methods for global deployment. In the
future, Nisshinbo plans to conduct questionnaires and feedback to suppliers at overseas business sites as it did in Japan.

and Medium-Sized Enterprise Category.

Implementation of Sustainable Procurement Survey and Improvement Activities

of occupational accidents, worsened compared to FY2022 for the

Increasing Quality and Customer Satisfaction

In order to confirm the status of our sustainable procurement initiatives, Nisshinbo Group companies in Japan have been conducting a

Japan group as a whole, but remained at a favorable level compared

To provide products and services that satisfy customers, Nisshinbo

to the Japanese manufacturing industry.

Group manufacturing and quality assurance divisions in each* Frequency of injuries with lost work days: an index of the frequency ofbusiness promote activities to improve the quality and customer

accidents (classified as grade 1 to 7 death or disabilities). The
frequency rate of lost time injuries,* which represents the frequency

injuries with lost work days. Expressed as the number of work-related
fatalities and injuries per 1 million total working hours.

We have established the following KPIs as targets for these

Frequency of Injuries with Lost Workdays
Nisshinbo Group (Japan)
1.5

initiatives and are promoting activities accordingly.

Average for Japanesemanufacturing industry

1.2

・ Ascertain and share the status of quality
complaints from each segment

0.6
0.3

2020

2021

2022

2023

Health Management

Japan and overseas
0 casesIn fiscal 2023, there were no product liability (PL) law violationsin the Nisshinbo Group. As the determination of claims and complaints
varies by industry and type of business, we confirm the status ofeach Nisshinbo Group company annually. No companies have seen

The Nisshinbo Group considers the promotion of healthcontinuous increases in the number of complaints over the last threemanagement to be "the goal of becoming a corporate group thatyears. Complaints are trending downward at all Group companies.

continues to be needed by society through the creation of anenvironment in which each and every employee can play an activerole by promoting the health of employees and the organization,"and each group company is engaged in such activities. To promote

40

Sustainable Procurement has been disseminated to suppliers.
The scope of the survey for FY2023 was expanded from 70% of the scope of FY2022 to include suppliers covering 80% of the transaction
value of each core company. Many of the suppliers who have been surveyed and provided feedback multiple times so far have seen theirevaluation points increase. New suppliers tended to receive relatively lower points. Nisshinbo is promoting sustainable procurement by informing

For more information, please see the Sustainability
section of the Nisshinbo Group website.
https://www.nisshinbo.co.jp/english/sustainability/

In FY2024, in addition to globalization, the Group plans to revise the content of the questionnaire to comply with the Nisshinbo Group's
Sustainable Procurement Guidelines since the requirements of companies in sustainable procurement are constantly changing.

Implementation of Training for Purchasing Managers
In FY2023, Nisshinbo conducted in-house training on Subcontract Act-related matters for purchasing staff of Nisshinbo Group companies in Japan.
The Group considers an understanding of the Subcontract Act to Subcontractors as essential for those involved in purchasing operations, andNisshinbo strives to maintain appropriate transactions by repeatedly providing training to those in charge of purchasing, including recent cases.

Data Section

2019

suppliers for their use in improvement activities toward sustainable procurement. Through these activities, the Nisshinbo Group Basic Policy forsuppliers of the survey results and asking them to use the results for improvement.
Quantitative Targets
FY2023 Results

・ Product liability law violations: 0 incidents

0.9

0.0

satisfaction demanded of each product.

questionnaire survey of major suppliers in Japan and providing feedback on the results since 2017. The results of the survey are fed back to

Overview of Business Segments& Productivity Management Outstanding Organization 2024: SmallIn FY2023, the Nisshinbo Group had no serious occupational

corporate ethics, and that the Group will respect its suppliers as equal partners through sound business relationships, aiming

Sustainability

To enhance preventive safety efforts, we re-established a systemsensitivity to danger by improving communication through hazard

Business Practices," stipulates that the Group will always act fairly and with integrity in a wide range of social rules and▶For details regarding the Nisshinbo Group Sustainable Procurement Basic Policy and Nisshinbo Group Sustainable Procurement Guidelines, please
Quantitative Targets
FY2023 Results

・ Employees receiving full medical examinations
after periodic health checkups: More than 85%
・ High-risk individuals receiving health guidance: 100%

The Nisshinbo Group's Business Conduct Guidelines, which includes "Thorough-Going Compliance" and "Fair and Transparent

legal compliance, fair trade, information security, environment protection, human rights, safety & health, and quality & safety.

obligations.
We have established the following KPIs as targets for these

Quantitative Targets
FY2023 Results

・ Major workplace accidents: 0 incidents

attended by health management department leaders from each

Basic Concept

Value Creationand supportive working environments at all business sites within and

the Group Health Management Department Meeting, which is

Declaration to Build Partnerships and Compliance with the Subcontract Act
Nisshinbo Holdings Inc. has issued its Declaration to Build Partnerships for 2020, and is promoting collaboration with suppliers. In March 2024,
Nisshinbo Micro Devices Inc. issued its Declaration to Build Partnerships.
Note: D eclaration to Build Partnerships: A mechanism established by the Council for Promoting Partnership Building for
the Future, whose members include the Cabinet Office and other relevant government ministries, Keidanren, andother economic organizations. This is a declaration of our commitment to working with suppliers in the supply
chain to achieve coexistence and co-prosperity, and compliance with desirable business practices between parent
companies and subcontractors (the Promotion Standards based on the Law for the Promotion of Small and Mediumsized Subcontractors) to prevent unfair assignment on trade terms and conditions to subcontractors.

41

Connect Everything, Create Value ｜ Outside Director Message

The evaluation of Nisshinbo in the capital markets
issues such as productivity

Richard Dyck
Director (Outside Director)

been in office for one year, the outside directors have alreadyresponsibilities of the Board of Directors.

established good teamwork and are discussing various waysof improving P/B ratio among other topics.

Nisshinbo Holdings Valuation andChallenges

In the same way that the shareholder compositionof Japanese companies has become closer to that of U.S.
companies, the separation of management execution andsupervision has advanced, and governance structures,Japanese companies, accepted directors on the executive

Nisshinbo is well-balanced in terms of the respective skills andsuch as nomination and compensation committees, haveside from financial institutions, and corporate shareholders,gender diversity of outside directors. In contrast, Nisshinbo

been incorporated into the institutional design of Japanese

mainly banks, were also listed among the major shareholders.

executive directors and officers are currently exclusively

companies. Going forward, the issue we face involves theAt that time, banks were focused on a company's ability to

male. In Nisshinbo's plants during the Meiji and Taisho era,

nature of the Nomination Committee. In the U.S., CEOrepay loans, and compared to today, corporate management

management positions were held by men, but it was thereappointments or new CEO nominations are the duty

was not as strongly focused on the stock market in terms of

power of women that supported production floors. It isof outside directors. Nisshinbo considers the selection of

cost of equity and return on capital.

important to accelerate the pace of transformation into a

candidates for the future management positions and thecompany where women can fully demonstrate their abilities,

preparation of succession plans as an important part of thepast two decades since 2000. Given the declining population,and to further promote the appointment of women to

duty of outside directors, and I would like to discuss this issue

an increasing number of Japanese companies have globalized

executive and managerial positions.

further.

their operations and expanded to overseas markets

One other issue is improving the P/B ratio. Nisshinbo,

Enhancing Corporate Value

My involvement with the Nisshinbo Group began during mymarket, and the ratio of foreign shareholders has increased

market have P/B ratios below 1x. Only about 5% of U.S.

approximately 20 years working for a semiconductor-related

accordingly. The roles and responsibilities of directors arecompanies in the S&P 500 have P/B ratios below 1x. In Japan,

In fiscal 2023, Hitachi Kokusai Electric became part ofcompany, when I frequently visited an important customer,changing with the need for management to become morewhich was affected by the collapse of the bubble economy,

the Nisshinbo Group. In the areas of 5G and radar, along

New Japan Radio Co., Ltd. (now Nisshinbo Micro Devices

aware of the stock market and with the substantial changes inthe experience may have led to an emphasis on contingency

with Japan Radio, Hitachi Kokusai Electric possessesInc.). That being said, I did not have a deep understanding of

the composition of our shareholders.

preparedness and a consideration of financial security rather

highly competitive seed technologies. I believe that firmly

than asset efficiency. Although the reasons for this may varylinking these seeds to economic value is also important

Outside Directors/Board of Directors Duties

from company to company, Nisshinbo has relatively low profit

from the perspective of enhancing corporate value. In themargins, and the share price after the announcement of oursemiconductor industry, which is a growth market, Nisshinbo’s

The role of an outside director, to whom minority shareholders

medium-term management plan did not increase, indicating

Micro Devices business faces an uphill battle, as its profitof Nisshinbo that I purchased at a used bookstore. I foundhave entrusted management, includes increasing thethat our shares are not highly valued. Thus improving ourlevel is lower than that of foreign companies of similar size.

this book extremely interesting, because it covers in detail thetransparency of financial reports presented by the company

low P/B ratio will continue to be an issue for the foreseeable

To compete on a global level in terms of marketing andfirst 60 years of the 120 year history of the Nisshinbo Group,

to shareholders, and to closely monitor and supervise

future. The“B”in P/B ratio refers to fixed assets such ascompetitiveness, Nisshinbo must make investments. We must

especially the early years after our founding in 1907. I was

executive side operations. Upon my appointment to the Board

inventory, manufacturing facilities, and working capital. By

also analyze the factors behind low gross profit margins, suchgreatly impressed by the role Nisshinbo played in the history

of Directors, I first acquired company shares through the

improving the productivity of these“Bs,”I believe Nisshinbo

as whether productivity is a problem or whether sales prices

of Japan's economic development, as well as the management

shareholding association.

can further enhance its valuation in the stock market.

are too low, and take measures to improve profit margins.

work they were engaged in. Accordingly, prior to assuming
the position of outside director in March 2023, I carefully read

Nisshinbo’s Sixty-Year History (published in 1969), a history

Improving profitability and productivity are always at theand U.S. companies in terms of the operation of the Boardof our human resources and expand diversity throughout thecenter of Board meeting discussions. I have been involvedof Directors. Most Japanese companies hold monthly

organization, while strengthening our response to private andin the medium-term management plan from the formulation

Board meetings that run for several hours, while in the U.S.,

public sector demand and enhancing our strengths based

stage, and I think there are many steps that can be taken bycorporate governance has changed in accord with thecompanies generally hold quarterly Board meetings which run

on global standards. As the Nisshinbo Group has always

utilizing DX for operations such as inventory management

development of the Japanese economy. When the company

over a two- to three-day period to coincide with the timing

responded flexibly to the changing times, I believe there

and productivity improvements. While I have focused on thewas founded, most of our shareholders were individualof quarterly earnings reports. Audit Committees, under theis great potential for the company to transform itself andchallenges Nisshinbo faces with regard to enhancing corporateshareholders—in other words, capitalists. The aforementioned

chairmanship of a certified public accountant, also spendcompete on a global scale through these initiatives.

value, we also face challenges in terms of opportunities for

Mr. Miyajima promoted management such that retained

at least a full day conducting detailed financial statement

earnings were allocated to growth, such as the establishment

audits, and submit audit reports in the presence of attorneys

into one of the best companies in the spinning industry during
the tumultuous period before and after World War II.
At the same time, I want to affirm that Nisshinbo

further growth.

Governance Advancement Challengesof plants in Kawagoe, Hamamatsu, and Qingdao, China.

and external auditing firms. Regardless of how a company

In the postwar controlled economy, borrowings were theoperates, whether in Japan or the U.S., the key is to minimize

Since the pandemic, Nisshinbo Board of Directors meetings

the critical information gap between insiders and outsiders, so

are, in principle, held online, but outside directors have regularmain means of corporate financing, so Nisshinbo, like other42

Nisshinbo’s senior management, along with the IR team,will proactively communicate with capital markets to firmly
convey our growth story and enhance corporate value.

43

Data Section

There are also significant differences between Japan

We will increase the knowledge and management skills

skills of the late Seijiro Miyajima, who developed Nisshinbo

Overview of Business Segments

offering greater growth potential compared to the domestic

and about half the other companies listed on the TSE Primethe various businesses under the Nisshinbo Holdings and theSustainability

With regard to Board of Directors composition, I feelCorporate governance has changed dramatically in the

Nisshinbo and Corporate Governance inTransition

opportunities for face-to-face discussions. Although I have only

relationship with its shareholders. I believe this is one of theValue Creation

is linked to our ability to improve operationalthat the company can maintain an arms-length, equal balanceConnect Everything, Create Value ｜ Dialogues with Shareholders and Investors

Dialogues with Shareholders and Investors
Dialogues Held and Main Participants

Q

A● Results briefings (semiannual): President and directors (business segment representatives, CFO)

What are the leading
indicators of businessperformance?

Many of our businesses are part of the automobile-related supply
chain, including Automobile Brakes and in-vehicle Wireless andCommunications equipment, semiconductors, and Precision
Instruments, and there is a high correlation between global automobile
production and Nisshinbo’s performance. In addition, around two-thirdsof the destinations for Micro Devices products are consumer products
such as smartphones and PCs, as well as various industrial equipment
including handling robots, so it is also useful to refer to supply anddemand conditions in those areas.

What are the strengthsof the Wireless andCommunications
business?

One of its strengths is telemetering systems that automaticallymeasure water levels in dams and rivers, precipitation in watersheds
and a variety of other remote data, collected automatically via wirelesslines and other means. Nisshinbo has been involved in this field sincethe 1950s, and as a leading telemeter company, currently holds
approximately 30% of the water and river information system market.

What synergies will you
achieve with Hitachi
Kokusai Electric, andwhen do you expect torealize them?

The Hitachi Kokusai Electric Group specializes in AI image recognition
technologies, while the Japan Radio Group specializes in information
processing technologies, and these two groups intend to provide
total solutions that combine these specialties, with the manufacturing,development, and indirect departments of each company involved in
the discussions. We hope to compile a report on specific synergies by
the end of the year, and present concrete strategies.

Will the increase in the
defense budget be a
tailwind for the Wireless
and Communications
business?

Annual sales to the Ministry of Defense are approximately ¥20 billion
for Japan Radio and approximately ¥10 billion for Hitachi Kokusai
Electric. These sales are expected to be the driving force behind our
performance in the medium-term plan, with improved profit margins inline with the budget increase and new orders.

What are the strengthsof the Micro Devices
business?

Strengths include signal processing ICs, such as sensor products, themarket for which is expanding, and power supply control ICs, which
are increasingly required to achieve low power consumption. Nisshinbo
can provide analog solutions combining multiple functions.

How does the spreadof EVs impact the
Automobile Brakes
business?

We do not expect installation in new vehicles to disappear due toreliability and other factors. Furthermore, EVs are about 30% heavier
than conventional vehicles, so the friction materials used are also
larger than in conventional vehicles. At the same time, the use ofregenerative braking reduces the frequency of physical braking, so thereplacement cycle of friction materials is expected to lengthen.

What is the future
outlook for the Real
Estate business?

The Real Estate business has been engaged in the leasing and sales ofproperties through the redevelopment of idle domestic plant sites, but
we have changed this policy to improve asset efficiency. We increase
the value of properties before selling them. As a result, the Real Estatebusiness is expected to generate operating income of over ¥10 billion
in 2024 and 2025, and this has been incorporated into the mediumterm plan. We do not expect to sell any properties in fiscal 2026,
when Real Estate operating income is forecast to be approximately ¥1billion.

The P/B ratio is still
below 1x. How will you
respond to the TSE’srequest?

As requested, rather than taking a one-off approach, we will makethorough efforts to achieve a return on capital that exceeds the costof capital on an ongoing basis, and to achieve sustainable growth. To
this end, we must reform our business portfolio. In 2023, we madesignificant progress with the TMD business transfer and the conversionof Hitachi Kokusai Electric into a consolidated subsidiary, but this is
not the end of our efforts. We will continue implementing reforms tofundamentally improve our profit structure.

P.4 Message fromthe President,
PBR Improvement
Measures andShareholder Returns

What is your approachto shareholder returns?

Our basic policy for returning profits to shareholders, after ensuring
sufficient cash for strategic investments, capital expenditures, and R&D
expenses, is to:
1. Provide stable and continuous dividends (targeting a payout ratio of
40% by 2026 compared to the current 30% level), and2. Engage in flexible decision-making with regard to share buybacks
based on capital structure, FCF forecasts, and other factors.

P.4 Message fromthe President,
PBR Improvement
Measures andShareholder Returns● Business briefings (semiannual): Directors (business segment representatives), department senior managers

Shareholder and Investor Details● Japanese institutional investors: 80%; overseas institutional investors: 20%

Main Dialogue Topics● Medium- to long-term business strategies● Business portfolio orientation● Business models, market environments and competitive advantages in each business● Shareholder returns

Frequency

Details

Shareholder, investor and analyst
comments

As necessary

Individual interview summaries reported via e-mail or othermethods

Analyst reports

As necessary

Analyst report summaries reported via e-mail or othermethods

Every six months

Share price trends and volume reported at management
meetings

Share price, shareholder and stockrelated information

Main comments and requests summarized and reported via
e-mail or other methods

All year

Reported as a management review at Board of Director
meetings

Status of IR activities

Overview of Answers to Questions from Shareholders and InvestorsA

Related page

Nisshinbo has manybusinesses, but which
will you focus on going
forward?

The vector of all our business is aligned with the environment. We willcontinue to expand our range of products and services that contributeto reducing environmental impacts. We are specifically positioning the
Wireless and Communications and Micro Devices businesses as driversof growth. The combined sales ratio of both businesses is expected to
be over 60% in fiscal 2026, and over 80% around 2035.

P.14-15 MediumTerm Management
Plan 2026: Our
Target Portfolio

What KPIs are you
focused on over the
medium to long term?

We regard ROE as an important indicator, and in the future we would
like to consistently exceed 10%. We are making efforts to change boththe numerator and denominator when calculating ROE, but basically,
the numerator, or increased profit, is important.
We also calculate WACC and ROIC by business, and will continue tomanage the company with an awareness of return on capital.

P.3 Message from the
President, MediumTerm Management
Plan Positioning:
Three Years ofFoundation Building

How was Medium-Term
Management Plan 2024
received by investors?

Many are skeptical about our ability to achieve these plans, basedon the degree to which we achieved past earnings forecasts. We willcontinue working hard to earn the trust of the market. Some havepointed out that Nisshinbo has not done enough to reform its businessportfolio, but these reforms will not be completed during this mediumterm. We will continue to engage in dialogue with the market in aneffort to be better understood.

44

Data Section

Q

Overview of Business Segments

Quarterly

Sustainability

Feedback to Management

Value Creation● Individual interviews (about 120 times per year): Directors (CFO), IR managers

Related page45

Connect Everything, Create Value ｜ Board of Directors, Audit & Supervisory Board Members andManaging Officers

Board of Directors, Audit & Supervisory Board Members and Managing Officers（As of March 28, 2024）

Board of Directors
Value Creation

President and Representative Director

Masahiro Murakami
Number of Company’s shares held: 85,620 shares
Board of Directors meeting participation:
Attended 17/17 meetings

Takeshi Koarai

Number of Company’s shares held: 11,523 shares
Board of Directors meeting participation:
Attended 17/17 meetings

Naoko Tani

Richard Dyck

Director (Outside Director)

Director (Outside Director)

Number of Company’s shares held: 8,730 shares
Board of Directors meeting participation:
Attended 17/17 meetings

Number of Company’s shares held: 0 shares
Board of Directors meeting participation:
Attended 17/17 meetings

Number of Company’s shares held: 700 shares
Board of Directors meeting participation:
Attended 14/14 meetings*

Number of Company’s shares held: 0 shares
Board of Directors meeting participation:
Attended 14/14 meetings*

Apr. 1981: Joined Ricoh Company, Ltd.
Apr. 2008: General Manager, Imaging System LSI
Development Center, Ricoh Company Ltd.
Apr. 2014: Corporate Associate Advisory
Officer and Deputy General Manager, Electronic
Devices Division of Ricoh Company, Ltd. (served
concurrently)Oct. 2014: Director, Ricoh Electronic Devices Co.,Ltd.
Apr. 2015: Group Executive Officer, Ricoh
Company, Ltd.
President, Ricoh Electronic Devices Co., Ltd.
Jun. 2018: Director of New Japan Radio Co., Ltd.
(currently Nisshinbo Micro
Devices Inc.)
Mar. 2021: Managing Officer of the Company
Jan. 2022: Executive Managing Officer of theCompany
President, Nisshinbo Micro Devices Inc.
Mar. 2022: Director and Executive Managing
Officer of the Company (to the present)
Mar. 2024: Chairperson and Director of Nisshinbo
Micro Devices Inc. (served concurrently, to thepresent)

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 Directorof Semiconductor Portal, Inc. (to the present)
Mar. 2021: Outside Director of theCompany (to the present)

June 1975: Assistant Professor at Harvard University
Sept. 1976: Assistant Professor at The Ohio State
University
Dec. 1976: Chief of Tokyo Representative Office ofGovernment of U.S. State of Ohio
Aug. 1978: North Pacific Sales Manager of Special
Material Business Unit of General Electric Japan Ltd.
Dec. 1982: Representative Director of Teradyne K.K.
Sept. 1988: Vice President of Teradyne, Inc.
Mar. 1999: Representative Director of TCS Japan
K.K.
Sept. 2008: Chairman and Director of Alphana
Technology Co., Ltd.
Feb. 2009: Representative Director of TGK K.K. (tothe present)
Jan. 2010: Director of Mattson Technology, Inc.
Mar. 2013: Representative Director of
Levitronix Japan K.K.
Mar. 2023: Outside Director of the Company (tothe present)*Mar. 2023 Since appointment as director

Apr. 1986: Joined Salomon Brothers Asia Limited
Sept. 1994: Joined Bankers Trust Asia Limited
Jan. 1996: Managing Director, Bankers Trust Asia
LimitedJuly 1999: Joined Deutsche Securities Limited(currently Deutsche Securities Inc.)
Managing Director, Fixed Income Division, Deutsche
Securities Limited
May 2007: Joined UBS Securities Japan Ltd.
(currently UBS Securities Japan Co., Ltd.)Managing Director, Investment Banking Division,
UBS Securities Japan Ltd.
May 2020: Hitotsubashi University Business School,
School of International Corporate Strategy
Visiting Lecturer
Nov. 2022: Hitotsubashi University Business School,
School of International Corporate Strategy
Visiting Associate Professor (to the present)
Mar. 2023: Outside Director of theCompany (to the present)*Mar. 2023 Since appointment as director

Yuki Ikuno

Overview of Business Segments

Apr. 1982: Joined Japan Radio Co., Ltd.
Apr. 2010: General Manager of TechnicalDevelopment Department of Research andDevelopment Headquarters of Japan Radio Co., Ltd.
Apr. 2011: Director of Laboratory of Research andDevelopment Headquarters of Japan Radio Co., Ltd.
Apr. 2012: Executive Officer and General Manager ofResearch and Development Headquarters of Japan
Radio Co., Ltd.
June 2012: Director of Laboratory of Japan Radio
Co., Ltd.
Apr. 2017: Deputy General Manager of Technical
Headquarters of Japan Radio Co., Ltd.
June 2017: Director, Executive Officer, General
Manager of Technical Headquarters, and Executive of
Research and Development of Japan Radio Co., Ltd.
Apr. 2019: General Manager of Technical Development
Headquarters, and Executive of Business Creation ofJapan Radio Co., Ltd.
Mar. 2020: President and Representative Directorof Japan Radio Co., Ltd. (to the present)
Mar. 2021: Director and Senior Executive
Managing Officer of the Company
Mar. 2022: Representative Director and Senior
Executive Managing Officer of the Company(served concurrently, to the present)

Director (Outside Director)

Satoru Taji

Director and Executive Managing Officer

Sustainability

Apr. 1982: Joined the Company
Apr. 2008: Managing Officer, Senior Manager of Corporate
Governance Department of Corporate Strategy Center,
Senior Manager of Human Resources & Administration
Service Department of Business Support Center (served
concurrently) and General Manager of Property Management
Department of the Company (served concurrently)
Apr. 2009: Deputy Chief of Business Support Center(served concurrently), Senior Manager of Corporate
Strategy Department of Corporate Strategy Center(served concurrently) and Senior Manager of Finance,
Accounting & IT Service Department of BusinessSupport Center of the Company (served concurrently)
June 2010: Director, Managing Officer and Chief of BusinessSupport Center of the Company (served concurrently)
Jan. 2012: Responsible for Property Management
Department of the Company (served concurrently)
June 2012: Director, Executive Managing Officer and
Deputy Chief of Corporate Strategy Center of theCompany (served concurrently)
June 2014: Chief of Corporate Strategy Center of theCompany (served concurrently)
June 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
Mar. 2019: President and Representative Director of
the Company (to the present)

Representative Director and Senior Executive
Managing Officer

Audit & Supervisory Board Members

Director and Executive Managing Officer

Director and Managing Officer

Director (Outside Director)

Director (Outside Director)

Audit & Supervisory Board Member

Audit & Supervisory Board Member

Kenichi Morita

Atsushi Yamashita

Outside Audit & Supervisory Board Member

Outside Audit & Supervisory Board Member

Chief of Corporate Strategy Center
Number of Company’s shares held: 20,055 shares
Board of Directors meeting participation:
Attended 17/17 meetings

Deputy Chief of Corporate Strategy Center
Senior Manager of Finance, Accounting & IT
Service Department of Corporate Strategy Center
Number of Company’s shares held: 21,255 shares
Board of Directors meeting participation:
Attended 17/17 meetings

Number of Company’s shares held: 0 shares
Board of Directors meeting participation:
Attended 17/17 meetings

Number of Company’s shares held: 0 shares
Board of Directors meeting participation:
Attended 17/17 meetings

Number of Company’s shares held: 29,865 shares
Board of Directors meeting participation:
Attended 17/17 meetings

Apr. 1973: Joined Japan Development Bank
(currently Development Bank of Japan Inc.)
Oct. 1999: General Manager of Urban Development
Department of Development Bank of Japan Inc.
June 2002: General Manager of General Affairs
Department of Development Bank of Japan Inc.
June 2004: Executive Director of Development
Bank of Japan Inc.
Oct. 2008: Director and Executive Managing
Officer of Development Bank of Japan Inc.
June 2009: Vice President and Representative
Director of Tokyo Ryutsu Center Inc.
President and Representative Director of TRC
Service Co., Ltd.
June 2013: President and Representative Directorof Tokyo Ryutsu Center Inc.
Director of TRC Service Co., Ltd.
June 2017: Chairman and Director of DBJ AssetManagement Co., Ltd.
June 2018: Adviser of DBJ Asset Management Co., Ltd.
Mar. 2019: Outside Director of the Company (tothe present)

Apr. 1981: Appointed as Public Prosecutor
Jan. 2007: Special Investigation Director of Tokyo
District Court Public Prosecutors Office
Dec. 2015: Chief Prosecutor of Tokyo District
Court Public Prosecutors Office
Sept. 2016: Deputy Prosecutor-General ofSupreme Public Prosecutors Office
July 2018: Superintending Prosecutor of Tokyo
High Public Prosecutors Office
Mar. 2019: Registered as attorney-at-law (to thepresent)
June 2019: President of Japan International
Training Cooperation Organization (JITCO)(currently Japan International Trainee & Skilled
Worker Cooperation Organization) (to thepresent)
Mar. 2020: Outside Director of the Company (tothe present)

Apr. 1983: Joined the Company
Apr. 2009: Managing Officer, Senior Manager ofCorporate Governance Department of Corporate
Strategy Center and Senior Manager of Human
Resources & Administration Service Department
of Business Support Center of the Company(served concurrently)
June 2013: Deputy Chief of Business Support
Center of the Company
June 2014: Director and Managing Officer of theCompany
President and Representative Director of
Nisshinbo Textile Inc.
June 2016: Executive Managing Officer of theCompany
Mar. 2019: Director and Executive Managing
Officer, and Chief of Corporate Strategy Center of
the Company
Mar. 2024: Standing Auditor & Supervisory Board
Member (to the present)

Number of Company’s shares held: 16,545 shares
Board of Directors meeting participation: Attended
14/14 meetings*
Audit & Supervisory Board meeting participation:
Attended 10/10 meetings*

Number of Company’s shares held: 0 shares
Board of Directors meeting participation:
Attended 17/17 meetings
Audit & Supervisory Board meeting participation:
Attended 14/14 meetings

Number of Company’s shares held: 0 shares
Board of Directors meeting participation:
Attended 13/14 meetings*
Audit & Supervisory Board meeting participation:
Attended 9/10 meetings*

Mar. 1990: Joined New Japan Radio Co., Ltd. (currently

Apr. 1988: Registered as an attorney-at-law (tothe present), joined Tanaka & Takahashi Law
OfficeMay 2001: Joined Clifford Chance Law Office
May 2011: Joined K&L Gates LLP
Oct. 2014: Joined Sonderhoff & Einsel Law andPatent Office
Mar. 2019: Outside Audit & Supervisory Board
member (to the present)
July 2023: Joined Aquaxis Law Office (to thepresent)

Oct. 1992: Joined Deloitte Touche Tohmatsu
International (currently Deloitte Touche Tohmatsu LLC)
July 1997: Joined Tadao Kato Accounting Office
Aug. 1999: Joined Taiyo Audit Corporation(currently Grand Thornton Taiyo LLC)
May 2000: Registered as Certified Public
Accountant (to the present)
Nov. 2002: Established Ichiba Certified Public
Accountant Office
Representative of the Office (to the present)
Aug. 2008: Registered as Certified Public Tax
Accountant (to the present)
Oct. 2008: Established UPRISE Certified Tax
Accountant’s Co.
Representative Partner of UPRISE Certified Tax
Accountant’s Co. (to the present)
July 2022 Supervisory Director of Ichigo Office REIT
Investment Corporation (to the present)
Mar. 2023: Outside Audit & Supervisory Board
member (to the present)*Mar. 2023 Since appointment as Audit &Supervisory Board Member

Yasuji Ishii

Apr. 1986: Joined the Company
Jan. 2014: Senior Manager of Finance andAccounting Group of Finance, Accounting & IT
Service Department of Business Support Center of
the Company
June 2015: Senior Manager of Finance, Accounting& IT Service Department of Business Support
Center of the Company
Apr. 2018: Managing Officer of the Company
Mar. 2020: Director and Managing Officer of theCompany (to the present)
Apr. 2020: Senior Manager of Finance,
Accounting & IT Service Department of Corporate
Strategy Center of the Company (to the present)
Mar. 2024: Deputy Chief of Corporate Strategy
Center (served concurrently, to the present)

Keiji Taga

Hiroaki Yagi

Kazunori Baba

Nisshinbo Micro Devices Inc.)
Apr. 2005: General Manager of Accounting Department,
General Affairs Division of New Japan Radio Co., Ltd.
Apr. 2011: Managing Officer and General Manager ofCorporate Planning Department, General Administration
Headquarters of New Japan Radio Co., Ltd.
June 2012: Head of General Administration Headquarters of
New Japan Radio Co., Ltd.
Apr. 2014: Executive Managing Officer and Deputy General
Manager of Electronic Device Division of New Japan Radio Co., Ltd.
June 2015: Director, Managing Officer and Deputy General
Manager of Electronic Device Division of New Japan Radio Co., Ltd.
Apr. 2016: General Manager of General Administration
Headquarters of New Japan Radio Co., Ltd.
Apr. 2018: Director, Executive Managing Officer and General
Manager of Business Divisions of New Japan Radio Co., Ltd.
Sept. 2018: Representative Director and President of New
Japan Radio Co., Ltd.
Mar. 2021: Managing Officer of the Company
Jan. 2022: Representative Director, Senior Executive
Managing Officer and General Manager of Corporate
Administration Headquarters of Nisshinbo Micro Devices Inc.

Noriko IchibaMar. 2023: Standing Auditor & Supervisory Board Member46(to the present)*Mar. 2023 Since appointment as Audit & Supervisory Board Member

47

Data Section

Apr. 1988: Joined the Company
Apr. 2011: Managing Officer and General Manager
of Production of Friction Materials Division of
Nisshinbo Brake Inc.
Apr. 2013: Executive Managing Officer, Senior
Manager of Strategy Office, and General Manager
of Product Division (served concurrently) andEngineering Division of Nisshinbo Brake Inc. (served
concurrently)
June 2013: Director and Executive Managing Officerof Nisshinbo Brake Inc.
Jan. 2015: Senior Manager of Brake R&D Division of
Nisshinbo Brake Inc.
Apr. 2015: Vice President and Director of Nisshinbo Brake Inc.
June 2015: Managing Officer of the Company
June 2017: President and Representative Directorof Nisshinbo Brake Inc.
Mar. 2019: Director and Managing Officer of the Company
Mar. 2023: Chairman and Director of Nisshinbo Brake Inc.
Deputy Chief of Corporate Strategy Center of the Company
Mar. 2024: Director and Executive Managing
Officer of the Company (to the present)
Chief of Corporate Strategy Center (to the present)

Shuji Tsukatani

Connect Everything, Create Value ｜ Board of Directors, Audit & Supervisory Board Members andManaging Officers

Connect Everything, Create Value ｜ Corporate GovernanceCorporate Governance Global compliance
Basic StanceExpertise and Experience Required of Nisshinbo Directors (Skill Matrix)
Selecting the skills required for directors to supervise and guide various businesses from a variety of expert
perspectives, and incorporating diversity into the Board of Directors enables Nisshinbo to realize highly
effective governance.

Name

International
experience andknowledge

Businessand industry
knowledge

ESG

Technology andinnovation

Masahiro Murakami●●

Takeshi Koarai

●

●

●

Satoru Taji

●

●

●

Keiji Taga

●

●

●

●

Legal and risk
management●●

Finance andaccounting●

Nisshinbo Corporate Governance Policy at https://www.nisshinbo.co.jp/english/ir/governance/policy.html●●●

stronger corporate governance structure founded on our Corporate Philosophy.
Corporate Governance Report at https://www.nisshinbo.co.jp/nish/ir/governance/pdf/governance/c_governance_en.pdf●

Hiroaki Yagi

By making rapid and bold decisions based on risk-taking in line with our management principles, we are working toenhance management efficiency while ensuring transparency, as well as improve accountability, act ethically and build a▶ Details regarding Nisshinbo corporate governance are as follows.

●●

striving to deliver quantitative growth in earnings and shareholder value, focusing on ROE to improve profitability and placing
importance on the share price in management decisions.

●

Corporate Governance Policy

Matters Concerning the Composition of Governing Bodies
and Organization Management

URL: https://www.nisshinbo.co.jp/english/ir/governance/policy.html

Organizational form

We have formulated the Nisshinbo Corporate Governance
Policy, which clearly states our basic thinking on corporate
governance and related initiatives. By steadily implementing
the principles of the policy and revising and improving its

●

●

●

President

Number of directors (including outside directors)

10（5）content as needed, we aim to improve the effectivenessdecision-making that contributes to sustained growth andAppointed

Number of outside directors designated as independent
officers

5

Number of Audit & Supervisory Board Members underthe Articles of Incorporation

5

Number of Audit & Supervisory Board Members(including outside members)

●

4（2）

Number of outside corporate auditors designated as
independent officers

●

●

2

Corporate Governance Structure
General Shareholders' Meeting●

Yuki Ikuno●●

Board of Directors

AdviseSenior Executive
Managing Officer

Takeshi Koarai**Concurrent board member

Executive Managing Officers

Satoru Taji*Managing Officer

Shuji Tsukatani*

Yasuji Ishii*

Nobuyuki Adachi
General Manager, Business
Development Division

48

Managing Officer

President,
Nisshinbo Mechatronics Inc.

Managing Director,
Nisshinbo Singapore Pte.
Ltd.

Managing Officer

Makoto Ashida

General Manager of Legal Affairs
Group, Human Resources andAdministration Service Department,
Corporate Strategy Center

Kazuo Saito

Managing Officer

Yasuki Hattori
President,
Nisshinbo Brake Inc.

Managing Officer

Managing Officer

President,
Nisshinbo Textile Inc.

President,
Nisshinbo Chemical Inc.

Kaoru Murata

Managing Officer

Ikuo Takahashi

Tetsuya Kumakawa
Director, Executive Officer,
Nisshinbo Brake Inc.

Reappoint

Coordinate

ReportFinancial Auditors

Coordinate

Accounting audit
Instruct
ReportInstructInternal Audit Oﬃcer

ReportManaging Oﬃcers, Business Divisions, Group Companies

Managing Officer

Toshihiro Masuda

Report

Audit

Discusses business execution matters

Board of Management

Coordinate

Audit<Audit functions>

Data Section

Managing Officer

Discuss/
ReportRepresentative Directors

Senior Manager of Sustainability Development
Department, Corporate Strategy Center

Representative Director, President
and Chief Executive Officer,
Hitachi Kokusai Electric Inc.

Appoint/
Oversight<Business execution functions>

Makoto Sugiyama

Kaichiro Sakuma

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

Recommend

Nomination Committee
Remuneration Committee

Executive Managing Officer

Managing Officer

Appoint/Dismiss

Audit & Supervisory Board

Audit

10 directors (including ﬁve independent outside directors)

Managing Officers
Masahiro Murakami*

Appoint/Dismiss<Decision-making and oversight functions>*Up to four major skills are listed for each Board member. Not all skills are represented.

President

Appoint/Dismiss

Overview of Business Segments

Richard Dyck●

1 yearChairman of the Board of Directors
Outside director appointment statusincreased corporate value over the medium to long term.
Naoko Tani

14

Term of office for directors under the Articles ofIncorporationof governance and create a framework for rapid and bold●

Company with Auditors

Number of directors under the Articles of Incorporation

Sustainability

Shuji Tsukatani

Nisshinbo Group corporate philosophy:“Change and Challenge! For the creation of the future of Earth and People.”To achievethis, we are improving the quality of corporate governance and other aspects of our organizational culture. In parallel, we areManagement
experience

Yasuji Ishii

group by operating its various businesses based on global business management and cash flow management. We follow theValue Creation

Skill*

Nisshinbo is aiming to increase corporate value over the medium to long term as an Environment and Energy Company

Corporate Governance Structure
Please refer to the Nisshinbo Corporate Governance Policy

By transferring responsibility for business execution to managing

sections II-1, II-3, II-6 and II-7.

officers and strengthening oversight by the Board of Directors,
we are improving management efficiency and transparency and

The Group has adopted a Company with Audit & Supervisory

creating an effective governance structure that will support theBoard system. In addition, Nisshinbo has separated decision-

Group’s sustained growth and enhance corporate value over the

making and oversight from business execution and adopted a

medium to long term.

managing officer system to reinforce those functions.

49

Connect Everything, Create Value ｜ Corporate Governance

Board of Director Duties and Diversity
Please refer to the Nisshinbo Corporate Governance Policy sections
II-1 and II-4.

along the lines of environment and energy, the Board of Directors
selects management talent as candidates for directors who
possess outstanding management experience, have the necessary
firm commitment and ability to realize the Company’s Corporate

fiduciary duty to shareholders and thus strive to appropriately

Philosophy and increase corporate value, and who enhance thereflect shareholders’ intentions within the board. By overseeing

composition of the board through greater diversity in areas such as

the preparation and management of internal control and risk

gender, nationality, professional experience, and age. Furthermore,management systems, directors and the board help to monitor

the Nomination Committee, which includes outside directors,

business execution and decision-making. At the same time, thedeliberates the experience, knowledge, expertise and other skills

Company fearlessly confronts risk and works to achieve governancerequired for the Board of Directors, as well as the skills of eachthat is focused on quick and bold decision-making. In this manner,

Board member. As of March 28, 2024, the Board of Directors was

the Company aims to achieve greater accountability to stakeholders,composed of 10 directors, of which five are independent outside

increased profitability and higher returns for shareholders.

directors (including two women). The skills and expertise of each
Board member are listed in the Skill Matrix on page 48.

To promote the globalization of each Nisshinbo company

Composition of the
Directors

Independence

Diversity

Ratio of Outside Directors: 50%

Ratio of women: 20%

strengthen the Group’s overall profit structure, we will share thestrengthen Group profit structure and promote sustainability

policies of each Group company and engage in careful monitoring.

management

・To promote sustainability management across the entire Group, we・Select and thoroughly discuss effective monitoring themes towill continue to discuss relevant themes in a systematic manner.

ensure objectivity and transparency of strategies

・To improve the effectiveness of deliberations at Board meetings, we

・Strive to ensure two-way communication between directors andaim to realize further improvements and innovations in the overall

executive members to effectively monitor strategy execution

operation of Board meetings, and by setting up opportunities outside
Board meetings for discussions between executive members andoutside directors.

Remuneration for Directors and Senior Managers
Remuneration for directors comprises basic remuneration

Please refer to the Nisshinbo Corporate Governance Policy section II-2.

(monthly payment) and bonuses and stock-based remuneration

To increase transparency and objectivity in processes for(restricted stock compensation plan), both of which are set within

determining remuneration, Nisshinbo has established athe maximum limits approved by the General Shareholders’ Meeting.

Remuneration Committee as an advisory body for the Board of

Stock-based remuneration for each role is set within separate

Directors. As of March 28, 2024, the committee comprised the

maximum limits for amounts and shares determined by resolutions

president and five outside directors. The committee chairman isof the General Shareholders’ Meeting. However, outside directors

selected by members of the committee.

receive only basic remuneration (monthly payment) and retirement
benefits are not paid to directors. Remuneration for managing

Improvement Eﬀorts in 2023

officers is based on the same policies and procedures.

・The number of inside directors has been reduced from six to ﬁve, resulting in an outside director ratio of 50% (ﬁve directors), whostrengthen management transparency and supervisory functions.

2006
2015
2016

2018
2021

2022

Composition of the Board of Directors（year）
2005
Abolished takeover defense measures
2006
2007
Corporate Governance Policy formulated, established2008
Remuneration Committee and Nomination Committee
2009(both discretionary bodies), started evaluating2010
eﬀectiveness of Board of Directors
2011
2012
Abolished internal advisor and consultant system
2013
2014
Introduced restricted stock compensation system
2015
As a Prime Market‒listed company, in response to
2016
2017
Corporate Governance Code revisions (June 2021), theGroup began conducting climate change scenario analyses 20182019
in accordance with the Task Force on Climate-related
2020
Financial Disclosures (TCFD) recommendations.
2021
To ensure objectivity in evaluating the eﬀectiveness of the2022
Board of Directors, Nisshinbo asks outside consultants to2023
conduct questionnaires and interviews with directors and2024
Audit & Supervisory Board members. The consultantʼs0knowledge is also used to analyze the results.

Number of inside directors

Number of outside directors （Director (Excluding Outside Directors) Remuneration Breakdownof which are women）

Remuneration for Directors and Auditors (fiscal period ended December 2023)

Classification

5

10

15（people）

stimulated and invigorated by the candid comments of each

In 2023, we again requested the insights of an outside consultant

and transparency of the executive decision-making process. At

to conduct an evaluation aimed at more objectively confirming

the same time, we confirmed that further progress is expected

the effectiveness of the Board of Directors. The outside consultant

with regard to the promotion of sustainability management andconducted a survey of all directors and auditors, and the Board

strengthening of the profit structure across the Group, whichof Directors discussed the results of this analysis based on thewere priority initiatives in the previous fiscal year. In light of theaggregated results. As a result, Nisshinbo's Board of Directors,

issues identified, we will engage in the following efforts in 2024

which comprises members from diverse backgrounds, wasto contribute to sustainable growth and the enhancement ofevaluated as functioning effectively, with discussions being

corporate value over the medium to long term.

officer, serving as a cornerstone for enhancing the objectivity

Total remuneration(millions of yen)

Remuneration breakdown (millions of yen)
Basic remuneration(Fixed)Bonus(Performance-linked)

Restricted stockcompensation planTotal
number of payees

Directors(excluding outside directors)

199

137

45

15

7

Audit & Supervisory Board members(excluding outside Audit & Supervisory
Board members)

34

34

̶

̶

3

Outside directors and outside Audit &Supervisory Board members

62

62

̶

̶

10

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 10 directors (including five outside directors) and four Audit & Supervisory Board members (including two outside members of the Audit & SupervisoryBoard) as of March
28, 2024.
4. The actual amount of bonus payments reflects degree of achievement regarding performance targets such as net sales, pretax profits, operating cash flow and other indicators related to theGroup or businesses remitted at a fixed rate according to position.
5. Restricted stock is allocated to each director (excluding outside directors) as stock-based compensation. In the fiscal year ended December 2023, 14,405 shares (with a compensation value of¥14 million) were allocated to the six directors (excluding outside directors) on May 16, 2023, with conditions including a transfer period restriction from May 16, 2023, to May 16, 2026.

51

Data Section

Evaluating the Effectiveness of theBoard of Directors

50

Variable remuneration (standard bonus
amount and stock-based compensation)
30–33%

Fixed remuneration (basic remuneration) 67–70%

Overview of Business Segments

2017

Introduced outside director system and managing
oﬃcer system, reduced term of oﬃce for directors fromtwo years to one

Sustainability

Corporate Governance Reforms(Reference) 2023 Priority Issues
・Deepen strategic discussions from a broad perspective to

Value Creation

Directors and the Board of Directors recognize that they have a2024 Priority Issues
・To improve the productivity and profitability of each business andConnect Everything, Create Value ｜ Corporate Governance

Remuneration Committee Activities
Please refer to Nisshinbo Corporate Governance Policy II-2.
In the fiscal year ended December 2023, the Remuneration

Committee Members in Fiscal 2023
Chairman:

Keiji Taga, Outside Director

Members:

Hiroaki Yagi, Outside Director

Please refer to the Nisshinbo Corporate Governance Policy section III-2.
The director in charge of IR supervises numerous measures aimed

dialogue.

Richard Dyck, Outside Director

at benchmark companies through an outside research organization’s

Yuki Ikuno, Outside Director

database. It also examined the need for a review and revision of

Stakeholder Engagement

Masahiro Murakami,

the remuneration table (which stipulates compensation structure,

President and Representative Director

amount, and ratio) applied to directors and executive officers,

Please refer to the Nisshinbo Corporate Governance Policy
sections III-1 and III-3.

and determined individual remuneration (basic remuneration andstandard bonus amount) for each. Further, an outside director wasline with the aims of our VALUE commitment, we work hard
to resolve any issues by emphasizing dialogue with customers,
shareholders, employees and all other stakeholders connected to

Nisshinbo recognizes that continuous dialogue with stakeholders

appointed Chair of the Remuneration Committee for fiscal 2023.

the Nisshinbo Group.

is key to supporting sustained growth in corporate value. In

Stakeholder Engagement Initiatives

Selection and Dismissal of Directors and Senior Managers
Please refer to the Nisshinbo Corporate Governance Policy section II-2.

disclosure outside the Company and various types of direct

at communicating with shareholders and investors, actively

Naoko Tani, Outside Director2023) to confirm and analyze remuneration levels and composition

engaging in IR activities that include accurate and fair information

Value Creation

Committee met three times (October, November, and December

Dialogue with Shareholders

outside directors. Regarding senior management, directors andStakeholder

of Directors of candidates based on prescribed criteria. If reasonsand dismissing directors, Nisshinbo has established a Nomination

for ineligibility arise with respect to senior management, directors

Committee as an advisory body for the Board of Directors. As ofor executive officers, their dismissal or removal is reported to the

March 28, 2024, the committee comprised the president and five

Board of Directors.

Customers● Corporate website and social media ● Exhibitions ● Online seminars

Key department/site

Marketing/Engineering● Activities aimed at increasing customer satisfaction ● CM
● General Meeting of Shareholders (one time)● Results brieﬁngs (two times) ● Business brieﬁngs (two times)

Nomination Committee Activities
Please refer to Nisshinbo Corporate Governance Policy II-2.
In the fiscal year ended December 2023, the Nomination

Committee Members in Fiscal 2023
Chairman:

Keiji Taga, Outside Director

Members:

Hiroaki Yagi, Outside Director
Richard Dyck, Outside Director

Supervisory Board members, and executive officers at the company

Yuki Ikuno, Outside Director

and its main subsidiaries, and formulated a draft of candidates to

Masahiro Murakami,

be submitted to the Board of Directors. Further, an outside director

President and Representative Director

was appointed Chair of the Nomination Committee for fiscal 2023.

● IR tools (e.g., Integrated Report, Sustainability website, Shareholder newsletter)

Employees

Protecting the Rights and Ensuring the Equal Treatment of Shareholders,and Dealing with Cross-Shareholdings● Group internal newsletter, Intranet

Corporate
communications● Dialogues between company presidents (including subsidiaries) and employees

All departments● Employee health measures (about 30 times)

Health Management
Department● Internal whistleblower system (11 cases)

Corporate Ethics
Department● Improvement proposal meetings

Please refer to the Nisshinbo Corporate Governance Policy section III-2.
The Company shall ensure that the exercise of minority shareholder

Changes in Cross-Shareholdings

rights is not impeded and will take appropriate measures to fully(Stocks)

protect shareholder rights. The Company will implement various
measures related to communication with shareholders and investors
and ensure the appropriate operation of the General Shareholders’
The Company has set out a policy for cross-shareholdings. Inline with that policy, it regularly assesses the purpose and economic
rationale for cross-shareholdings based on capital costs and otherindicators.
Shares with diminished strategic value are sold incrementallyand systematically.

52● Factory tours, work experience, workshops (54 times)

60(¥69.1 billion)

63(¥46.9 billion)

55(¥45.7 billion)

52(¥30.2 billion) (¥35.5 billion)

49

Regional
communities

40

0

Business sites● Participation in projects to protect biodiversity

49

Suppliers

20● Cleaning activities

Data Section

Meeting.

All departments● Disaster prevention, BCP and other emergency drills

100
80

Corporate
communications● Online information for shareholders and investors

Naoko Tani, Outside Director

December 2023) to discuss the appointment of directors, Audit &● Individual meetings with institutional investors and analysts (about 120 times)

Overview of Business Segments

Committee met five times (May, July, September, November, andShareholders/
Investors

Sustainability

executive officers, the Nomination Committee informs the Board

To increase transparency and objectivity in processes for selecting

Examples of approaches (ﬁscal 2023 activities)● Spread awareness of sustainable procurement basic policies

Procurement Division● Sustainable procurement surveys

2019.122020.122021.122022.122023.12NGOs, NPOs,
government
agencies● Various donation activities

Business sites

53Connect Everything, Create Value ｜ Compliance

Connect Everything, Create Value ｜ Risk Management

Compliance

Risk Management

The Nisshinbo Group is working to establish corporate governance based on its corporate philosophy to ensure

Risk Management System

sustainable growth and enhance corporate value. Also, the Nisshinbo Group included“Thorough-Going Compliance”in
its Business Conduct Guidelines, which clearly states that the Group will act in constant fairness and sincerity across a
broad range of issues, respecting social norms and corporate ethics, and in addition to establishing a system, will provide

risk management, and are promoting various initiatives.
・ Continuous operation of the risk management system in response to the external environment

Corporate Ethics Committee andCorporate Ethics Reporting System

New educational videos are released and repeated every year
through the Learning Management System introduced in 2021.

Nisshinbo has established a Corporate Ethics Committee to handle
all compliance matters across the Group.
Guided by its Corporate Philosophy, the Nisshinbo Groupendeavors to instill and firmly establish corporate ethics among all
employees in all aspects of its business activities. The Group has
established a“Corporate Ethics Reporting System”with the aim ofpromptly discovering and preventing violations of laws and regulations
and alleged violations of corporate ethics. Group employees canreport their concerns internally to the Corporate Ethics Committee
or directly to an outside corporate attorney. All information provided
effort is made to protect whistleblowers from unfair treatment. The
Corporate Ethics Committee takes appropriate steps to deal withissues raised by reports. We set the following KPIs as targets for these
initiatives and are moving forward with various activities.
Quantitative Targets
FY2023 Results

・Response rate to corporate ethics reporting system, 100%

100%

The number of reports made to the Corporate Ethics Reporting
Desk of Nisshinbo Holdings Inc. in fiscal 2023 is as follows. The
while ensuring that confidentiality is strictly maintained and thatthe whistleblower is not disadvantaged. If a violation is found, thewhistleblower will be punished in accordance with the Company's
employment regulations.
The number of cases Disciplinary action for facts

Harassment Related3(1)Violation of Law

0

Labor Issues

1(1)Accounting Irregularities

0

Others (Moral Violations, etc.)

7(2)Total number of reports
Total number of reports
handled by the committee

attention to (examples of potential compliance problems, preventive
measures, internal rules, etc.), and developed videos to strengthen
governance and raise managers' awareness of ethics once again.
In addition, export control education videos were developed for
those in charge to introduce cautions and countermeasures using specificcase studies as subjects.
E-learning and other educational videos are regularly reviewed
to ensure that the content does not become obsolete, and that theeducation itself does not become a mere shell.

Anticorruption Efforts
In recent years, international legislation on bribery and corrupt practices

Nisshinbo Holdings (HD)Japan Radio
Hitachi Kokusai Electric
Nisshinbo Micro Devices
Nisshinbo Brake
Nisshinbo Mechatronics
Nisshinbo Chemical
Nisshinbo Textile

Formulate plan for new ﬁscal year

Risk Management
Committee

Identify and evaluate risks, develop appropriate responses

AnnualreviewPresidents and key
personnel from HD and core
operating companies
Instruct

Person with ultimate
responsibility= President of HD
Appoint
Risk management
general manager
Risk Management Oﬃce

Implement
PDCA

External risks
Political/
economic

Internal risksMonthly
review

ClimatechangeBusiness portfolio
Capex/R&D
Attract/train
human resources
Regulatory Governance, etc. Changes inframework

Conﬁrmrisk
management
statusindustrial
structureConﬁrmrisk
management
statusOperating environment

Identify risks for entire Group and verify response measures

Board of Management

Verify major risks and risk developments, discuss responses

Board of Directors

Report on status of urgent and high-priority risks

Note: HD means Nisshinbo Holdings Inc.

have been strengthened, and detection has grown more rigorous.
Nisshinbo Holdings Inc. formulated the“Guide to Prevent Corruption”

Identification of Emerging Risks

depending on the pattern of training e-mails, and the Group willrolled out the guide across the Group, including all subsidiaries inIn the risk management regulations, Nisshinbo Group established

use this as an opportunity to identify future issues, enhance security

other countries. This guide encompasses Article 18 of Japan’s Unfair

standards by listing specific examples of risks that should be

education, and continue targeted e-mail training.

Competition Prevention Act (Prohibition to Provide Illicit Gain, etc. toreported. By identifying and sharing risks as soon as they become

Foreign Public Officers, etc.), the United Nations Convention against

apparent, Nisshinbo Group is prepared to implement the necessary

Responding to Disaster Risk

Corruption (UNCAC), the OECD Convention on Combating Bribery ofcountermeasures before they have a significant impact on business.

The Nisshinbo Group has established an emergency response

Foreign Public Officials in International Business Transactions, the United

In FY2023, there were 41 reported risks, but fortunately thein response to related legislation in other countries. The Group has

system in the "Risk Management Regulations" in order to promptlyStates Foreign Corrupt Practices Act (FCPA) and related guidelines,

majority of events were at a level that could be handled by each

respond to emergencies, such as earthquakes and fires. Furthermore,

and the United Kingdom Bribery Act, Unfair Competition Prevention

company and did not have a significant impact on business continuity.

to prepare for large-scale earthquakes and other emergencies from

Law of the People’s Republic of China, and other international anti-

Nisshinbo Group will continue to ensure that the Group is well

the perspective of business continuity, the Group conducts annual

corruption treaties and laws, including criminal laws and anti-corruption

informed of this so that it can be used effectively as a tool to inform

information communication training necessary for confirming thelaws in Asian countries. The Group reviews the content of the guide as

the first responders of risks that have emerged.

safety of employees and quickly recovering from disasters. A“ safetynecessary and uses it for group-wide anticorruption efforts.

Ensuring Business Confidentiality

Thorough Information Security

confirmation and emergency contact system”was developed andintroduced to confirm safety quickly and reliably.

The Nisshinbo Group regards information security as a critical risk,

In FY2023, Nisshinbo Holdings added a function (push11

Nisshinbo signs non-disclosure agreements with suppliers to prevent

11(4)and we are working to improve information security and establish

notification function) to its safety confirmation and emergency

any leak of confidential information such as intellectual property,

an information security operation system. We have set the following

communication system to request input of safety information. In

technologies and expertise disclosed during the product design and

KPIs as qualitative targets for these efforts, and are moving forward

preparation for the occurrence of a large-scale disaster, the company

development stage and across all points of the supply chain.

with various activities.

is further upgrading the system to speed up employee safety

Disciplinary Action 1

100%
Responded* The number of reports in parentheses is the number of confirmed violations and other specific facts.

Compliance Education

We also conduct annual internal audits to check whether theGroup’s trade secrets are being managed appropriately.

confirmation by conducting company-wide training for inputting andresponding to such requests.
In addition, during the BCM training in FY2023, Nisshinbo Group

conducts compliance training for different employee levels andInternal Control

work sites and provides training to employees prior to overseas

We cultivate a sound corporate culture throughout the Nisshinbo

its e-mail security system, installs antivirus software on information

startup and maintenance of functions of an emergency response

assignments. We set the following KPIs as targets for these initiatives

Group based on our corporate philosophy. We established and operate

equipment, and applies security correction programs thoroughly. In

headquarters in the event of loss of power due to a disaster and thenand are moving forward with various activities.

an internal control system to identify and rectify business execution

terms of education, targeted e-mail drills are conducted once a year

provided instructions to emergency response headquarters personnel

process issues. We set the following KPIs as targets for internal control

for employees of domestic and overseas Group companies. In theand team members on how to secure power and communications

initiatives and are moving forward with various activities.

FY2023 training, training e-mails simulating five targeted e-mail drills

during initial response. Nisshinbo Group plans to continue to maintain

Quantitative Targets
FY2023 Results

・ Rate of compliance training participation by
management-level personnel, 100%

54

98%

・ Continuously developing and operating internal control systems

To counter cyber-attacks, the Group monitors e-mails throughintroduced generators and portable power supplies to simulate thewere prepared for 7,339 participants from 26 Group companies

the necessary equipment in the event of an emergency.

and sent to the targets at random. The open rate varies greatly▶ Please see Key Risks and Opportunities on page 29.

55

Data Section

To ensure fair and honest business practices, the Nisshinbo Group・ Strengthen protection against external threats and continuously
training employees on information security

Overview of Business Segments

Corporate Ethics Committee responds to all reports appropriately,In the FY2023 compliance training, Nisshinbo Group
incorporated content that it wanted managers to pay particular

Risk Management Structure

Sustainability

by whistleblowers is treated in the strictest of confidence, and every

FY2023business risks and minimize any losses associated with those risks. We also set the following KPIs as qualitative goals for
Value Creation

education to all employees.

The Nisshinbo Group has established a risk management system, shown in the diagram below, to appropriately addressConnect Everything, Create Value ｜ Performance by BusinessPerformanceby Business
The Nisshinbo Group is made up of seven distinct businesses—Wireless and Communications, Micro Devices,
Nisshinbo supplies high-value-added products that meet customer needs, driven by innovation born out of the

Wireless and Communications
Marine systems▶ Marine navigation and communications
equipment
Solutions and specialized equipment ▶Disasterprevention systems and weather radar
ICT and mechatronics▶ Communications and officeequipment, electronic components for automotive
applications
Medical equipment▶ Portable ultrasound analyzers,
intravascular/endoscope oscillators

Net sales(Millions of yen)

200,000

8,000

152,212 144,312 155,084 150,392 158,081

4,000

50,0002,000

2019.122020.122021.122022.122023.120

Operational amplifiers, comparators, power
management ICs, lithium-ion battery protection ICs,
optical semiconductors, RF devices, audio ICs, etc.

80,00065,28560,00077,37380,044

61,14002021.122022.120Main products and services
Friction materials▶Disc pads and brake linings-2,0002019.122020.122021.12 2022.12 2023.12

Net sales-4,000-3,3402019.12-2,2892020.123,558
2021.12-4,6642022.12(Millions of yen)

200,000

131,338

114,826

138,295

153,643

178,541

100,000
50,0002019.122020.122021.12 2022.12

2023.12

5,000
4,000
3,000
2,000
1,000
0
-1,000-2,000-3,000-4,000-5,000

4,682

2019.122020.122021.122022.122019.12 2020.12 2021.12

TextilesMain products and services
Shirts▶Dress shirts, casual shirts and fabric, thread
Textiles▶ Uniform fabric, etc.
Developed materials▶ Non-woven fabrics, polyurethane
products

9,390

9,577

11,083

12,673

11,433

1,500
1,000

3,000

500

2019.122020.122021.12 2022.12 2023.12(Millions of yen)

33,957 34,478

38,33337,481

Real Estate

Textiles¥37.4 billion
Chemicals¥11.4 billion

56¥158.0 billion

2.1%
6.9%
2.1%

Precision Instruments¥53.2 billion

0

Wireless and Communications

9.8%

Net Sales¥541.2 billion(Period ended December 2023)

Micro Devices¥80.0 billion

29.2%

14.8%

Real Estate

Main products and services
Leasing▶ Leasing of commercial facilities, offices,condominiums, and other properties through theredevelopment of unused assets and vacant business sites
Sales▶ Planned sales of land and buildings that have beenleased or redeveloped2021.122022.122023.12

1,200

1,036

800

99

0

-812

-800

2019.122020.122021.122022.12 2023.12-1,2002019.122020.12-1,0222021.12-4202022.12 2023.12

condominiums, among other factors.
Net sales

Segment profit(Millions of yen)

(Millions of yen)

25,00010,00015,584

11,655

11,178

11,263

8,000

9,388

8,163

8,719

8,518

6,000
4,000

5,000
0

11,511

12,00020,27910,00033.0%

2020.12The Real Estate business reported sales of ¥11,263 million (up 0.8% year on year) andsegment profit of ¥8,518 million (down 2.3% year on year). Despite a decrease in the saleof residential land in Hamamatsu, Shizuoka Prefecture, sales and profits were on par withfiscal 2023 due to the sale of condominiums in Higashiomi, Shiga Prefecture and renovated

15,000¥178.5 billion

2019.12400

20,000Automobile Brakes

2,181

Data Section¥11.2 billion

2.1%

2,054

801

-400

10,000¥11.1 billion

1,811

Segment profit
49,50530,000Net Sales Composition by Segment

0

1,649

The Textiles business reported sales of ¥37,481 million (down 2.2% year on year) anda segment loss of ¥420 million (down ¥519 million from fiscal 2023 segment profit of¥99 million). In the shirts segment, sales of APOLLOCOT shirts and other form-stabilized
products remained strong, while TOKYO SHIRTS CO., LTD., also enjoyed steady sales in
its physical stores. However, sales and profits declined in the Textiles business overall,reflecting lower sales of face mask components bound for overseas and sluggish Brazilian
subsidiary yarn sales in the developed materials segment, and increased imported raw
material costs in line with the weaker yen in the uniform segment.

20,000

Others

2,000

6,000

40,0002023.12

2,500

9,000

50,000-4,6642022.122023.12(Millions of yen)

(Millions of yen)

-3,3402020.12Segment profit

Net sales-2,2892019.122023.12The Chemicals business reported sales of ¥11,433 million (down 9.8% year on year) andsegment profit of ¥801 million (down 63.3% year on year). Despite increased orders ofthermal insulation products for refrigerators and freezers, and glass-like carbon products
for semiconductor manufacturing equipment, sales and profits declined on fewer orders
for the fixed application of bipolar plates for fuel cells overseas, as well as fewer orders ofCarbodilite high-performance chemical additive in Japan and overseas.

02023.12

4,682

3,558

2022.12-900(Millions of yen)Segment profit(Millions of yen)0

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

934-3,8952021.12

-948

-600

12,000256

776-1,20015,000The Automobile Brakes business reported sales of ¥178,541 million (up 16.2% year on year) andsegment profit of ¥4,682 million (¥9,346 million year on year improvement). In the Nisshinbo
Brake Group, automaker production recoveries led to higher sales and profits at subsidiaries inJapan and China, but higher sales and lower profits at subsidiaries in the US and South Korea
due to the impact of soaring raw material and energy costs. Although the Thai subsidiary saw adecrease in sales and profits due to sluggish sales of new cars, sales and profits increased at the
TMD Group in line with the strong performance of its aftermarket business.

150,000

Main products and services

4,291

0

600

715

Overview of Business Segments

Automobile Brakes

Chemicals

8,000

2,000

20,000

879

0
-300

Net sales

4,000

900

2023.12

8,947

10,0006,000

40,00053,655 53,265

20,000(Millions of yen)

85,32955,76840,000

Segment profit(Millions of yen)

100,000

51,419

1,200

300

4,745

2,575

2020.12

1,328

1,500

65,42860,000despite strong sales of automotive products, sales of products for industrial equipment andthe consumer market were weak, resulting in lower sales and profits. In microwave products,
despite robust sales of electron tubes, sales of microwave sensors and satellite communications
components for overseas markets were weak, resulting declines in sales and profits.
Net sales(Millions of yen)

80,000

4,821

4,100

2019.12Segment profit

Sustainability

Main products and services

Net sales

7,814

The Micro Devices business reported sales of ¥80,044 million (down 6.2% year on year) andsegment profit of ¥934 million (down 89.6% year on year). In mainstay electronics devices,

Micro Devices

Fans for air-conditioning equipment, lenses for automobile
headlamps, millimeter-wave transparent emblems, automotive
electronic brake system (EBS) parts

The Precision Instruments business reported sales of ¥53,265 million (down 0.7% year onyear) and segment profit of ¥1,328 million (up 71.1% year on year). Despite an earnings
boost from higher sales of next-generation model“MKC x”valve blocks in the precisionparts business, the Precision Instruments business as a whole saw lower sales year on year
due to the impact of production adjustments caused by customers in the molding products
business holding excessive inventories bound for North America, as well as a decrease inorders due to customer production cutbacks in China. However, segment profit increased inline with the completion of goodwill amortization in fiscal 2022.

(Millions of yen)

6,000

100,000

0

Main products and services

Segment profit(Millions of yen)

150,000

Precision Instruments

Value Creation

Main products and services

The Wireless and Communications business reported sales of ¥158,081 million (up 5.1% year onyear) and segment profit of ¥4,745 million (down 1.6% year on year). In marine systems, sales
and profits increased due to strong orders from the beginning of the fiscal year, and in addition
to higher sales of equipment for newly built merchant vessels and workboats for the European
river market, the weak yen also provided a tailwind. In solutions and specialized equipment,
sales and profits declined despite higher sales of radar equipment to the Ministry of Defense.
This was due to lower sales of prefectural and municipal disaster prevention systems andaeronautical and meteorological systems, which had been robust in fiscal 2022, as well as fading
demand for dam management equipment upgrades and water and river information systems
that monitor water levels and rainfall in rivers.

Automobile Brakes, Precision Instruments, Chemicals, Textiles and Real Estate.
business collaboration and portfolio reorganization that has kept the Group aligned with changing needs.

2,000

2019.122020.122021.122022.12 2023.12

0

2019.122020.122021.122022.12 2023.12

57

Connect Everything, Create Value ｜ Strategies by Business

Strategies by BusinessWireless and Communications
Quantitative Targets(Billions of yen)

Net salesdisasters due to climate change, measures to address aging social infrastructure, and the problem of labor shortages due to declining birthrates
Segment proﬁt margin

300

231.0

250

150
100

158.0
3.0%

6.7%

5.3%

4

3.5%

2

50
0

2023 Results 2024 Plan

62025 Plan

2026 Plan

0

Business Policies within the Medium-Term Management Plan
Marine Systems
Nisshinbo makes efforts to provide solutions that resolve customer issues through improved operational efficiency and optimization in themaritime industry, which is seeing an expansion in new shipbuilding in line with the trend of increasing maritime trade and the move towards
zero emissions vessels, as well as growing expectations for systems that will realize autonomous vessels. We aim to become an indispensable
presence for our customers, primarily by focusing on the research and development of core technologies for automated navigation, proactively
launching them in the market, and utilizing digitalization in our global service network.

To expand market share in government agency infrastructure projects involving water, rivers, and disaster prevention, we have created a
medium- to long-term roadmap that will lead to the steady acquisition of orders. The profits earned through these efforts will then be used
to invest in growth businesses. Specifically, we will focus on expanding business in the areas of disaster prevention network solutions forgovernment agencies and aviation solutions in overseas business. In the private sector area, we will work to expand our market share of relay
equipment and other products in line with demand for digital broadcasting equipment updates. In specialized equipment, we aim to expand
business by focusing on new business in the electromagnetic domain, one of three new domains identified by the Ministry of Defense as being
space, cyber, and electromagnetic.

ICT and Mechatronics
In the ICT business field, we aim to expand business and strengthen profitability through the expansion of smart meters, original productrapid establishment of new smart factory businesses and the shift away from the office equipment business with the aim of improving profitability.
In the components business field, we will focus on laying the foundations for expanding our global market share of automotive power supply
components for use in electric vehicles (xEVs), as we focus on the rapidly expanding xEV market. We will work to cultivate overseas customers,
develop differentiated products, and build sales and logistics bases in Europe.

nationwide initiatives as growth businesses.
First, we will expand sales of wireless infrastructure for Ministry of Land, Infrastructure, Transport and Tourism drone navigation over rivers
to customers nationwide. We have already received an order from the Kyushu Regional Development Bureau for the first such communications
infrastructure project in Japan, and based on this achievement, we will expand operations nationwide to other regional development bureaus in
an attempt to increase scale.
Second, we will accelerate DX business initiatives for government agencies. In implementing disaster prevention countermeasures,
government agencies utilize and manage a variety of data, but often each piece of information is managed in an independent and verticalmanner, which has become a problem due to the complexity of managing equipment during normal operations, and understanding andcommunicating information in times of emergency. As a solution to this problem, the DX Information Sharing System facilitates the sharing andvisualization of information, as well as the easy issuing and transmission of instructions, while also providing centralized management of various
data. Further, it supports operator actions, reduces the need for manpower, and mitigates the risk of information leaks and omissions in times of
emergency. In this way, Nisshinbo uses DX to contribute to human safety and security.
Third, we will develop new technologies that reduce the disaster risks posed by linear rain bands and other meteorological disasters.
Compared to conventional radars, new dual-polarization phased array weather radars have the ability to observe and analyze rainfall andweather conditions in three dimensions and at high densities, making it possible to detect weather phenomena that could cause disasters in thenext few minutes or tens of minutes in advance. This will ensure sufficient time for evacuation in the event of a disaster, as well as dramatically
improve the accuracy of low-level wind shear observations, which is a particular threat at airports. Through the demonstration experimentcurrently being planned in Toyama, we will contribute to river water level predictions and the safe takeoff and landing of aircraft.

ICT and Mechatronics
In the ICT business field, we will expand smart meters by meeting needs for labor-saving meter reading and more advanced meter reading functions.
In addition to further developing the existing gas meter reading field, we will also promote the development of the electricity and water meterreading fields. We are also focusing on the development of information and communications system products for logistics and tracking-related
applications. Through the development of system products, we aim to develop businesses in higher layers, including data utilization services.
In the mechatronics business field, we will strive to expand smart factory production equipment products by leveraging differentiatedproducts, such as automatic wire harness soldering equipment and IoT system products, amid the growing need for plant automation and DX. At
the same time, we will work to improve profitability by revising our contract manufacturing system for office equipment.
In the components business field, given that several global suppliers of xEV power supplies are based in Europe, Nisshinbo will establish asales base in Europe to strengthen differentiated product proposal activities. We will also establish a logistics base in Europe and improve our
product supply system to acquire orders from new customers. Further, we will introduce low-cost production equipment for in-house production

Medical Equipment

focused on promoting the mass production of new products for new customers in Japan.

In the portable ultrasound field, we aim to expand sales of Handy Echo by promoting plans that clarify market targets, and by further improving

Medical Equipment

product capabilities. In the fields of prevention, prognosis and medical systems, we aim to expand sales by strengthening our sales andproduct capabilities and enhancing our lineup of systems for the monitoring of elder care. In the fields of analysis equipment and intravascular/
endoscopic ultrasound, we aim to increase sales and enhance profitability by strengthening our product capabilities as well as our ability torespond to overseas expansion plans.

In the portable ultrasound business field, we will launch the new Handy Echo model and aim to expand sales to new areas, starting withspecialized hospital departments. We will also focus on acquiring ODM and OEM projects, in which we have excelled up to now. In the fieldof prevention, prognosis and medical system nursing care patient monitoring systems, we will attempt to differentiate Nisshinbo products from

Overview of Business Segments

enhancements, and developments in the upper layers of information communication. In the mechatronics business field, we will focus on theGiven these conditions, in 2024, the solutions business will begin creating a roadmap for major nationwide projects focused on the medium
term. While laying the foundations for increasing our market share in government and public sector projects, we will roll out the following three

Sustainability

Solutions and Specialized Equipment

and an aging population, these budgets will place greater emphasis on efforts to promote digital transformation (DX).

Value Creation

200

267.0

246.0

8

those of other companies by adding functions and services that meet market needs, while also utilizing subsidies for hospitals and other facilities,
with the aim of developing a proposal-based sales approach and increasing sales. In the analysis equipment business, we seek to expand

Business Strategy in the First Year of the Medium-Term Management Plan (Fiscal 2024)
Marine Systems
Nisshinbo will provide products and added value in the bustling merchant vessels market focusing on robust demand for new ships. We willbusiness by launching sales of desktop analysis equipment currently under development, and expanding sales of our popular compact analysis
equipment to customers overseas. In the intravascular/endoscopic ultrasound business field, we will attempt to improve profitability by revising
the processing of existing intravascular devices, while also focusing efforts on the acquisition of new customers for endoscopic products.

Data Section

strive to increase business profitability by optimizing personnel resources through organizational restructuring, while also strengthening ourmarket competitiveness, promoting Group-wide human resource development, and providing customers with a sense of security through theworldwide revitalization of sales and services.
We will continue to develop next-generation navigation equipment that can be used as base equipment on board vessels, as well as digitalcontent that will contribute to reducing customers’ operational and maintenance costs and resolve customer issues in preparation for the arrivalof automated navigation.

Solutions and Specialized Equipment
With regard to the public sector, which is a major customer of the solutions business, public works budgets remain on par with previous years,
and the Five-Year Acceleration Measures for the Fundamental Plan for National Resilience are ongoing. In response to the intensification of58

Sustainability Initiatives

Provision of Social Infrastructure Systems

In the Wireless and Communications business, Nisshinbo provides social infrastructure systems such as weather radar, management
systems for dams and rivers, and video systems in response to increasingly severe disasters caused by climate change. Going forward, we
will continue utilizing 5G-related wireless communication technologies and image recognition technologies, in our aim to become a true
solutions provider supporting a safe and secure society.

59Connect Everything, Create Value ｜ Strategies by Business

Strategies by Business

Micro Devices
Quantitative Targets(Billions of yen)

Net salesand strengthen our production system utilizing foundries. We will also focus capital expenditure on back-end processes, such as packaging and
Segment proﬁt margin

120
100

4.4%

60
40
20
0

88.0

8.1%

3.6%

in the back-end processes handled by Nisshinbo Micro Devices AT Co., Ltd., and Nisshinbo Micro Devices (Thailand) in the same way as in the

8front-end processes, as well as by utilizing outsourced semiconductor assembly and test (OSAT) services. To flexibly keep up with the rapidly

6
4

1.2%

2023 Results 2024 Plan

22025 Plan

2026 Plan

0changing demand for semiconductors, we will strengthen our production and sales matching system, reduce inventories, and operate an efficient
production management system.

Microwave Products
In the field of electron tubes and radar components, while demand for replacement magnetrons
for marine radar over the past two to three years has shown some signs of slowing down,
manufacturers of radar equipment are moving towards solid-state alternatives to magnetrons. In

Business Policies within the Medium-Term Management Plan
In the Micro Devices business, Nisshinbo Micro Devices Inc., aims to“contribute toward the resolution of issues faced by society and customers
by creating customer value leveraging the value we have provided through analog technology,”and will work to increase sales by capturing
growth in the analog semiconductor market, and improve profitability by shifting to high-function products such as multi-functional ICs andmodules. We will also develop analog solution devices utilizing distinctive sensors such as sound, smell, and microwave, while developing unit
and digital business with a view to the future through collaborations utilizing technologies within and outside the Group, in addition to existing
technologies in the areas of electronic devices and microwaves.

this environment, we will continue to work with main customers to combine multiple functions
into units, while also preventing the loss of business opportunities through the analysis of industry
and customer information, while aiming to secure orders for magnetron replacement demand. We
will work to further improve profit margins by restructuring production lines to enhance efficiency.
We will also strive to increase sales by expanding our market share in electron guns and cathodes
and increasing production.
In satellite communications, despite the unavoidable impact of low-orbit satellites on the geostationary satellite business, we will maintain

Electronic Devices
In electronic devices, we will implement the Three SINKAs and promote measures to provide new customer value. In mainstay single-function
signal processing (SP) and energy management (EM) products, we will establish a competitive advantage by further“deepening”our strong
proprietary products to achieve high basic performance that exceeds customer requirements.

and expand market share by introducing high- and medium-output products in the Ku-band (14GHz) for existing VSAT (small ground stations)and capturing demand for trunk lines, while transforming our portfolio by developing and launching high-power transmitters in line with the trend
toward Ka-band (transmission 30GHz) products for base stations, and accelerating the creation of high added value.
In the field of microwave sensors, in addition to expanding sales of millimeter wave (60GHz) modular products ready for mass production,
we will develop products in the form of units that make use of antenna technologies, establish a general-purpose platform, and expand
collaborations within companies and the Group. Additionally, we expect to expand production of 24GHz sensors in 2024, after a temporary
decrease in orders from major customers due to the impacts of the economic downturn in 2023, and will work to further expand sales throughFurther, in multi-functional products, we will resolve customer system issues and create highenhanced price competitiveness.

customer value through“evolution”fusing single-function products with our various proprietary

Further, in fiscal year 2024, we will be moving forward with full-scale information gathering, planning, and verification work with the aim oftechnologies. We will improve our ability to propose application-specific integrated circuits (ASICs),

creating businesses that will follow on from these three main segments.

application-specific standard products (ASSPs), kit proposals, modularization, and other composite
technologies while attempting to strengthen the competitiveness of our modular products throughHigh

In addition to strengthening our components business, we will also promote the creation of
new business models. As part of our“renewal,”we aim to provide customer satisfaction from a systems perspective through solutions leveraging

60 GHz sensors

small-scale systems that utilize unitization (analog ICs + sensors + processors), hardware + software, AI, and other technologies. We will achievethrough the integration of our electronic device and microwave businesses.
In terms of sales, we are working to
expand business in the areas of automotive andUnit priceindustrial equipment to ensure that we have well-

Module business

MCP

ModulesPrimary mounting
technologies
Combined power supplies,
high voltage detection

ICs / Devices

PMIC, AFE, etc.

equipment, and consumer markets and achieve

24 GHzsensors

stable earnings. We will also build relationships

Marine radarwith customers who will become new strategic
IPC, optical encoder

Secondary mounting
technologies, etc.

Multi-Chip Package

Operational ampliﬁers, Integration
LCDs, etc.

partners, and strengthen the planning anddevelopment of customer-oriented, highperformance ASIC/ASSP products for automotive
and industrial equipment. We will be entering newmarkets with high-value-added products, suchas automotive power control units, using 0.18
μ m CMOS achieving miniaturization and a highSensorunits

Electronguns
CathodesKu-band (14 GHz)
medium- tohigh-output
transmitters
Ku-bandlow-output
transmitters

Focus
Focus

Forecast
for 2026

Base
StretchChallenge

Low
High

Focus

Ka-band (30 Ghz)
high-output transmitters(for base stations)

Relative market share

Low

Data Section

Single-function ICs

Multi-functional ICs(ASSP、ASIC)

balanced coverage of the automotive, industrial

Market growth rate

our transformation into an analog solutions provider through M&A and business alliances aimed at strengthening digital technologies, as well as+ software

Overview of Business Segments

Microwave Business Strategy

the triple fusion of circuit, device, and packaging technologies.

Electronic Device Business Strategy

We will revise our current product portfolio, selecting and focusing on ﬁelds that have potential
for proﬁtability and growth based on market trends.
We will create new businesses by leveraging an inventory of existing technologies and utilizing
market research and forecasting.

withstand voltage process being mass production

Functions

Shifting our portfolio from conventional product groups centered on
single functions, to product groups with high functionality.

MCP: Multi-Chip Package. A substrate that has multiple semiconductor chips or elements mounted or
built in a single package or module.

60

Sustainability

Business Strategy in the First Year of the Medium-Term Management Plan (Fiscal 2024)

Stand-alone
business

Value Creation

80

80.0

109.0

98.0

modular technologies, to realize high added value products. We will respond to increased demand by expanding Group production capacity

10

at the Yashiro Plant. Regarding production, we willconsolidate and strengthen specialized process at
the Kawagoe Plant, Yashiro Plant, and Nisshinbo
Micro Devices Fukuoka Co., Ltd., front-end plant

Sustainability Initiatives

In the Micro Devices business, we are targeting a 38,000-ton reduction in greenhouse gas emissions by2030, and systematically installing solar power generation and energy-saving equipment. We are also enhancing efforts to prevent humanrights violations in the supply chain, including ensuring that managers receive thorough harassment prevention training.

61

Connect Everything, Create Value ｜ Strategies by Business

Strategies by Business

Automobile Brakes

Strategies by Business

Precision Instruments

Quantitative Targets(Billions of yen)

200

178.5

Net sales

Quantitative Targets
Segment proﬁt margin

6.1%(Including TMD)

160

3.4%

80

56.5

40
0

2.6%
55.0

2023 Results 2024 Plan

58.0

2025 Plan

61.0

2026 Plan

Net sales

70

6

60

5

50

4

40

3

30

2

20

1

10

0

0

53.2

57.0

Segment proﬁt margin

61.0

63.0

8

6.7%

6

5.5%

4

4.1%

2

2.5%
2023 Results 2024 Plan

2025 Plan

Business Policies within the Medium-Term Management Plan

Business Policies within the Medium-Term Management PlanAs the top global supplier of friction materials that reduce impacts on the global environment, the Automobile Brakes business will continue

With the aim of expanding earnings through business and product innovations, the Precision Instruments business has formulated four basic

contributing to human safety as it strives to become the No. 1 provider of solutions to customer problems.

strategies: (1) Strengthen core businesses and product competitiveness; (2) Strengthen technological and marketing capabilities; (3) Accelerate new

In addition to reducing the unpleasantness of brake noise and other discomforts felt by drivers, we also comply with copper regulations in

02026 Planproduct development and strengthen commercialization capabilities; (4) Determine products and businesses, utilize bases. We will also focus on

the US and dust regulations in Europe, and will anticipate other environmental responses focused on achieving carbon neutrality. We will also

continuously implementing kaizen activities to strengthen our management base, conducting ROIC management to improve asset efficiency, promoting

implement cost reduction efforts to improve cost competitiveness and expand profitability.

environmental management and diversity, improving internal controls and corporate ethics, and strengthening our safety management system.

Business Strategy in the First Year of the Medium-Term Management Plan (Fiscal 2024)
In the home appliance field, which includes air conditioning fans handled by the molded products business, in 2023, orders were sluggish in JapanThe automobile industry is seeing a recovery in demand following the pandemic. Although global automobile sales have yet to reach pre-and Thailand due to excess customer inventory, as well as in China, due to a decrease in demand for commercial air conditioners. Although Japan andpandemic levels, they are on the rise, mainly in the US and China. Advances by Chinese EV manufacturers have been especially noteworthy, withThailand are expected to recover from 2024 onwards, demand in China is expected to remain at the same level in 2024 as in 2023. Meanwhile, in

EVs expanding to comprise about half the Chinese auto market.

India, in addition to promoting local procurement, it is expected that, given economic growth, demand for residential air conditioners will continue to

Demand for Nisshinbo copper-free friction materials (disc pads) continues to grow due to their compliance with US copper regulations

rise in 2024. Given this business environment, Nisshinbo will strengthen the competitiveness of existing products for existing customers by accelerating

aimed at reducing environmental impacts. Nisshinbo products already maintain a high market share, and we expect to achieve further sales

measures such as automation, labor saving, and shortening of molding cycles. Specifically, Nisshinbo Mechatronics (Thailand) Ltd. is also working to

growth through the ongoing expansion of copper-free friction material sales. In terms of our environmental initiatives, in addition to reducing

strengthen its facilities to create a production system capable of producing five million cross-flow fans per year. We are also working to bring products

greenhouse gas emissions with the aim of achieving carbon neutrality, we are also searching for and considering the adoption of alternative raw

to market in the renewable energy field, such as the development of resin blades for small wind turbines. In response to the growing need for cleanmaterials as a way to respond to future chemical substance regulations. Since fiscal 2020, we have been researching alternative methods forand comfortable indoor environments, we are developing antifouling fans, as well as molded products with integrated wiring functions that combine in-brake pad adhesives to comply with volatile organic compound (VOC) regulations, and are working to minimize the impact of these regulations

mold electronics (IM-E) 3D wiring molding technologies with injection molding technologies, insert molding technologies, and electronics technologies.

on the operations of our Chinese subsidiary.

The Nanbu Plastics Group develops business in the automotive, medical, housing, and infrastructure fields. In the automotive field, demand forcondenser lenses (PES lenses: aspherical lenses) and light-guiding lenses is increasing due to trends in headlamp design and the use of LEDs. We

and expand the sales of friction materials that comply with the next round of European emissions regulations. including EURO7, as well as various

will continue to develop and launch new products that make use of our film insert technology cultivated through the production of PES lenses andchemical substance regulations, leveraging know-how accumulated up to now, including our ability to develop friction material compositions,millimeter-wave transparent emblems.

build supply chains appropriate for each country and region, and gather information from customers. Further, in response to the recent increase

Overview of Business Segments

Given this external environment, we continue to manufacture consistently high-quality products while also promoting measures to develop

In the medical field, demand for products such as preventative and prognostic testing products is particularly strong, and we are working toin severe disasters caused by climate change, we will also work to strengthen the resilience throughout the supply chain by strengthening thecreate new revenue pillars by developing and launching new products such as medicine bottles using new manufacturing methods and implant

implementation of business continuity plans (BCPs) and business continuity management (BCM) to ensure that business can continue even in the

products made from super engineering plastics.
In the housing equipment field, demand for renovations and remodels is strong, and given that compliance with energy-saving standards will

event of a disaster.
We are currently investing in equipment to expand sales of copper-free materials, and this is expected to be largely completed by the end

become mandatory from April 2025, demand for plastic sashes and composite sashes using plastic and aluminum is expected to grow. Givenof fiscal 2024. We will make maximum use of the applicable facilities and streamline production bases, including integrating our two subsidiaries

these conditions, Nisshinbo is focusing on the automation of molding, assembly, inspection, and inspection processes, and is working to strengthen

in China, with aim of reducing production costs. We will also continue to invest in additional automation and labor-saving going forward throughcompetitiveness through improved productivity.

the expansion of new production lines focused on the development of new materials, and at the same time, we will attempt to address laborIn the infrastructure field, we will expand sales of extrusion insertions for submarine cables used in offshore wind power generation, where
demand is expected to increase in line with the expansion of the offshore wind power generation market. We are also promoting joint developments

shortages.
With regard to R&D, we will continue promoting the research and development of friction materials that comply with environmental andregulatory requirements, including products that reduce environmentally hazardous substances in line with copper regulations.
Additionally, amid the ongoing shift to xEVs, we will also focus on meeting customer needs, including eliminating noises and vibration towith customers aimed at bringing refurbished sewer pipes to market.
In the automotive field handled by the precision parts business, the number of next-generation new energy vehicles (NEVs), including the MKCx,
is on the rise as the world shifts towards NEVs. In India, the market for motorcycles and cars is expected to expand due to an increase in the numberof middle- and high-income consumers as a result of economic growth and population increases. In this context, Nisshinbo-Continental Precisionexcellent wear characteristics that suppress brake dust emissions. Materials developed have already been selected for use in numerous vehicle

Machining (Yangzhou) Co., Ltd. will work to strengthen its production technologies and quality assurance capabilities with the aim of enhancing the

programs in Japan and overseas, and are moving toward mass production.

profitability of its valve block business, while also strengthening the competitiveness of its next-generation model for NEV, the MKCx, through ongoingkaizen activities. Additionally, NISSHINBO COMPREHENSIVE PRECISION MACHINING (GURGAON) PRIVATE LIMITED will begin mass production of valve
blocks for four-wheeled vehicles in 2024, and plans to increase production to two million units per year by 2025. In addition to increasing facilities andWe are engaged in manufacturing focused on reducing environmental and energy usage, as well as theresearch and development of safe, secure, and high-quality products, with the aim of achieving carbon neutrality and reducing greenhouse62

preparing for a smooth launch, we will also focus on strengthening our quality assurance capabilities.
Sustainability Initiatives

In the Precision Instruments business, we are promoting educational activities enabling employees to understandgas emissions to zero by 2050. To utilize resources efficiently, we have also commenced efforts toward the creation of a circular economy

and disseminate the SDGs through the identification of materiality and the formulation of priority initiatives. To achieve environmental target KPIs,

while collaborating within the Nisshinbo Group.

we are working to increase the ratio of sustainable products sold, while also promoting various initiatives including the reduction of GHG emissions.

63

Data Section

ensure compatibility with new-generation vehicles that achieve a high level of quietness, ensuring stable braking performance, and providing

Sustainability Initiatives

Sustainability

Business Strategy in the First Year of the Medium-Term Management Plan (Fiscal 2024)

Value Creation

120

3.7%

(Billions of yen)7

Connect Everything, Create Value ｜ Strategies by Business

Strategies by Business

Chemicals

Strategies by BusinessTextilesQuantitative Targets(Billions of yen)

Net sales

Quantitative Targets
Segment proﬁt margin

20

17.0
11.4

10
5
0

20.0

7.0%

13.0

20.5%
12.4%

10.3%

2023 Results 2024 Plan

25

40

20

37.4

30

8

43.0

41.0

40.0

6

4.6%

3.9%

4
2

20

10

2026 Plan

Segment proﬁt margin

2.4%

15

10

5

2025 Plan

Net sales

50

0

0

-1.1%
2023 Results 2024 Plan

02025 Plan-2.0

2026 Plan

Business Policies within the Medium-Term Management Plan

Business Policies within the Medium-Term Management Plan

In the Chemicals business, amid growing calls for action on climate change, we are working to develop products that contribute to reducing

In the Textiles business, Nisshinbo will cultivate new customers such as major apparel manufacturers and retailers by promoting value togreenhouse gas emissions and conserving energy by bringing together a diverse range of specialized technologies in the chemicals field. We

customers in terms of wrinkle resistance, design, comfort, and functionality, while promoting the Shirt Revitalization Project, which creates new

aim for sustainable growth by cultivating and enhancing environment and energy-related products centered on Carbodilite, a high-performancecellulose fibers from collected discarded shirts and recycles them into new shirts. In the retail business, we will shift to an OMO business model

chemical additive that improves the durability and chemical resistance of fuel cell separators and water-based resin, and by enhancing andthat integrates physical stores and e-commerce sites. We will reform these business portfolios and steadily enhance business profitability.

Value Creation

15(Billions of yen)

30

25

expanding the profitability of thermal insulation and carbon products.

Business Strategy in the First Year of the Medium-Term Management Plan (Fiscal 2024)
After emerging from the disruptions caused by the pandemic, the domestic apparel market is expected to remain stable. However, we also anticipate

With regard to carbon separators for fuel cells, Nisshinbo will work to acquire new customers for stationary products and build a mass

the increased passing on of costs at each stage, from materials to retail, amid growing personnel expenses, high raw material and fuel costs, and risingproduction system through strengthened marketing. Amid the acceleration of global efforts to achieve a carbon-neutral, hydrogen society, fuelcosts due to a weak yen. The e-commerce market, which expanded during the pandemic, is expected to maintain steady growth, although the rate ofcell carbon separator inquiries from customers in Japan and overseas remain firm. Investment in plant expansion decided in 2022 is progressing

growth is slowing. In the global apparel market, there is a growing interest in environmentally-friendly products and manufacturing.

smoothly, with building construction and the introduction of equipment scheduled for completion by the end of 2024. We are also focusing

In this environment, the shirts segment will accelerate business expansion by launching new products such as the non-formalin APOLLOCOT

efforts on the creation of a mass production system and cost reductions, including the automation of production processes and the development

shirt and the APOLLOCOT shirt with added stain-resistance and other functional processing. We will also expand global sales by leveraging theof next-generation products. In preparation for the coming phase of market expansion, Nisshinbo is making efforts aimed at responding flexibly toenvironmentally friendly and highly transparent traceability of our in-house integrated production. TOKYO SHIRTS CO., LTD., aims to accelerate thevarious changes going forward.

transformation of its business model and enhance profitability through further streamlining of store operations and the expansion of EC and OMO sales.

Regarding the high-performance chemical additive Carbodilite, we will continue following up on large new projects while at the same time
expanding development and new applications through enhanced marketing efforts. With global environmental awareness on the rise in line with

In uniforms, amid expectations of a gradual market recovery, we will focus on increasing market share by steadily implementing pricerevisions and introducing new products utilizing newly introduced energy-saving innovative spinning machines.
In developed materials, in the Oikos non-woven fabric segment, we will focus on developing new applications for agricultural materials

there is a growing demand for the promotion and use of water-based paints and biodegradable resins. Given this environment, demand for highly

such as 100% cotton seedling pots, as well as exploring new uses for wet hand towels with added functionality. In the MOBILON field, we will

safe Carbodilite is on the rise as a material essential to resolving environmental issues. We are making efforts to realize the mass production of

acquire international certifications for products made from biomass materials and recycled environmental products and expand exports andnew, large-scale projects while achieving business growth by meeting the high demand for environmentally friendly products.

sales to the environmentally conscious markets of Europe and North America. In the elastomer field, we will continue to acquire new orders for

Regarding thermal insulation products, we aim to achieve continuous growth in the thermal insulation field and expand our businessenvironmentally friendly products through biomass and recycling efforts.
With regard to capital expenditures, at our Indonesian subsidiary, we will enhance dyeing facilities (investment amount: ¥182 million) andthe ongoing rebuilding of cold storage warehouses, the construction of a succession of semiconductor factories, and a variety of other factors.

introduce innovative spinning machines (investment amount: ¥168 million). Further, the Shirt Revitalization Project plans to introduce testingIn addition to residential applications, we are working to bring highly flame-resistant thermal insulation products to market and expand sales,

equipment, including cellulose separators and recovery equipment (investment amount: ¥77 million) as part of a demonstration project aimed atwhile also developing high-performance thermal insulation materials for the transportation and storage of next-generation energy. In addition tostrengthening the resource recycling system.

thermal insulation applications, there is growing demand for deterioration countermeasures and upgrades in the infrastructure field, including

Regarding R&D, in the Life & Healthcare domain, we are working with a wide range of partners within and outside the Group to focus on

urethane for preventing tunnel collapses, new products that contribute to measures that address the increasing severity of natural disasters, andthe environment and contribute to healthy and comfortable living. We will expand the APOLLOCOT series of products, represented by non-railway vibration-damping materials. Nisshinbo is also focusing on developing products that contribute to safety measures in the infrastructureiron shirts, and focus on developing functional processing products such as stain resistance, cooling, and non-formaldehyde as environmentallyfield, and we are expanding our business domain by promoting product development that goes beyond thermal insulation applications.

friendly next-generation products. We will also expand our range of functional products, such as non-permeable, antibacterial, anti-odor, anti-Long-term growth is expected in the semiconductor market, the main application for glass-like carbon products, driven by factors such as

virus, and 100% cotton stretch fabrics providing safety, security, and comfort.

the spread of 5G communications and the expansion of data centers in line with demand for AI and the metaverse. While focusing on future

We will also continue to take on the challenge of establishing circular economy-related businesses. In the Textiles business, we aim to

growth in demand, Nisshinbo aims to grow its business by increasing production capacity and providing key materials that support the mass

establish recycling system technologies that will enable the recycling of textile products that would otherwise be disposed of as waste, as partproduction of miniaturization processes in response to the demand for increasingly sophisticated advanced semiconductor components.

of the Shirt Revitalization Project, and we will continue to engage in R&D aimed at establishing these technologies and commercializing them as
Resilience Demonstration Project, selected in fiscal 2023.

64

In the Chemicals business, we are promoting environmental management by focusing efforts on expanding

Sustainability Initiatives

While promoting the Shirt Revitalization Project, we will continue to further improve environmental

the sales of environmentally-friendly products and working to conserve energy and improve the efficiency of production equipment. Further,

responsiveness from the perspective of manufacturing. Specifically, at our production bases in Indonesia, we are reducing the amount ofin terms of acquiring and developing human resources, we are working to strengthen the formation of diverse perspectives and internal

chemicals used through spray-type resin processing and glue-free weaving, and we are also reducing the amount of water used by recycling

Group connections by implementing work training in other departments. As a member of the Nisshinbo Group, we are also proactively

wastewater emitted during the dyeing process. We are also aiming for sustainable manufacturing processes by reducing our environmental

working to promote DEI, respect human rights, and engage in sustainable procurement.

impact through efforts that include switching to electricity generated from geothermal power and reducing CO2 emissions.

65

Data Section

part of the NEDO Feasibility Study Program, selected in fiscal 2022, and the Ministry of Economy, Trade and Industry Resource Recycling System

Sustainability Initiatives

Overview of Business Segments

concerns that include global warming, marine pollution caused by microplastics, and air pollution caused by volatile organic chemicals (VOCs),

domain into the infrastructure field. Demand for thermal insulation materials continues to increase amid the growing popularity of frozen foods,

Sustainability

Business Strategy in the First Year of the Medium-Term Management Plan (Fiscal 2024)

Connect Everything, Create Value ｜ Strategies by Business

Strategies by BusinessConnect Everything, Create Value ｜ Five-Year Non-Financial Summary

Real EstateFive-Year Non-Financial Summary

Quantitative Targets(Billions of yen)

20

12

11.2

Segment proﬁt margin
100

17.0
67.6%

16.0
64.8%

80

The TMD FRICTION GROUP S.A. (TMD), formerly a subsidiary in the Automobile Brakes business, and 21 other companies were removed from the scope of
consolidation in line with the transfer of all TMD shares on November 30, 2023. Environmental data for TMD and the 21 other companies covers the period throughNovember 2023, however, social data is not included in the 2023 data compilation. On December 27, 2023, HVJ Holdings Inc., its subsidiary Hitachi Kokusai ElectricInc., and seven other companies were included in the scope of consolidation, however, they are not included in the 2023 data compilation.
(FY)

60

26.1%

8
4

4.0

40
20

Unit

2019

2020

2021

2022

2023

Environmental Data
Greenhouse Gas Emissions (Scope 1)*(Nisshinbo Group)

Thousandt-CO2e

243.8

246.7

237.9

134.6

109.3

Greenhouse Gas Emissions (Scope 2)*(Nisshinbo Group)

Thousandt-CO2e

348.6

317.4

329.4

303.4

259.2

In the Real Estate business, we will reduce assets and actualize unrealized profits by shifting our business policy from property leasing to housing

Greenhouse Gas Emissions (Scope 3)*(Nisshinbo Group)

Thousandt-CO2e1,870.5

1,611.0

1,692.1

1,604.5

1,914.5

lots sales and systematically selling off assets. By reducing assets, we will increase capital efficiency Group-wide and contribute to enhancing

Total Energy Consumption (Nisshinbo Group) Million GJ

10.55

9.72

9.96

8.94

8.62

corporate value.

Raw Material Inputs (Nisshinbo Group)

Thousand t

284.1

229.5

264.2

204.5

251.7

Volume of Waste Generated(Nisshinbo Group)

Thousand t

59.4

53.0

55.7

51.8

52.4

Recycling Rate (Nisshinbo Group)%

Water Usage (Nisshinbo Group)02023 Results 2024 Plan

2025 Plan

2026 Plan

Business Policies within the Medium-Term Management Plan

Business Strategy in the First Year of the Medium-Term Management Plan (Fiscal 2024)
The real estate market is currently strong due to the Bank of Japan’s low interest rate policy, but a major change in direction is possible during
sense of uncertainty about future monetary policies and market conditions, we recognize that it will be important to assess each project
individually, taking into account regional disparities between urban and rural areas, the relative merits of location conditions, and other factors.

81.9

84.7

87.8

83.9

87.9

3

Thousand m

9,384

8,346

7,042

6,176

6,240

Water Effluents Discharged (Nisshinbo Group) Thousand m3

8,893

7,942

6,707

5,554

5,511

Volume of PRTR Substances Handled(Nisshinbo Group)

2,817

2,555

2,799

2,625

2,390

t

Social Data

In 2024, we expect to continue securing high profits as in the previous fiscal year, by securing stable earnings from the land, office buildings,

Number of Regular Employees(Nisshinbo Group)

People19,55020,917

20,38417,084Men (Nisshinbo Group)

People14,11815,337

14,558

11,970

Women (Nisshinbo Group)

People

5,432

5,580

5,826

5,114

People

2,954

3,055

3,363

1,982

(Graduated in Japan) (men)People

175

167

202

189

(Graduated in Japan) (women)commercial facilities and other properties leasing business, and expanding the subdivision business, including the sale of residential land.
For the redevelopment of the former Miai Plant site (Aichi Prefecture), we will continue sales of all 357 detached homes. Further, at the siteof Shibaura Nissin Building (Tokyo) owned by Nisshinbo Urban Development Co., Ltd., we are moving forward with construction plans for rental
condominiums (115 units) in collaboration with a major housing manufacturer, and plan to commence sales in 2025.

Leasing Profit (Loss) Related to Leased Real Estate, Amount on the Consolidated Balance Sheet, Fiscal Year-End
Market Price (Millions of yen)
2022

2023

Leasing profit (loss)

2,666

2,639

Amount on the consolidated balance
sheet (At fiscal year-end)

11,865

10,247

Fiscal year-end market price

27,076

14,402

Number of Hires (Regular Employees)(Nisshinbo Group)

People

42

41

58

60

Ratio of Female Managers (Nisshinbo Group)

%

6.1

6.6

7.5

7.2

Acquisition Rate of Childcare Leave (Male)(Nisshinbo Group)

%

0.0

40.0

30.0

100.0

Acquisition Rate of Childcare Leave (Female)(Nisshinbo Group)

%

100.0

100.0

100.0

100.0

Ratio of Employees Taking Paid Leave(Nisshinbo Group in Japan)

%

56.7

57.2

64.1

64.2

0

0

0

0

98.8

99.1

98.5

98.3

11

12

12

11

Number of Serious Accidents(Nisshinbo Group)
Participation rate of regular healthexamination (Nisshinbo Group in Japan)

Number ofincidents%

Overview of Business Segments

Given these conditions, in the Real Estate business, we will continuously subdivide the assets held to facilitate flexible conversion to cash.

Sustainability

the second half of the Medium-Term Management Plan period due to a shift toward tighter monetary policies. Amidst a strong and lingering

0

Governance Data (Nisshinbo Holdings)
Total directors
Outside directors(Outside director ratio)
Female directors(Female director ratio)

PeoplePeople
%

11
4

4

5

5

5

36.4

36.4

41.7

41.7

45.5

People

1

1

2

2

2

%

9.1

9.1

16.7

16.7

18.2

67

Data Section

Note: The method for calculating greenhouse gas emissions is as follows.						・Scope 1：Energy related Greenhouse Gas Emissions = Σ [Fuel Consumption × CO2 Emission Factor*1]
Non-Energy related Greenhouse Gas Emissions = Non-Energy related CO2 Emissions + Σ [Greenhouse Gas Emissions other than CO2 × Global Warming
Potential*2]*1 Emission factors based on the Act on Promotion of Global Warming Countermeasures are used. Coal, however, uses a factor calculated based on
actual calorific values is used, and 1.870 t-CO2/t is used for FY2023.
*2 Global warming potential based on the Act on Promotion of Global Warming Countermeasures.
・Scope 2：Energy-related Greenhouse Gas Emissions = Σ [Purchased Electricity and Purchased Steam Volume x CO2 Emission Factor*3]*3 Purchased electricity uses, in Japan, adjusted emission factors for each electric company based on the Act on Promotion of Global WarmingCountermeasures, and in foreign countries, the emission factors for each electric company, and if unavailable, the latest country-specific emission
factors of IEA Emissions Factors. Data for FY2021 and earlier use country-specific emission factors for each year from "IEA Emissions Factors 2021".
The emissions factor (0.0583 t-CO2/GJ in fiscal 2023) calculated by the purchaser is used for purchased steam.
・Scope 3：Calculations are based on the Basic Guidelines Related to Calculating Greenhouse Gas Emissions throughout the Supply Chain (ver. 2.6), Ministry of theEnvironment. Some information is taken from LCA results.

66

Value Creation

16

75.6%

Net sales

Connect Everything, Create Value ｜ Eleven-Year Financial Summary

Eleven-Year Financial Summary
2014.032015.032016.032017.032018.032018.122019.122020.122021.122022.122023.12¥494,350¥523,757¥533,989¥527,274¥512,047¥416,221¥509,660¥457,051¥510,643¥516,085¥541,211

187,742

209,115205,367

190,851

193,620

̶

̶

̶

̶

̶

—

Wireless and Communications

̶

̶

̶

̶

̶

90,427

152,212

144,312155,084

150,392

158,081Micro Devices

̶

̶

̶

̶

̶

53,77665,285

61,14077,37385,32980,044

Automobile Brakes

148,699

161,886

165,037

146,061

154,204

135,007

131,338

114,826

138,295

153,643

178,541

Precision Instruments

28,65528,60729,52560,68764,91862,21965,42851,41955,76853,65553,265Chemicals

8,810

8,138

8,285

9,482

11,285

8,173

9,390

9,577

11,083

12,673

11,433

Textiles

54,62951,07260,12755,842

54,63943,65949,50533,957

34,47838,33337,481

Papers

31,68531,28032,58432,647

̶

̶

̶

̶

̶

̶

—

Real Estate

10,567

9,246

8,357

8,083

8,405

4,236

11,655

20,27915,584

11,178

11,263

Other Businesses

23,56024,41024,703

23,61624,97318,72024,844

21,53822,974

10,879

11,100Operating Income (Loss)

13,175

13,744

12,617

4,890

15,085△2,505

6,482

1,248

21,78815,435

12,453Net Income (Loss) Attributable to Owners of the Company

9,011

13,693

10,775

3,574

26,352△7,182△6,604

13,54024,816

19,740△20,045

Equity¥276,865¥306,937¥284,471¥275,753¥290,434¥264,849¥252,535¥242,067¥272,631¥278,498¥276,578

Total Assets

611,310

678,486

651,793646,288

651,958

622,381

617,527

581,204

604,799

616,273

672,217

Capital Expenditures

19,89536,90922,86130,50530,10327,19932,38725,86926,48129,016

31,266

Depreciation and Amortization

21,485

23,11022,57022,26322,183

19,816

24,954

22,124

23,16525,087

25,841Net Cash Provided by Operating Activities¥26,075¥37,120¥39,566¥26,768¥32,414¥15,495¥26,249¥42,590¥39,827¥19,585¥23,512Net Cash Provided by (Used in) Investing Activities△19,862△21,271△22,793△31,429△1,797△20,723△21,759△6,321△16,767△11,692△46,512Net Cash Provided by (Used in) Financing Activities△2,321△6,238△9,044

3,595△34,784

11,935△10,065△24,230△30,818△8,88825,387¥51.60¥80.33¥67.93¥22.52¥160.59¥ △43.26¥ △39.45¥81.38¥149.08¥121.06¥ △127.61

1,369.78

1,634.07

1,472.26

1,444.94

1,659.29

1,457.26

1,431.35

1,375.19

1,556.01

1,679.53

1,595.00

15.00

15.00

30.00

30.00

30.00

30.00

30.00

30.00

30.00

34.00

36.00

Shareholders’Equity Ratio

39.1

38.2

35.9

35.5

41.2

40.1

38.6

39.4

42.8

42.8

37.3

Return on Assets (ROA)

1.5

2.1

1.6

0.6

4.1

△1.1

△1.1

2.3

4.2

3.2

△3.0

Return on Equity (ROE)

4.0

5.5

4.4

1.5

10.6

△2.8

△2.7

5.8

10.2

7.6

△7.8

Payout Ratio

29.1

18.7

44.2

133.2

18.7

̶

̶

36.9

20.1

28.1

—

Operating Results (Millions of yen)

Electronics

Value Creation

Net Sales

Sustainability

Financial Position (Millions of yen)

Overview of Business Segments

Cash Flows (Millions of yen)

Per Share（Yen）
Net Income (Loss) Attributable to Owners of the Company
Shareholders’Equity
Cash Dividends
Key Ratios（%）

Data Section

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.,
included in 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 thischange.
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.

68

69

Connect Everything, Create Value ｜ Financial Statements

Consolidated Balance Sheet

Consolidated Statement of Profit or Loss

December 31, 2023 and 2022

(Millions of Yen)

2022.122023.122022.12

Notes and accounts payable - trade¥46,880¥40,549(Millions of Yen)

2022.122023.12NET SALES¥516,085¥541,211

COST OF SALES

400,737

421,841GROSS PROFIT

115,348

119,369

SELLING, GENERAL, AND
ADMINISTRATIVE EXPENSES

99,913106,916OPERATING INCOME

15,435(Millions of Yen)

2022.122023.12

Loss on sale of non-current assets

¥318

¥24

Loss on abandonment of non-current
assets

195

245

1,384

29,704

50

368

12

—

Loss on liquidation of business

137

8,723

792

762

EXTRAORDINARY LOSSES:¥52,50223,121

26,686

Notes and accounts receivable - trade,and contract assets

Electronically recorded obligations- operating

102,978

114,613

Short-term borrowings

59,344

83,892

Electronically recorded monetaryclaims - operating

16,11516,303

Commercial papers

30,00030,000

Merchandise and finished goods

56,30458,390Current portion of long-termborrowings

46,17913,395

Income taxes payable

3,319

2,377

Provision for product warranties

1,321

1,233

Dividend income

1,291

1,030

Provision for bonuses

2,306

1,849

Provision for bonuses for directors(and other officers)

3,656

4,639

Provision for business restructuring

137

291

243

66

Equity in earnings of unconsolidated
subsidiaries and affiliates

Business restructuring expenses ofsubsidiaries

Foreign exchange gains

568

1,066

Extra retirement payments

116—

Provision for loss on construction
contracts

38

492

Miscellaneous income

2,482

2,082

Loss on revision of retirement benefit plan—

67

Provision for business restructuring

749—

Total non-operating income

8,872

9,664

Amortization of goodwill

775—

NON- OPERATING EXPENSES:

Loss related to COVID-19

92

—

4,015

40,187

INCOME BEFORE INCOME TAXES

25,758△21,895

INCOME TAXES - CURRENT

5,066

3,043

INCOME TAXES - DEFERRED

777△5,298TOTAL INCOME TAXES

5,844△2,254NET INCOME (LOSS)

19,914△19,640173

404¥19,740¥ △20,045

Work in process

55,522

66,700Raw materials and supplies

37,57544,813

Other

12,14814,158

Allowance for doubtful accounts

△779

△961

325,036

366,519

Total current assets
Non-current assets:
Property, plant and equipment

60,35659,126

Machinery, equipment andvehicles, net

58,31750,096

Land

33,817

Construction in progress

6,629

259,554

247,806

Long-term debt

10,85488,749Deferred tax liabilities

10,164967—

32,514

Provision for loss on overseas
litigation

437

—

8,561

Retirement benefit liability

42,37738,654

771

830

Other

12,823

Total non-current liabilities

15,380Total property, plant andequipment

178,103

165,679

Asset retirement obligations

TOTAL LIABILITIESIntangible assets
1,257

4,473

Other

12,618

11,573

Total intangible assets

13,876

16,046

Investments and other assets

9,580

16,176

Deferred tax assets

13,17017,370Other

16,66420,850Allowance for doubtful accounts△866△2,145

Total investments and other assets

99,257

123,971291,237

305,697¥616,273¥672,217

1,683

Total non-operating expenses

3,910

6,331

20,397

15,785

ORDINARY PROFITEXTRAORDINARY INCOME

376—

337,775

395,638

Gain on liquidation of subsidiaries
and associates
Gain on revision of retirement benefit plan

847—

Subsidy income

8563

Gain on reversal of share acquisition rights

53

30¥9,376¥2,505

196,754

171,211

Treasury stock△13,240△13,236

Total shareholders' equity

230,129

204,665

Total extraordinary income

16,702Foreign currency translation
adjustments

13,52918,215

Postretirement liability adjustments

3,451

3,808

Accumulated other comprehensive
income33,61945,93270

38

Non-controlling interests

14,67825,942TOTAL NET ASSETS

278,498¥616,273

NET INCOME (LOSS) ATTRIBUTABLETO OWNERS OF THE COMPANY

NET INCOME (LOSS)¥19,9142023.12¥ △19,640

COMPREHENSIVE INCOME (LOSS)

2022.122023.12¥21,143¥ △6,523

TOTAL COMPREHENSIVE INCOME
ATTRIBUTABLE TO:

OTHER COMPREHENSIVE INCOME (LOSS):Net unrealized (loss) gain on
available-for-sale securities
Deferred (loss) gain on derivatives
under hedge accounting
Foreign currency translation
adjustments(Millions of Yen)

(Millions of Yen)

2022.1223,923△14

NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS

Consolidated Statement of Comprehensive Income (Loss)
Years Ended December 31, 2023 and 2022

△62

TOTAL

1,692

147,831

Retained earnings

Stock acquisition rights

Miscellaneous losses

78,221

18,915

Deferred (loss) gain on derivatives
under hedge accounting

29

Total extraordinary losses△9,115

7,243

Owners of the Company

19,848△7,732△67

48

Non-controlling interests¥1,295¥1,209

7,874

6,120

Postretirement liability adjustments

1,855

361

276,578

Equity in earnings of unconsolidated
subsidiaries and affiliates

682

△656

¥672,217

Total other comprehensive income¥1,229¥13,11771

Data Section

Retirement benefit asset

537

Provision for product warranties

1,593

27,774

Net unrealized (loss) gain on
available-for-sale securities

4,619

7,277

18,878

3,152

1,680

Interest expenses

Gain on sale of investment securities

27,737

217

845

9,433

Capital surplus

68,566873

318

Share capital

60,491

Interest income

812

Shareholders' equity:

Accumulated other comprehensive
income:NON- OPERATING INCOME:

Gain on sale of non-current assets

NET ASSETS

Goodwill

TOTAL ASSETS

Total current liabilities

9,990

18,981

Total non-current assets

46,826

Provision for business restructuring

Other, net

Long-term loans receivable

437

45,631

Non-current liabilities:

Buildings and structures, net

Investment securities

417

Other

Provision for contingent loss

12,453

Impairment losses
Loss on valuation of investment
securities
Loss on valuation of shares ofsubsidiaries and associates

Overview of Business Segments¥45,172

Sustainability

Cash and cash equivalents

Value Creation

Current liabilities:

Current assets:

Years Ended December 31, 2023 and 2022

2023.12LIABILITIESASSETS

70(Millions of Yen)

Connect Everything, Create Value ｜ Financial Statements

Consolidated Statement of Cash Flows
Years Ended December 31, 2023 and 2022

Segment Information(Millions of Yen)

2022.12

Depreciation and amortization

25,087

25,841

Impairment losses

1,384

29,704

Amortization of goodwill

2,122

367

¥ △0

¥ △2,666

Proceeds from withdrawal of time
deposits

2,462

79

△22,399△25,291

Proceeds from sale of property, plantand equipment

2,095

2,459

Purchase of investment securities△221△1,229Proceeds from sale of investment
securities

9,241

3,091

Purchase of shares of subsidiaries△12—

Purchase of shares of affiliates

△108

—

Decrease (increase) in short-termloans receivable

△256

△182

Purchase of shares of subsidiaries
resulting in change in scope of
consolidation―△11,179―△10,236△2,494△1,357

Net cash provided by (used in) investing￥△11,692
activities￥△46,512

Purchase of property, plant andequipment

Increase (decrease) in liabilities for
retirement benefits△4,608△1,624

Interest and dividend income△2,164△1,875

1,680

4,619

Equity in losses (earnings) ofunconsolidated subsidiaries andaffiliates△3,656△4,639Loss (gain) on sale of investment
securities△7,277△1,593

Loss (gain) on valuation of investment
securities

50

368

Payments for sale of shares ofsubsidiaries resulting in change inscope of consolidation

Loss (gain) on sale of property, plant,
and equipment, net

△298

△48

Other—net

Loss (gain) on revision of retirement
benefit plan

△847

67

Subsidy income

△8

△563

Loss on liquidation of business

137

8,723

Business restructuring expenses ofsubsidiaries

792

762

Provision for business restructuring

137

291

6,565

△4,759△23,024△5,776

2,506△3,422Other—net△4,4105,555

Subtotal

19,27930,406

Interest and dividends received

4,173

3,906

△1,612△5,042

8

563

△662

△769

Decrease (increase) in inventories
Increase (decrease) in trade payables

Interest paid
Subsidies received
Business restructuring expenses ofsubsidiaries paid

305

Income taxes paid

△5,601△5,613

Income taxes refund

4,000

61

¥19,585¥23,512Net cash provided by (used in)operating activities

Wireless andCommunications

Micro Devices

Automobile
BrakesPrecision
Instruments

Chemicals

TextilesReal Estate

Subtotal

Other
Businesses*

Consolidated¥150,392¥85,329¥153,643¥53,655¥12,673¥38,333¥11,178¥505,206¥10,879¥516,085

803

1,213

10

393

217

27

1,381

4,046

1,816

5,862

¥151,196¥86,542¥153,653¥54,048¥12,891¥38,360¥12,559¥509,252¥12,695¥521,948

Segment profit(loss)¥4,821¥8,947¥ △4,664¥776¥2,181¥99¥8,719¥20,882¥283¥21,165

Segment assets¥174,643¥82,098¥156,344¥78,880¥12,243¥41,870¥39,240¥585,322¥35,733¥621,055

Depreciation andamortization¥4,066¥4,340¥8,849¥4,717¥348¥1,407¥833¥24,563¥220¥24,784

Increase inproperty, plant,
and equipment andintangible assets¥5,071¥4,989¥11,139¥5,002¥541¥683¥1,177¥28,605¥30¥28,635

Sales:
Sales to externalcustomers
Intersegment sales
or transfers
Total

Other:

Note: The“Other Businesses”includes business segments such as trading function of foods, industrial materials, etc. that are not included in reporting segments.

FINANCING ACTIVITIES:
Increase (decrease) in short-term bankloans—net

Reporting Segments￥16,602￥10,829

Proceeds from long-term debt

625

129,534

Repayment of long-term debt

△7,019△105,706

53

121

△980

△737

Purchase of treasury stock△10,002△2

Cash dividends paid

△5,290△5,497△190△190

Intersegment sales
or transfers

Other—net△2,685△2,962Total

Net cash provided by (used in)financing activities△8,88825,387

EFFECT OF EXCHANGE RATECHANGES ON CASH AND CASH
EQUIVALENTS

3,486

2,438

NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS

2,491

4,826

CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR

42,59645,092

4—¥45,092¥49,918

Proceeds from long-term deposits
received
Refund of long-term deposits received

Dividends paid to non-controllinginterests

INCREASE IN CASH AND CASH
EQUIVALENTS RESULTING FROMMERGER WITH UNCONSOLIDATEDSUBSIDIARIESCASH AND CASH EQUIVALENTS, END
OF YEAR

2023(Millions of Yen)

Reporting Segments
Wireless andCommunications

Micro Devices

Automobile
BrakesPrecision
Instruments

Chemicals

TextilesReal Estate

Subtotal

Other
Businesses*

Consolidated¥158,081¥80,044¥178,541¥53,265¥11,433¥37,481¥11,263¥530,111¥11,100¥541,211

543

1,256

13

330

181

21

1,341

3,688

1,941

5,629

¥158,625¥81,301¥178,555¥53,595¥11,614¥37,502¥12,605¥533,799¥13,041¥546,840

Segment profit(loss)¥4,745¥934¥4,682¥1,328¥801¥ △ 420¥8,518¥20,590¥374¥20,964

Segment assets¥324,025¥86,679¥91,403¥82,036¥11,880¥41,633¥38,278¥675,937¥40,369¥716,307

Depreciation andamortization¥4,737¥4,853¥8,087¥4,915¥420¥1,503¥808¥25,326¥203¥25,530

Increase inproperty, plant,
and equipment andintangible assets¥4,146¥7,698¥9,841¥6,007¥1,207¥714¥1,312¥30,929¥79¥31,008

Sales:
Sales to externalcustomers

Other:

Note: The“Other Businesses”includes business segments such as trading function of foods, industrial materials, etc. that are not included in reporting segments.

73

Data Section△647(Millions of Yen)

Overview of Business Segments

Provision for (reversal of) doubtfulreceivables

2022

Sustainability

Payments into time deposits

Years Ended December 31, 2023 and 2022

Value Creation￥△21,895

Decrease (increase) in tradereceivables and contract assets

2023.12INVESTING ACTIVITIES:￥25,758

Interest expenses

72

2022.122023.12OPERATING ACTIVITIES:
Income (loss) before income taxes(Millions of Yen)

Connect Everything, Create Value ｜ Key Companies in the Nisshinbo Group

Connect Everything, Create Value ｜ Major External Assessments (As of June 1, 2024)

External Assessments of
ESG Activities

MSCI ESG RATINGSCDP Climate Change 2023
CDP Water Security 2023

THE USE BY NISSHINBO HOLDINGS INC. OF ANY
MSCI ESG RESEARCH LLC 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 NISSHINBOHOLDINGS INC. BY MSCI. MSCI SERVICES AND DATAARE THE PROPERTY OF MSCI OR ITS INFORMATIONPROVIDERS, AND ARE PROVIDED 'AS-IS' AND
WITHOUT WARRANTY. MSCI NAMES AND LOGOS ARE
TRADEMARKS OR SERVICE MARKS OF MSCI.

Headquarters

Value Creation

ESG Index

FTSE Blossom Japan Sector Relative Index

Company

Main Products and Services

Japan Radio Co., Ltd.

Japan

Disaster prevention systems,
mobile communications equipment

Hitachi Kokusai Electric Inc.

Japan

Wireless communications andinformation systems, video System

JRC Mobility Inc.

Japan

Automotive radar, ultrasound sensors● Wireless and Communications

Received a 3.5-star overall rating in the Seventh Nikkei
Smart Work Management Survey
MSCI NIHONKABU ESG SELECT LEADERS INDEXTHE INCLUSION OF NISSHINBO HOLDINGS INC.
IN ANY MSCI INDEX, AND THE USE OF MSCILOGOS, TRADEMARKS, SERVICE MARKS OR
INDEX NAMES HEREIN, DO NOT CONSTITUTEA S P O N S O R S H I P, E N D O R S E M E N T O R
PROMOTION OF NISSHINBO HOLDINGS INC.
BY MSCI OR ANY OF ITS AFFILIATES. THE MSCIINDEXES ARE THE EXCLUSIVE PROPERTY OF
MSCI. MSCI AND THE MSCI INDEX NAMESAND LOGOS ARE TRADEMARKS OR SERVICEMARKS OF MSCI OR ITS AFFILIATES.

● Micro Devices
Nisshinbo Micro Devices Inc.

Japan

Electronic devices, microwave products● Automobile Brakes
Japan

Automobile brake friction materials

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

Nisshinbo Mechatronics Inc.

Japan

Molding products,
automotive precision parts

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

Japan

Urethane products,
high-performance chemical products

Nisshinbo Textile Inc.

Japan

Shirt fabric, developed materials

NISSHINTOA IWAO INC.

Japan

Textile productsTOKYO 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

Japan

Real estate operations

Nisshinbo Singapore Pte. Ltd.

Singapore

Group company support

Nisshinbo Business Management (Shanghai) Co., Ltd.

China

Group company support

Highly rated in the Toyo Keizai CSR Company Rankings (2024)
Overview of Business Segments

Nisshinbo Brake Inc.
Saeron Automotive Corporation

Sustainability

Location

FTSE Russell (trading name of FTSE International Limited
and Frank Russell Company) certifies that Nisshinbo
Holdings, Inc., has met the requirements for inclusionin the FTSE Blossom Japan Sector Relative Index basedon the results of a third-party survey and has become
a constituent of this index. The FTSE Blossom Japan
Sector Relative Index is widely used to create andevaluate sustainable investment funds and other financial
products.

Received a 4-star overall rating in the Fifth Nikkei’s2023 SDG Management Survey

MSCI Japan Empowering Women Index (WIN)THE INCLUSION OF NISSHINBO HOLDINGS INC.
IN ANY MSCI INDEX, AND THE USE OF MSCILOGOS, TRADEMARKS, SERVICE MARKS OR
INDEX NAMES HEREIN, DO NOT CONSTITUTEA S P O N S O R S H I P, E N D O R S E M E N T O R
PROMOTION OF NISSHINBO HOLDINGS INC.
BY MSCI OR ANY OF ITS AFFILIATES. THE MSCIINDEXES ARE THE EXCLUSIVE PROPERTY OF
MSCI. MSCI AND THE MSCI INDEX NAMESAND LOGOS ARE TRADEMARKS OR SERVICEMARKS OF MSCI OR ITS AFFILIATES.

● Precision Instruments

Selected as a“Company Taking on the Zero-Emission
Challenge”by the Ministry of Economy, Trade andIndustry (METI)

S&P/JPX Carbon Efficient Index● Chemicals
Nisshinbo Chemical Inc.

Selected as a 2024 Certified Health & Productivity
Management Outstanding Organization● Textiles

Nisshinbo Urban Development Co., Ltd.

2023

Selected as a“Kurumin”Certified Child-Rearing Support
Company● Other74

Sompo Sustainability Index

75

Data Section● Real Estate

SOMPO Sustainability Index

Connect Everything, Create Value ｜ Corporate Data (As of December 31, 2023)

FoundedFebruary 5, 1907

Composition of Shareholders

Common Stock¥27,774 million

Treasury stockThank you for reading the Nisshinbo Group's Integrated Report 2024.

7.2%

Securities firms

Japanese financial
institutions

2.7%

Head Office
2-31-11, Ningyo-cho, Nihonbashi, Chuo-ku,
Tokyo 103-8650, Japan

27.6%

Japanese individuals
and others

centered on the Wireless and Communications and Micro Devices business, through an introduction
to the Medium-Term Management Plan 2026, which was formulated with the aim of realizing theGroup's vision of connecting everything to create value. Additionally, to further strengthen our

24.4%

Foreign institutions

Other Japaneseinstitutions

24.2%

13.9%

40,613The integrated report focuses on explaining our business portfolio transformation strategy,

Value Creation

Employees
Parent Company 231
Subsidiaries
19,185
Total
19,416

Shareholders

Connect Everything, Create Value ｜ Integrated Report 2024 Publication

management base, we are also working to enhance the quality of information related to sustainability
management, which is based on the fundamental premise of respect and protection of human rights.
In creating this report, departments responsible for report creation and senior management
shared feedback on Integrated Report 2023 from institutional investors, incorporated their opinions

Basic Stock Information

Major Shareholders

SectorElectrical equipment

Shareholder name

Stock code

3105

trading unit

100 shares

Number of shares held Shareholding ratio(Thousand shares)（％）

The Master Trust Bank of Japan, Ltd. (Trust Account)

23,997

15.2

Fukoku Mutual Life Insurance Company

9,000

5.7

Custody Bank of Japan, Ltd. (Trust Account)

8,030

5.1

STATE STREET BANK AND TRUST COMPANY 505001

5,869

3.7

January 1 to December 31

Shareholder record date

December 31(June 30 for interim dividend)

Aya Nomura

3,884

2.4

Total shares authorized

371,755,000 shares

Teijin Limited

3,158

2.0

169,192,654 shares

DFA INTL SMALL CAP VALUE PORTFOLIO

2,840

1.8

12,077,767 shares

SHIKOKU KASEI HOLDINGS CORPORATION

2,600

1.6

Mitsubishi UFJ Trust and Banking

Japan Wool Textile Co., Ltd.

2,282

1.4

Chiyoda-ku, Tokyo 100-8212, JapanJP MORGAN CHASE BANK 385781

1,904

1.2

for dividends

Total shares issued
Treasury stock

Transfer agent(As of December 31, 2023)(As of December 31, 2023)
Corporation: 1-4-5, Marunouchi,

Total Shareholder Return (5-Year Period)（%）

Nisshinbo Holdings Inc.

180.0

TOPIX

process and published content are appropriate and honest.
My hope is that this report aids in understanding the Nisshinbo Group’s medium- to long-termvalue creation capabilities.
Masahiro Murakami

President and Representative Director
Nisshinbo Holdings Inc.

Guidelines Used to Prepare the Report“International Integrated Reporting Framework,”Value Reporting Foundation (VRF)“Guidance for Integrated Corporate Disclosure and Company-Investor Dialogues
for Collaborative Value Creation,”Ministry of Economy, Trade and Industry (METI)“Sustainability Reporting Standards,”Global Reporting Initiative (GRI)

Overview of Business Segments

Business yearwith the relevant departments to improve report content as described above. I attest that the editing

Sustainability

Number of shares perfrom the initial planning stages to ensure the report reflects the voice of the market, and collaborated(As of December 31, 2023)

Corporate Website Guidance

160.0

Sustainability

140.0

Investor Information

120.0

・ Financial results・ Integrated Report/

100.0

・ Securities Report

Annual Report

80.0

・ Presentation materials

・ Corporate Governance・ Environment
・ Social
・ Governance

Report, etc.

60.0

Data Section

40.0
20.0
0.0

18.3

18.12

19.12

20.12

21.12

22.12

23.12

（％）

18.12

19.12

20.12

21.12

22.12

23.12

Nisshinbo Holdings Inc.

60.2

77.2

58.8

69.5

78.7

93.1

TOPIX

88.1

104.1

111.8

126.0

123.0

157.7

Note: Share price index trends including dividends (March 31, 2018 = 100)76

77