Contents
01

Cover Story

02

On the cover is a picture of Midoriga Pond, the crater lake of
Tateyama, the pride of Toyama Prefecture. Our company wasborn in Toyama Prefecture and has grown into a global
company, and we are still conducting research anddevelopment as well as manufacturing various products in theprefecture.

Applicable Period
April 2021 through March 2022.
The Report includes activities and future goals for the period after
April 2022.

Editorial Policy
This is our first integrated report. This report is intended toprovide relevant stakeholders with a better understanding of ourcompany. We hope that this report will help you to be moreinterested in our business.

03

C h apter 1

Group Overview
Message from the President

03

History

07

Business Activities

09

Business Overview

14

Financial and Non-Financial Highlights

17

C h apter 2

Value Creation Strategy
Value Creation Process

19

Medium term Management Plan

21

Outline21

Strategy

22

Research and Development

23

DX (Digital Transformation)

24

C h apter 3

Sustainability
SDGs Management

25

Environment

27

Main Reference Guidelines

Contribution to Local Communities

29

Ministry of Economy, Trade andIndustry "the Guidance for Collaborative Value Creation"
IFRS Foundation "Integrated
Reporting Framework"

Human Resources

30

04

DATA
The 2030 Agenda for Sustainable Development, which includes
the Sustainable Development Goals (SDGs), was unanimously
adopted at the UN Summit in September 2015. The SDGs consistof 17 Sustainable Development Goals with 169 associatedtargets, with a commitment to "leave no one behind". Nippon
Carbide Industries aims to realize a sustainable society bycontributing to our customers' SDGs initiatives through our
products and technologies.

C h apter 4

GovernanceCorporate Governance32

Compliance/Risk Management

34

Board Members and Executive Officers

35

Global Network

37

Corporate Information / Stock Information

38

Corporate Identity

MissionCreating new value with our technological capability,
we help make society more prosperous.
The needs of customers are the starting points of our efforts.
We refine and combine the technologies we have nurtured to provide a wide range of productsthat help realize a sustainable society.

VisionA Corporate Group of Outstanding Value
Our employees all have confidence and pride in their work,
achieving real personal growth as they strive to satisfy all the persons they deal with.
They aim to make NCI a corporate Group of outstanding value to society.

ValuesSincerity

Service

We guarantee that our stakeholders will be safeand free from worries and that we completely
comply with high standards of business. We
steadfastly carry out our responsibilities withsincerity and without compromise.

Our chief thoughts are of what we can do for ourcustomers, for society, and for the future, not what
will benefit us. Being of service is our great joy.

One-NCI(Cooperating)Respecting the uniqueness of each employee, we
form into closely cooperating teams, working as one
to find solutions to all the challenges we face.

Innovation
We are not afraid of failure or change, fully exercising ourimagination and initiative to create new value for a wide
range of businesses. We continue to take up thechallenge to reach ever-higher targets.

2[Chapter 1] Group Overview

Message from the President
Striving for therealization to become"A corporate Group of
Outstanding Value"
Representative Director President
Chief Executive Officer

Sugiyama Takahisa

In issuing the Integrated Report
Our company was founded in 1935 in present-day Uozu
City, Toyama Prefecture, and began its business with the
manufacture and sale of fertilizers and chemical
products, including the production of carbide. During the
prewar and postwar periods, the acetylene induction
business using carbide as a raw material was animportant driving force of the Japanese chemicalindustry, and we have contributed to the development of
the chemical industry with the high aspiration of'conducting ultimate research on the carbide industry
and contributing to the welfare of mankind' as thefounding spirit. With the changes of our businessenvironment, the products we offer have changed withthe times, but our desire to contribute to society and thetechnology and experience we have developed through3

our many years of business have been passed down to
our current business.
Inheriting our founding spirit and desiring to be acompany with a strong presence that contributes tosociety, we have chosen the Prime Market in the newmarket structure of the Tokyo Stock Exchange, which
took effect in April 2022. In order to become a company
that can receive further support from our shareholders
on the Prime Market, we need to make our company
more widely known. Therefore, we feel the need to be
more accountable than ever before, which is why we are
now publishing our first integrated report. We hope thatyou will deepen your understanding of our Group as acompany that is appropriate for the Prime Market.

[Chapter 1] Group Overview

Looking back on the results for FY2021
In fiscal 2021, the final year of our Medium-term Management Plan "NCI-2021" (hereafter, the previous Medium-termManagement Plan), we were able to halt the decline in bothsales and profits by increasing both sales and profits
compared to the previous fiscal year. One of the factors
contributing to this result was the strong performance of theelectronic and functional products business, one of the fourbusiness segments in which we operate. Demand formaterials for semiconductors and electronic devices
increased, partly due to an increase in work from home
operations throughout Japan in the wake of the spread of
the COVID-19 infection. On the other hand, in the films andsheetings products business, compared to FY2020 when thebusiness was affected by the COVID-19 disaster, thetwo-wheeler and four-wheeler markets, the main markets forthe business, showed a recovery trend in the first half, butstalled in the second half due to the effects of the global
semiconductor shortage.
Under these circumstances, the electronic and functional
products business, the films and sheetings products
business, and the engineering business posted increases inboth sales and revenue, while only the construction materials related business posted declines in both sales andrevenue. This was due to the impact of the Tokyo Olympics
and Paralympics, which caused delays in condominium
construction and other projects compared to plans, as wellas the significant impact of the sharp rise in raw material
costs.

Formulation of the Medium-Term Management Plan "NCI KIRARI 2025"
Outline of "NCI KIRARI 2025"
In the previous Medium-term Management Plan, athree-year plan through FY2021, we were unable to achieve
our financial targets for FY2021, despite having drawn up a
growth strategy. On the other hand, we have strengthened
our financial position by lowering our debt-to-equity ratio
through a decrease in interest-bearing debt and increasing
our equity ratio, and we have achieved increased dividends.
As we are confident that the foundation for full-fledged
growth has finally been laid, we have formulated the "NCIKIRARI 2025", a four-year Medium-term Management Plan("current Medium-term Management Plan") announced in
May 2022 to take a new step toward growth. Between
FY2019 and FY2021, each of our businesses was significantly affected by external factors such as the U.S.-China
trade friction, the COVID-19 pandemic crisis, and soaring
raw material prices. However, by all rights, we must create abusiness foundation that will not be swayed by such
unforeseen external factors even if they occur. The current

Medium-term Management Plan is designed to reflect agreater awareness of our business portfolio in order toensure that our business operations will not be hindered bychanges in the environment.
Currently, the main pillar of our profit-making business isthe Electronic and functional products business, but we plan
to develop the films and sheetings products business into
the second pillar by FY2025. In the previous Medium-termManagement Plan, we limited our core businesses to theElectronic and functional products business and the films
and sheetings products business, and we sought to pursue
synergies within these two businesses. However, under thecurrent Medium-term Management Plan, we will seek topursue synergies across all four business segments, which isa difference from the previous Medium-term Management
Plan. By pursuing synergies, in FY2025, we aim for net salesof 62 billion yen, up 15 billion yen from 2021, and operating
profit of 7 billion yen, up 3.8 billion yen from 2021.

Growth Strategy
In formulating a growth strategy to achieve the current
Medium-term Management Plan, we have reviewed theGroup's mission of "Creating new value with our technological capability, we help make society more prosperous," anddefined a "more prosperous society" as "a more convenientsociety, a more secure and safer society".
Believing that the development of Electronic will contribute greatly to the realization of a "more convenient society,"
we have designated "Electronic" as a focus area andpositioned semiconductors and electronic devices as a
strategic market field. On the other hand, we have designated "Safety," which contributes to a "safer and more securesociety," as another focus area, and have identified theenvironment, life, and mobility as a strategic market sector.
By establishing these strategic market areas, we have beenable to restructure our business portfolio in a way that allows
us to diversify risks in the event of changes in the external
environment, and to supplement our business in other areas.

4[Chapter 1] Group Overview

Regional Strategy
In the previous Medium-term Management Plan, Asia was
the focus region, but in the current Medium-term Management Plan, regional strategies are defined for each strategic
market area. Japanese companies have a large share of the
raw materials and equipment used in the manufacturing
process of semiconductors and electronic devices. We
supply products to such companies and aim to continue togrow as a partner. In the mobility field, on the other hand,reflecting the fact that there are automobile plants all over
the world, we believe that responding globally, especially in
China and South and Southeast Asia, will lead to our growth.

Recently, with geopolitical risks becoming much more
apparent, events such as Russia's invasion of Ukraine andthe lockdown in China have resulted in supply chain
disruptions. Considering our responses to geopolitical risks
and supply chain risks, we have been focusing on domestic
investments since last fiscal year. Although overseas sales in
the final year of the current Medium-term Management Planare expected to increase compared to FY2021, the ratio ofoverseas sales to total sales is expected to slightly decrease
from 47% to around 45%.

Awareness of "Outstanding Value" and efforts toward improved profitability
The current Medium-term Management Plan emphasizes
not only sales expansion but also profitability enhancement.
In doing so, we felt that it was necessary to clarify thedefinition of "outstanding values" in our Group vision of "Agroup of companies with outstanding values". We defined"outstanding values" as "One & Only" in the sense that ouroutstanding values are our ability to provide unique products
and services that can only be made by our Group. We
believe that the conscious pursuit of "outstanding values"
will lead us to the creation of high value-added products,
which in turn will improve our profitability. Currently, theGroup has some products that have a high market share incertain markets, but also products that do not make a highcontribution to profits are seen here and there. We feel that
this is due to the fact that our Group's employees themselves do not properly recognize the value of our products.
Therefore, we have been trying to raise awareness of theneed to always think about "why customers purchase our
products". Rather than responding by capturing superficial
needs of customers, it is important to accurately recognize
and pursue the conditions that must never be lacking fromthe customer's point of view, out of the many conditions forpurchase.

5

However, in order for us to truly become a group ofcompanies with outstanding values, it is important to have
not only such a market-in approach, but also a product-out
approach, in which we provide value to our customers. We
have technology and experience accumulated over many
years. By analyzing the buying factors obtained from ourmarket-in approach, and then adding a product-out
approach that leverages our strengths, we aim to provide
our customers with products with outstanding values. As forpractical measures to improve profitability from a cost
perspective, starting this fiscal year, the entire Group has
been practicing business management with a stronger
awareness of the break-even point. The business structure
has been considerably strengthened by continuing to
implement the PDCA cycle, in which monthly break-evensales performance is evaluated, feedback is provided, andactions for improvement are taken. Employees now have amuch better understanding of the need to increase profitability, and we are beginning to see positive results, such as areturn to profitability in a business that was continuously inthe red during the previous fiscal year.

[Chapter 1] Group Overview

SDGs Management
At our Group, we believe that we can expand our corporate value by resolving social issues such as climate change
and human rights, which have become common awarenessin recent years. In the current Medium-term Management
Plan, we have set five Materialities (key issues) that areclosely related to the realization of our mission. One example
is our efforts toward carbon neutrality. Our customers in theengineering business are mainly in the iron manufactureindustry and the electric power industry. Customers in theseindustries face significant challenges in achieving carbon
neutrality, and are actively developing and studying technologies to reduce CO2 emissions. We intend to contribute to
the realization of carbon neutrality for such customers
through our business activities.
Human capital is indispensable to promote these businessactivities. Recognizing that increased employee satisfaction
and feeling of being rewarded is an important issue, we havea working team consisting mainly of young employees tocome up with ideas for work style reforms to become acompetitive corporate group in the new normal era. We areconfident that by implementing these ideas one by one, wewill get closer to the way our employees want to work. In
addition, we have adopted a new evaluation system this year
in order to make employees feel more rewarded for theirwork. This evaluation system is designed to reward theresults of challenges, and we hope that it will stimulate each
employee's willingness to take on new challenges in his or
her work. Further, the promotion of diversity is set as one of
the key issues in the current Medium-term Management Planof our Group as a global company. In order to incorporate
diverse ideas into management, we are working to increase
the ratio of female managers and to actively promote
non-Japanese and mid-career hires to core personnel.

Capital Strategy
Regarding capital strategy, we intend to use financial cash
flow, which is assumed to be maintained at a D/E ratio of 0.5
times or less, and operating cash flow to fund investment
cash flow and shareholder returns. Under the current
Medium-term Management Plan, a total investment of 19
billion yen is planned, an increase of 11.7 billion yen fromthe previous Medium-term Management Plan (an averageannual increase of 2.4 billion yen), of which approximately
60% will be allocated to strategic market areas. In addition,
we plan to allocate approximately 12% of the 19 billion yen
to achieve non-financial goals such as carbon neutrality and
DX. We will also strengthen R&D for continued development
into the future. We plan to increase R&D expenses by 5billion yen compared to the previous Medium-term Management Plan (an average annual increase of 700 million yen) to
12 billion yen, of which 8 billion yen will be allocated to
strategic market areas. As for shareholder returns, recognizing this as one of our highest priorities, we will aim for astable dividend payout ratio of 30% or more. The full-year
dividend per share for FY2022 is expected to be 65 yen, an
increase of 10 yen from the previous fiscal year.

Shareholder Return Policy
Dividend per share
(yen)

80

Dividend Payout Ratio

18 %

19 %

60

9%
40

36 %

Dividend Payout Ratio: 17%(average of last 5 years)

26 %
14 %

40

40

40

FY2018Results

FY2019Results

FY2020Results

65
55

30

20

0
FY2017
Results

FY2021Results

FY2022
Forecasts

To our stakeholders
Since our founding, we have experienced various hardships, but we have developed by reading customer needs
and combining them with technology to create value forsociety. As changes and uncertainties in the businessenvironment surrounding the Group continue to intensify, theGroup is committed to do our utmost for achieving "NCIKIRARI 2025" and realizing "A corporate Group of Outstanding Value that contributes to a sustainable society," which is
our ideal vision for 2030. We would like to thank all of our
stakeholders for their continued understanding and supportof our Group.

6

[Chapter 1] Group Overview

History
Since our start as a carbide manufacturer in 1935, we have overcome many changes, including postwar reconstruction andtechnological innovations, to reach where we are now. Our progress up to the present day is a history of endless gratitude forthe support and nurturing we have constantly received through "encounters" with our customers, and it is also none other thana history of technology that has continuously responded to the changing needs of each era.

1935

Nippon Carbide Industries
was founded,with its Head Office at 751, Motoshin,
Michishita-mura Shimoniikawa-gun,Toyama Pref.

1940

Our Head Office moved to 2-1,
2-Chome Marunouchi, Kojimachi-ku,
Tokyo.

1941

1947

Sanwa Kagaku Kogyou KK was
founded (renamed Sanwa ChemicalCo.).
We began production and sales ofpharmaceutical products.

Our Osaka Business Place was
opened (renamed Osaka Branch).

1936

We acquired Kokusan Hiryou KK.
Our Uozu Factory operation started(Uozu City, Toyama Pre.)We began production and sales ofcarbide and coal nitrogen.

1944

We began production and sales ofmelamine resin products.

1949

We were listed on the Tokyo Stock
Exchange.

1935

1940

1976

We began production and sales ofmarking films.

1980

We acquired equity ownership in
Hokuriku Ceramics Co., Ltd.
We entered the ceramic substratebusiness.

1985

We began production and sales ofadditives for electric materials.

1988

Establishment and Deepening of In-house Technologies

1991

1994

1993

Nippon Carbide Industries (Hangzhou)Co., Ltd. was established in China.
We developed the retroreflective
sheetings business, the sticker
business and the packaging
materials film business.

NIPPON CARBIDE INDUSTRIESFRANCE S.A.S was established in
France and NIPPON CARBIDEINDUSTRIES ESPANA S.A. wasestablished in Spain.
We entered the retroreflective
sheeting business.

NIPPON CARBIDE INDUSTRIES（NETHERLANDS）B.V. wasestablished in the Netherlands.
We developed the retroreflective
sheeting business.

NIPPON CARBIDE INDUSTRIES(THAILAND) CO., LTD. wasestablished in Thailand.
We began the sticker business.
ELECTRO-CERAMICS（THAILAND)
CO., LTD. was established in Thailand.
We developed the ceramic
substrate business.

1976

7

Expansion of new businesses/overseas development

PT ALVINY INDONESIA wasestablished in Indonesia.
We developed the sticker businessand the construction material
businesses.

1997

NCI (VIETNAM) CO., LTD. wasestablished in Vietnam.
We developed the sticker business.

1999

Our Head Office moved to 11-19,
2-Chome Konan, Minato-ku, Tokyo.
NIPPON CARBIDE INDUSTRIES(South Carolina) INC. was establishedin the U.S.A.

[Chapter 1] Group Overview

Ca r bi deCarbide is a compound of carbon and metallic element (chemical formula: CaC₂). Carbide is producedby heating quicklime obtained from limestone and coke (carbon) at high temperatures. In 1935,
Nippon Carbide Industries was founded in Uozu City, Toyama Prefecture, where a stable supply ofhigh-quality limestone could be procured and the power needed for the production could be obtained
from hydroelectric power generation using the abundant water resources. At that time, the acetylene
induction business was a promising new chemical industry.

1959

Hayatsuki Factory (Namerikawa City,
Toyama Prefecture) was constructed.

1963

We began production and sales offunctional polymers.
Our Head Office moved to 3-1,
3-Chome Marunouchi, Chiyoda-ku,
Tokyo.

Diamond Engineering Co., Ltd. wasestablished.
We began the engineering business.

1965

We began production and sales of
packaging materials films.

1962

Vinyframe
Industry Co., Ltd.
was established.
We began theconstruction
materials related
business.

1963

2011

NIPPON CARBIDE INDIA PVT. LTD.
was established in India.
We developed the sticker business.

2014

NIPPON CARBIDE INDUSTRIA DO
BRASIL LTDA. was established in
Brazil.
We developed the sticker business.

Development and Deployment of In-house Technologies

2017

We moved to the Prime Market of
the Tokyo Stock Exchange.

2022 ~©SS Corporation / Nozomu Shimao

Pursuit of "Outstanding values = One& Only"Contribute to a sustainable society
and achieve growth by pursuing
technologies of outstanding values
and providing products of outstanding
values.

Our Head Office moved to 16-2,
2-Chome Konan, Minato-ku, Tokyo.

Selection & Concentration

2022

The R&D Center was completed(Namerikawa City, Toyama Prefecture).
There were four research anddevelopment points in Janan,we
combined them into a new Researchand Development Center.

2015

2011

1969

2022

Medium-term Management
Plan "NCI KIRARI 2025" haskicked off

Toward Sustainable Growth in the New Normal Era

8[Chapter 1] Group Overview

Business Activities
We started our business based on "organic synthesis technology" in the acetylene derivative production induction industry using
carbide as a raw material. Today, with our core technologies of "resin polymerizing technology", "films and sheetings technology", and"ceramic sintering technology," we are developing four businesses including Electronic and functional products business, films andsheetings products business, construction materials related business, and engineering business.

Product flow starting with carbide
Functional chemical products are derived from lime nitrogen and acetylene, which are derived from carbide. Originally, using carbide
as a raw material, vinyl chloride and vinyl acetate were manufactured from acetylene. By polymerizing these materials, functional
polymer products were produced. The polymers of vinyl chloride and vinyl acetate became marking films and packaging films throughfilm making technology and printing technology. Further, retroreflective sheeting products were manufactured through sheetings
molding technology and precision metal mold technology. Vinyl chloride was developed into aluminum construction materials forbuildings and houses and resin extrusion molded products used in the construction materials related business. In addition, since wewere selling carbide as a desulfurization agent to steel mills, this developed into an engineering business featuring powder conveying
technology, etc.

Functional chemicals
CarbideCalcium Cyanamide

Aminoguanidine
Bicarbonate

Cyanamide

Chemicals for semiconductor materials・
Chemicals for manufacturing of electronic components
Additives forsemiconductor photoresists

Dicyandiamide

Melamine
Functional Polymers

Acetylene

Melamine resin for tableware

Vinyl ether

Electronic materials
Semiconductor cleaner

Functional Polymers

Vinyl acetate, acrylic

Thickening agents for
optical applications

Ceramic substrate forelectric materials

Raw materials for pharmaceuticaland cosmetic products

Circuit substrates forelectronic components

Films

Stickers

Packaging films
Polyvinyl chloride

Graphic stickers

Marking films

Environmentally friendly molded products

Laser marking labels

Electronic &Functional Products Business
Films & Sheetings Products Business

Retroreflective sheetings
Retroreflective sheetings for road signs

Retroreflective Sheetings for license plates

Construction Materials
Related BusinessEngineering Business
Red bold letters：
Products sold or manufactured and marketed(As of December 31, 2022)

9

Resin Extrusion Molded Products

Aluminum Construction Materials

Industrial plant design, construction, and facilities

High-strength, high-functional handrails

Carbon-neutral transition facility

[Chapter 1] Group Overview

Product lines in each businessOur business is divided into four segments, namely, the Electronic & Functional Products Business, the Films & Sheetings Products
Business, the Construction Materials Related Business, and the Engineering Business, each of which develops and manufactures avariety of products.

Electronic & Functional Products Business■ Functional Chemicals
Vinyl ether
Applications: High-performance fluorinated paints with weather resistance and stain resistance, raw materials for hologram
printing, etc.
Characteristics: There are only a few manufacturers in the world, and we offer a wide variety of products.
Growthdrivers

Growthdrivers

Chemicals for semiconductor materials/chemicals for electronic component manufacturing
Applications: Preventing metal from rusting as a surface treatment agent, and increasing the adhesion between resin and metal
to make semiconductors more resistant to impact even when they are miniaturized, etc.
Characteristics: We possess high handling technology for raw materials with unstable physical properties (cyanamide).

Additive for semiconductor photoresists
Applications: Additives for solidifying resist resins that form the image layer ofsemiconductor circuits.
Characteristics: We possesses advanced demetalization technology and holds
approximately 70% of the global market share for negative photoresist additives(according to our own research).

■ Functional Polymers
Thickening agents for optical applications
Applications: Thickening agents for polarizing plates and protective films for LCDs of TVs, smartphones, tablets, PCs, etc.
Characteristics: Thickening performance design tailored to applications and customer requirements

Raw materials for pharmaceutical and cosmetic products
Growthdrivers

Applications: Poultice, materials for mascara products, etc.
Characteristics: Registered in the "Drug Master File (DMF)" and can be supplied for products

Melamine resin for tableware
Applications: Materials for tableware used in schools, hospitals, company cafeterias, themeparks, etc.
Characteristics: Light, strong, heat resistant, and easy to color.

■ Electronic materials
Ceramic substrates for electronic components
Applications: Base substrate for chip resistors, one of the electronic components
Characteristics: We have one of the largest share with approximately 20% of the global
market share (according to our own research).
Growthdrivers

Growthdrivers

Circuit Substrates for Electronic Components
Applications: Substrates for timing devices and fuse substrates for lithium-ion batteries
Characteristics: Printing electrodes, resistive elements, protective films, etc. on alumina
ceramic substrates to make circuits.

Semiconductor Mold Cleaner

Applications: Cleaning materials for molds used in the semiconductor manufacturing
process
Characteristics: We have the largest share with approximately 50% of the global market
share (according to our own research).

10[Chapter 1] Group Overview

Films & Sheetings Products Business■ Films
Marking films
Applications: For signboards, partial coloring of train cars, and as a substitute for
automobile paints
Characteristics: We have approximately 20% in domestic market for marking films for
signboards (according to our own research).
Growthdrivers

Laser marking labels
Applications: Traceability and tamper-evident labels for automobile bodies and parts
Characteristics: We offer films for tamper-evident labels by imparting self-destructive
properties.

Packaging films
Applications: Food packaging
Characteristics: Environmentally friendly as it does not produce dioxin when burned.

■ Stickers
Graphic Stickers
Applications: stickers for motorcycles and automobiles, stickers for outdoor use
Characteristics: Flexible enough to be affixed to curved surfaces, high weather
resistance and a wide range of color variations
Growthdrivers

Environmentally friendly molded products
Applications: Emblems for motorcycles and automobiles, emblems for outdoor use
Characteristics: Flexible and excellent in following curved surfaces. Can be used forletters that are not in one continuous line but are separated one by one.

■ Retroreflective Sheetings
Retroreflection is light source reflected by the same path in which it entered.

Reflective Sheetings for Signs
Applications: Domestic and international road traffic signs, security
products for road construction
Characteristics: Retroreflecting the display portion of a sign withlight from automobile headlights improves the visibility of signs andother items for drivers at night.
Growthdrivers

Reflective Sheetings for License Plates
Applications: Automobile license plates
Characteristics: We have one of the largest share withapproximately 30% of the global market share (according to ourown research).

Aerial Display Applied to Claw Machine
A claw machine is installed at the entrance of our headquarters. While ordinary claw machines
are operated with stick levers and buttons, our claw machine is operated with a non-contact
touch panel (aerial display). The machine is very popular among visitors, partly due to its
uniqueness. This technology is based on retroreflective technology, and related products are
attracting attention in the field of entertainment as well as in the medical and food industries,
in addition to their use in automobiles and other industrial products.

11

See video here:
https://youtu.be/FU5ro5oq8ms

[Chapter 1] Group Overview

Construction Materials Related BusinessResin Extrusion Molded Products
Applications: Components for auxiliary handrails, cover components for LED lightings
Characteristics: Maximizes characteristics not found in wood or metal by simultaneously molding
resins with different and contradictory properties, such as "soft and hard" and "transparent andopaque".

Aluminum Construction Materials
Applications: Aluminum construction materials, carports, etc.
Characteristics: A wide variety of forms and colors are available to match the design taste of homes.

Growthdrivers

High-Strength, High-Function Handrails
Applications: For high-rise buildings such as tower condominiums
Characteristics: High strength to withstand typhoons and other strong winds, and a wide variety ofdesign variations.

LED Coping win Good Design Award 2022
The "LED Coping", developed by our Group company, Viniframe Industry incooperation with a partner company, has won the Good Design Award 2022.
The product, while maintaining its conventional functionality, by framingbuildings with light and serving as an eye-catcher, adds new color to thenighttime landscape.

Engineering BusinessIndustrial plant design, construction and facilities
Applications: Manufacture and delivery of special valves (flow control valves, high-temperature andhigh-pressure valves) for hot metal pre-processing facilities and molten steel refining facilities forthe iron manufacture industry, and powder coal conveying facilities for the electric power industry
Characteristics: Lump-sum contracting services for industrial plant design, procurement,
construction, equipment maintenance, etc. (EPC)

Growthdrivers

Carbon Neutral Transition Facilities
Application: Innovative development facilities for the iron manufacture industry/electric powerindustry
Characteristics: We are expanding our contribution to CO₂ emissions reduction mainly throughour high-precision powder conveying technology.

Powder Conveying Technology
The powder conveying technology of Diamond Engineering Co., Ltd., our groupcompany, is used in a variety of facilities and is a key element in the stable
operation of coal gasifiers, which is the most advanced thermal power generation
technology. In a project for a test facility where solid fuel in the form of pellets
made from waste plastics solidified from paper, fiber, and other waste materials issimultaneously blown into the gasifier with pulverized coal and gasified together,
we proposed optimal facility conditions and our proposal was adopted.

12[Chapter 1] Group Overview

Our Products for Everyday Life
Our Group's core technologies, "resin polymerization technology", "films and sheetings technology," and "ceramic sintering
technology", are at the core of our business, and the products produced through integration of these technologies have beenused throughout society and contribute to the lives of people around the world.

Motorcycles

Condominiums●Environmentally friendly molded products●Graphic stickers

Plants●High-strength,
high-performance handrails●Industrial plant design,
construction and facilities●Carbon neutral transition facilities●Semiconductor mold cleaners

Stores●Marking films

Roads●Reflective sheetings
for road signs

Automobiles

Schools and offices●Melamine resin for tableware●Reflective sheetings for license plates●Laser marking labels●Ceramic substrates for electronic components●Graphic stickers●Environmentally friendly
molded products

Hospitals

Transportation●Raw materials for pharmaceuticaland cosmetic products

・マーキングフ●Marking films
ィルム

Televisions●Circuit substrates for electronic components●Thickening agents for optical applications

Wall surfaces●Vinyl ether for paints●Ceramic substrates for electronic components

Cosmetics

Carports●Raw materials for pharmaceuticaland cosmetic products●Aluminum construction materials

Refrigerators●Packaging films

Smartphones●Chemicals for semiconductor materials●Chemicals for the manufactureof electronic components●Additives for semiconductor photoresists●Ceramic substrates for electronic components●Thickening agents for optical applications

PC●Chemicals for semiconductor materials●Chemicals for manufacturing electronic components●Additives for semiconductor photoresists●Ceramic substrates for electronic components●Circuit substrates for electronic components●Thickening agents for optical applications

13

[Chapter 1] Group Overview

Business Overview (2021)
Electronic & Functional Products BusinessBusiness Overview
Sales and earnings of functional chemicals increased from the previous fiscal year due to steady shipments of surface treatment agents for electronic components and other products in line with the booming semiconductor market. In specialtyfunctional polymers, although shipments of thickening and adhesive agents for optics-related fields remained strong, higher raw
material prices and other factors resulted in higher sales and lower profits compared to the previous year. In the electronic andfunctional products business, shipments of ceramic substrates were strong due to a recovery in demand for car Electronic
applications and electronic device-related applications, and sales of semiconductor mold cleaner were also strong due to thebooming semiconductor market, resulting in year-on-year increases in both sales and profits. As a result, the Electronic &Functional Products Business achieved year-on-year increases in both sales and profit.

Performance Trend●Net sales●Operating profit(Million yen)

(Million yen)

25,0003,000

20,00019,640 19,030
18,4342,860

20,473
17,652

2,000

1,720

15,000

1,594

2018

2019

1,000

10,000
0

1,941
1,646

2017

2018

2019

2020

2021

0

(FY)

2017

2020

2021

(FY)

Business Performance by Product Category
Unit: Million yen

FY2020Results

FY2021Results

Increase/decrease (vs. previous year) Ratio of increase/decrease (vs. previous year)

Net sales

17,652

20,473+2,821+16.0%

Functional chemicals

2,763

3,739

+976

+35.3%

Functional polymers

8,192

9,560

+1,368+16.7%

Electronic materials

5,967

7,174

+1,207+20.2%

Adjustment

730

Operating profit

1,941

▲0

2,860

-

-

+919

+47.4%

Functional chemicals Increased incomes and profits++

Increase in shipments of photoresist additives and surface treatment additives due to buoyancy in the semi-conductor market.
Increase in shipments of vinylether mainly due to recovery in the construction market in Europe and the USA.

Functional Polymers Increased incomes and decreased profits+ Increase in shipments of thickening agents for the optical sector.
+ Increase in shipments of binder polymers for electronic materials due to buoyancy in the semiconductor market.
− Increase in costs due to rising naphtha prices.

Electronic materials Products Increased incomes and profits+ Increase in shipments of ceramic substrates, thick film printing substrates, and semiconductor mold cleaner due to buoyancy in the electronic
component and semiconductor markets.
+ Increase in shipments of ceramic substrates due to investment in additional facilities in Thailand.

14

[Chapter 1] Group Overview

Films & Sheetings Products BusinessBusiness Overview
In the films business, sales and profits increased from the previous fiscal year due to strong shipments to the automobile
industry, but slowed down in the second half of the fiscal year due to the impact of a decline in automobile production caused
by a shortage of semiconductors. The sticker business posted year-on-year increases in both revenue and profit due to therecovery of the motorcycle market in Southeast Asia and Brazil. In the retroreflective sheetings business, shipments for license
plates in Europe were strong, but higher raw material prices and other factors resulted in higher and lower profits compared tothe previous fiscal year. As a result of the above, the films and sheetings products business posted year-on-year increases inboth sales and profit.

Performance Trends●Net sales●Operating profit(Million yen)

(Million yen)

20,00016,042

16,36915,61415,0002,000

16,172

1,612

13,826

1,418

1,500
10,000

689

1,000
5,000

0

2017

2018

2019

2020

2021

0

(FY)

11
2017

2018

2019

2020

285
2021

(FY)

Business Performance by Product Category
Unit: Million yen

FY2020Results

FY2021Results

Increase/decrease (vs. previous year) Ratio of increase/decrease (vs. previous year)

Net sales

13,826

16,172+2,346+17.0%

Films

2,342

2,759

+417

+17.8%

Stickers

4,525

5,270

+745

+16.5%

Retroreflective sheetings

6,773

8,144

+1,371+20.2%

Adjustment

-

-

-

Operating profit

11

▲1

+274

+2499.6%285

Films Increased incomes and profits+ Increase in shipments of marking films and laser marking labels due to the recovery of the automobile market in Q1 and Q2.
- Decrease in shipments of the above products due to the impact of automobile production cuts caused by the shortage of semiconductors and otherfactors in Q3 and Q4.

Stickers Increased incomes and profits+ Increase in shipments of materials for motorcycles in South-East Asia and Brazil due to recovery of the motorcycle market. In addition, shipments to thedomestic and North American automotive markets began in Thailand.
- Social distancing policy due to the Covid-19 crisis in Vietnam has led to a decline in shipments of materials for motorcycles.

Retroreflective Sheetings Increased incomes and decreased profits+ Increase in shipments of materials for car number plates to Europe and China due to recovery in the car market.
- Increase in costs due to higher raw material prices and higher freight costs caused by global container shortages.

15[Chapter 1] Group Overview

Construction Materials Related BusinessBusiness Overview
Incomes decreased with a steady decrease in the sales of aluminum construction materials, the mainstay of the company, due
to delays in condominium construction plans as a result of the Covid-19 crisis and the Olympic and Paralympic Games. Profits
in this segment decreased partly affected by the rise in aluminum metal prices.

Performance Trends●Net sales●Operating profit(Million yen)

(Million yen)

12,00010,363

9,766

600

9,259

8,397

8,000

7,507

2018

2019

2020

2021

515

(FY)

0

279

207

200

2017

491

400

4,000

0

552

2017

2018

2019

2020

2021

(FY)

Engineering BusinessBusiness Overview
This segment saw a year-on-year increase in due to an increase in the completion of construction projects for the domestic
market, and profit increased due to the effect of increased revenue as well as lower manufacturing costs.

Performance Trends●Net sales●Operating profit(Million yen)

(Million yen)

6,000

5,625

300

4,808

4,894
4,035

4,500

4,257
200

128

3,000

0

2017

2018

2019

2020

2021

(FY)

0

76

73

100
1,500

82

2017
2018

2019

2020

2021

(FY)

-100

-200

-300

312
16

[Chapter 1] Group Overview

Financial and Non-Financial Highlights●Net sales●Sales Ratio by BusinessEngineering Business(Million yen)

50,00050,761

48,651

46,69942,231

Construction
Materials
RelatedBusiness

47,003

Electronic & Functional
Products Business

6.2%
15.9%

Net sales

47billion yen 43.5%*FY202125,000

34.4%

0

2017

2018

2019

2020

●Ordinary revenue/Net revenue attributable toowners of the parent company●Operating Profit/Operating Profit Margin
Operating Profit

Operating Profit Margin(Million yen)

4,000

6.8
5.4

3,232

2,649

5.5
2,557

5.7

7.0

2017

2018

2019

4,055
3,375

3,119

2,852

2,817

2,736

2,406

2,388

2020

2021

3.5

2,000

(FY)

0

●ROE/ROAROE

Net revenue attributable to owners of the parent company

4,000

3,192

2,000

0

Ordinary revenue

(%)

6.4

Films & Sheetings
Products Business

(FY)

2021

1,800

2017

2018

2019

Dividends

(%)

(Yen)

12.9
12.0

Net revenue per share

7.7

7.2

219.95

240

17

2017

18

160

4.5
2.9

2.9

2018

2019

3.8

2020

3.0
2021

80

(FY)

0

(%)

40

282.98

6.7

0

(FY)

334.27

320

3.0

2021

Dividend payout ratio

9.4

6.0

2020

●Dividends / Net revenue per share /Dividend payout ratio

ROA

9.0

1,930

1,741

9

211.4926

212.57
19

20

14

30

40

40

40

2017

2018

2019

2020

30

55

10

2021

(FY)

[Chapter 1] Group Overview●Capital investment
Consolidated●R&D expenditure

Non-consolidated (Domestic)(Million yen)

(Million yen)

2,942

3,000

2,418

1,835

2,000

2,104

2,025

2,024

2,019

2018

2019

2020

2021

3,574

3,589

2,367

1,813
1,500

1,303

1,195

1,396

1,366

1,000

1,031

782

0

2017

2018

2019

2020

●Cash Flow Trends

Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities(Million yen)

0

(FY)

2021

2017

●Number of Employees
Consolidated

Non-consolidated(Number of Employees)

5,895

5,000

3,451

4,297

3,790

3,740

3,529

3,597

3,000

2,736

2,500

(FY)

1,034

2,000

0
1,015

-2,500-5,000

1,784

425

503
1,261

1,047

1,902

1,000

2,360

4,210

2017

2018

2019

2020

●Annual Leave Acquisition Rate (Note 1) (Note 2) (Note 3) (Note 4)
Non-consolidated

02021 (FY)

Average in manufacturing industry (300~999 employees)

427

444

468

476

494

2017

2018

2019

2020

2021

(FY)

●Frequency of occurrence of industrial accidents (Note 5) (Note 6)
Consolidated

Average in manufacturing industry (100 or more employees)

(%)

80

74.6

77.0

82.5
77.2

60

55.0

53.1

56.3

1.5

70.8

1.20

60.7

1.0

1.20

1.21

1.02

40
0.5

0.61

0.5

20

0.13
0

2017

2018

2019

2020

2021

(FY)

0

1.31

2017

2018

0.25

2019

0.39

2020

2021

(FY)

(Note 1) "Usage Rate" is total number of days of annual paid leave acquired/total number of days granted x 100 (%). (Note 2) "Usage Rate" is the number of days actually acquired in a single year.
(Note 3) "Number of days granted" excludes the number of days carried over. (Note 4) Source: [Ministry of Health, Labor and Welfare] General Survey on Working Conditions: Manufacturing Industry (300-999
employees) (Note 5) Source: [Ministry of Health, Labor and Welfare] Survey on Industrial Accidents for 2020/2021 (Survey on establishments (with 100 or more employees) and survey on general construction)(Note 6) Number of fatalities and injuries due to industrial accidents per million total working hours.

18[Chapter 2 ] Value Creation Strategy

Value Creation Process
The NCI Group is committed to creating values through its business and corporate activities in order to contribute to asustainable society. Under the Medium-term Management Plan "NCI KIRARI 2025," we have defined focus areas andstrategic markets as our growth strategy and are promoting our business plan.

Inputs*Numbers are consolidated

Financial Capital
Adequate financial strength
Net assets: 32,049 million yen
Equity ratio: 47.0%

Manufacturing Capital

Medium term Management Plan

NCI KIRARI 2025
Business
Segment

Global manufacturing base structure
Number of overseas manufacturing bases: 7
Number of domestic manufacturing bases: 8Intellectual CapitalCore technologies: Resin polymerization
technology, films and sheetings technology,
ceramic sintering technology
Number of registered patents: 685

Human Capital

Electronic andFunctional Products

Films and
Sheetings Products

Construction
Materials Related

Engineering

Diverse human resources to support value creation
Total number of employees: 3,495
Number of employees at overseas offices: 2,327
Ratio of female employees: 41% / Ratio of female managers: 13%

Social Capital
Long-standing relationships of trust cultivatedwith stakeholders and local communities ineach country
Wide range of business partners: semiconductors,
electronic devices, automobiles, pharmaceuticals, steel,electric power, construction, etc.
Number of business partners: Approximately 5,000
companies

Natural Capital
Energy consumption

Total electricity consumption: 114,896 MWh

19

Initiatives to Support
Growth Strategies

[Chapter 2] Value Creation Strategy

Pursuit of "Outstanding values= One & Only"

Value Creation

Contribute to a sustainable society and achieve growthby pursuing technologies of outstanding values andproviding products of outstanding values.

Economic Value(FY2025 plan)

Focus
area

62billion yen

Net sales

Electronic

7billion yen

Operating profit
ROE

12% or more

D/E Ratio

X 0.5 or lessElectronic
Components

Semiconductors

SafetySocial Value●Through business activities●

Environment

Life

Mobility●●

Development of social andindustrial digital infrastructure

Realization of healthy living anda safe and secure society
Achieving carbon neutrality●Through corporate activities●

Reinforcementof R&D
Structure

Promotionof SDGs
Management

Promotionof DX
measures●●

Achieving carbon neutrality

Coexistence and co-prosperity
with local communities
Increased employee satisfaction and feelingof being rewarded20[Chapter 2] Value Creation Strategy

Medium term Management Plan
Medium term Management Plan "NCI KIRARI 2025"

O u tl i n e
We have formulated the Medium-term Management Plan "NCI KIRARI 2025" in order to realize what we want to be in 2030, "A
corporate group of outstanding value that contributes to a sustainable society". During the implementation of the previous
Medium-term Management Plan "NCI-2021," the environment surrounding society and our Group changed drastically due tothe U.S.-China trade friction, the COVID-19 pandemic crisis, and other factors. Under "NCI KIRARI 2025," we will contribute toa sustainable society in the new normal era and achieve growth through the pursuit of outstanding technologies and theprovision of products of outstanding values.
What we want to be in 2030

A corporate group of outstanding valuethat contributes to a sustainable society
New Medium-term Management Plan "NCI KIRARI 2025" has been establishedwith an aim at "Sustainable Growth in the New Normal Era"

Pursuit of "Outstanding values = One & Only"
Contribute to a sustainable society and achieve growth by pursuing technologies
of outstanding values and providing products of outstanding values.

Financial Targets

Growth Image

The company aims to achieve net sales of 62 billion yen in FY2025, up

The four-year growth image for "NCI KIRARI 2025" is to focus on

from 47 billion yen in FY2021, and operating revenue of 7 billion yen in

improving profitability along with sales growth, aiming to increase

FY2025, up from 3.2 billion yen in FY2021. The operating revenue target

operating profit by 2.2 times compared to FY2021.

figure is 1.5 times the previous record operating revenue of 4.7 billion
yen, which was recorded in FY 2007.

Electronics & Functional Products BusinessEngineering Business

Films & Sheetings Products Business

Adjustment

Construction Materials Related BusinessNet sales

Operatingprofit21

FY2021 Results

FY2025 Targets

47 billion yen

62 billion yen

3.2 billion yen

7 billion yen

1.5 times the record
operating profit(4.7 billion yen)

ROE

6.1%

12 % or more

D/E Ratio

X 0.48

X 0.5 or less

Unit: Billion yen

Operating Profit

Net Sales

470
43
75
162

520
56

620
40

100

70

84
180

205

230

-15

-30

FY2021Results

FY2022
Targets220
3260

FY2025
Targets

32 1
3

3

34 1
6

6
23

29

34

49

-3

-10

-13

FY2021Results

FY2022
Targets

FY2025
Targets5

[Chapter 2] Value Creation Strategy

S tr a teg y
Chemical electronics materials used in the manufacturing process of semiconductors and electronic devices that make theworld more convenient. Film materials that play an active part in the drug substance and safe-mobility markets that contributeto the safety and security of the world. We have designated these products, which are the Group’ s strengths, as growth
drivers, and have set "Electronics" and "Safety" as our focus areas.

Electronics

Focus area
Strategic
MarketSafetyElectronic
Components

Semiconductors

Business growth by strengthening our ability torespond to high value-added products inhigh-growth markets.

GrowthStrategy

Initiatives to
Support Growth Strategies

Life

Environment

Mobility

Improved profitability by deploying engineering
technologies and establishing a solid businessfoundation.

Reinforcement of
R&D Structure

Promotion of
SDGs Management

Promotion of
DX Measures

Strategies in Focus Areas

Electronics

SafetyFor chemical electronics materials, which support high functionality
in semiconductors and electronic devices, we aim to expand thescale of business by further improving the level of technology andexpanding supply capacity.

We aim to contribute to the development of a safe, secure andsustainable society through high value-added film functions and theapplication of engineering technology to carbon neutral transitions
in order to respond to external environment.

External Environment
Growing demand forsemiconductors andelectronic device
due to the spread of
5G and IoT and theevolution of ICT
technologies.

Growing demand for
car electronics withthe development of"CASE" and "ADAS".

External Environment

Growing demand for
consumer products
represented by PCs,
smartphones, game
consoles, etc. in the
New Normal.

Environment

Life

Mobility

Growing interest in anddemand for SDGs &carbon neutrality.

Global aging/
Extension of healthy
life expectancy

Evolution of automated driving
technology
Development of transportation
infrastructure in emerging
countries

Examples of specific strategies
Focus resourceson existing
growth drivers●Chemicals forsemiconductor materials●Chemicals for
manufacturing ofelectronic components●Additives forsemiconductor
photoresists●Semiconductor moldcleaner●Binders for electronic
components●Circuit boards substrates
for electronic components

Examples of specific strategies

PromoteCommercializationof next-generation
growth drivers

Strengthen R&D
capabilities tocreate new
growth drivers●Next-generation
prismatic retroreflective sheetings●Materials for all
solid-state batteries●Ultra-low metal, highpurity products

Deployment ofengineering
technology●Carbon neutraltransition facility●Prism sheet ings foraerial displays

Performance Image of Strategic Markets

Net Sales

45
85

65
95

●Environmentallyfriendly decorative
molded products●Next generation highfunctional films●Retror eflective sheet
ings for license plates

Sales

Safety (environment, life, mobility)

160●Drug substances●Raw materials for
medical and cosmetic
products

Multi-functionalandhigh-functionalfilms and sheets

Unit: Billion yen

Electronics (semiconductors, electronic Components)

130

Development of
new products
and technologies
to improve
quality of life

1.9x
sales

in strategic
markets

250
110
140

FY2021 Results

FY2022 Targets

FY2025 Targets

Sales Ratio

28%

31%

40%

Operating Profit

18

24

50

2.8x operating profit in strategic markets

We target the sales of 11 billion yen in the "electronics(semiconductors, electronic devices)" strategic market,
14 billion yen in the "safety (environment, life, mobility)"
strategic market, and combined sales of 25 billion yen forthe strategic markets as a whole FY2025, as compared
to 13 billion yen in sales for FY2021.

Sales Ratio/Operating Profit

By achieving 1.9 times sales, we aim to increase the ratioof sales in all strategic markets as a percentage of total
sales from 28% in FY2021 to 40% in FY2025. In
addition, we aim to achieve an operating revenue of 5billion yen for the strategic markets as a whole in
FY2025, 2.8 times the 1.8 billion yen achieved in FY2021.

22

[Chapter 2] Value Creation Strategy

Regional Strategies
In view of the need to address country and supply chain risks, the ratio of overseas sales to total sales is expected to fallslightly from 47% in 2021 to 45%.
Japan: Electronics
Japanese companies with high technology level have large shares in semiconductor material and electronic component markets, and
our Group will continue to aim for growth in the electronics field as a partner company.
China/South Asia & Southeast Asia: Safety, Electronics
Mobility-related business will be developed with an eye on the global market due to the progress of global motorization. In China, wewill fully utilize our local production bases to meet the needs of thickening and adhesive agents for the electronics field.

Capital Investment
We plan the total investment during the period of the present Medium-term Management Plan to be ¥19 billion, with averageannual investment doubling from the previous Medium-term Management Plan period to 4.8 billion yen. As a breakdown, weplan an aggressive investment of 11 billion yen in strategic markets of electronics and safety. In addition, we plan to invest
about 12% of our total investment of 19 billion yen in DX and carbon neutrality.
Unit: Billion yen

190

Strategic Investment
Renewal Investment

Average annual
Investment ofCapital Investment
in Strategic Markets

Major Investment Plans

40

73
29

Average annual
Investment of

2.4

billion yen

150

4.8

billion yen

44Previous medium-term
management plan results
CapitalInvestment in
Strategic Markets

3 billion yen

SafetyExpansion of films and sheetings production
facility (FY2022)
Introduction of films and sheetings production
automation equipment (FY2024)

NCI KIRARI 2025
FY 2022-2025

FY2019-2021

Electronics
Expansion of facility for chemicals forsemiconductor materials (FY2023)
Expansion of facility for circuit board forelectronic components (FY2023)

11 billion yen

R&D
Reinforcement of R&D Structure is one of the pillars of efforts to support the growth strategy in the Medium-term Management
Plan "NCI KIRARI 2025".

Reinforcement of R&D Structure
We will promote the development of new products, particularly in strategic markets, with the aim of increasing the ratioof new product sales and the ratio of new product sales in strategic markets.

15 %New product sales ratio

7%
FY2021

23

or moreFY2025 Targets

New productsales ratio in
strategic markets

35 %

25%

or moreFY2021

FY2025 Targets

[Chapter 2] Value Creation Strategy

R&D expenditure
We plan to make investment of 8 billion yen in R&D expenditure for strategic markets over 4 years starting in 2022.

Actual and Targeted R&D Expenditures
Electronics and functional products business related
Films and sheetings products business related

R&D expenditures that do not belong
to any specific business
Unit: Billion yen

120

Annual R&D
expenditure
Average70

Construction materials andengineering business related

2.3

34
44

23
Previous Medium-term Management Plan results

NCI KIRARI 2025

(FY2019-FY2021)

R&D expenditures
for strategic markets

3billion yen

26
16

billion yen

17
8
22

Annual R&D
expenditure
Average(FY2022-FY2025)

4.2 billion yen

8 billion yen

DX (Digital Transformation)
By promoting DX as a pillar of initiatives to support our growth strategy, and adapting "quickly" to the changing businessenvironment and establishing a competitive advantage, we aim to achieve the goals of the Medium-term Management
Plan "NCI KIRARI 2025".

DX Grand Design
Upholding the DX visions of "Provide necessary data when it is needed. Transformation to speedy business management.", "Active useof ICT and digital data. Improvement of productivity and quality, and strengthening of product development drive.", "Transition tohigh-value-added operations and enhanced work-life balance", under the DX Promotion Structure directly under Management, we will
work on data platform development, DX human resource development, and realization of DX corporate culture

DX
VisionAdapt “quickly” to changing business environment
Provide necessary data when it isneeded.
Transformation to speedy business
management.

Transition to high-value-added
operations and enhanced work-lifebalance.

DX Grand Design

DX
Plan

DX
SystemActive use of ICT and digital data.
Improvement of productivity andquality, and strengthening of productdevelopment drive.

Management

Sales

Production

R&D

Back Office

Speed-up ofManagement

Strengtheningof sales capabilities
through businessintelligence

Smart Factory

Speed-up of R&D

Restructuringof operations

DX Promotion Structure directly under Management
Data platform development

DX human resource development

Realization of DX corporate culture

24[Chapter 3] Sustainability

SDGs Management
Under the mission "Creating new value with our technological capability, we help make society more prosperous", ourGroup regards the SDGs (Sustainable Development Goals) adopted by the United Nations as important targets andcontinues to contribute to a sustainable society in the future by providing a wide range of valuable products through themastery and integration of accumulated technologies.

5 Materialities
In view of the changing interests and needs of society, five Materialities (key issues) have been identified that are closely
related to the realization of the Group's mission.

Development ofsocial andindustrial digital
infrastructure

Our Mission

Realization ofhealthy living
and a safe
and securesociety

Achievingcarbonneutrality

Coexistence andco-prosperity
with local
communities

Increased feelingof satisfaction
and reward
for employees

Creating new value with our technological capability, we help make society more prosperous.

Establishment of SDGs Promotion Project
We have established a project to promote the SDGs, withthe president as project leader, directors who also serveas executive officers as subcommittee leaders for each
Materiality, and the participation of senior managementfrom each division. Meetings are held once a month toensure Group-wide awareness of SDGs management andto discuss specific goals, plans, and measures to realize
Materialities.

25

Project Leader (President)
Sub-leader (Director)
Members of each subcommittee
General Manager of each division,
general manager of each administrative division,president of each Group company

[Chapter 3] Sustainability

Business and corporate activities with respect to the five Materialities

Approach to Materiality

Business and Corporate
Activities of the Group

Development ofsocial andindustrial digital
infrastructure

In order to meet the society's needs to
respond to the new normal, promote DX,
develop automated driving and control
technologies, and develop an ICT society,we will contribute to the development ofindustrial infrastructure by providing
materials for semiconductors, substrates
for electronic devices, high-intensity
reflective sheets, and other components.

●Materials for semiconductors●Substrates for electronic
devices●High-intensity retroreflective sheets

Realization ofhealthy living
and a safe
and securesociety

In order to meet the society's needs tocope with infectious diseases and extend
healthy life expectancy, we will contributeto healthy living through drug substancesand binders for medical and cosmetic
products. Further, we will also contributeto the realization of a safe and securesociety through products such as
high-strength, high-functional construction
materials and retroreflective sheetings.

●Drug substances●Binders for medical andcosmetic products●High-strength, high-functional construction materials●Retroreflective sheetings

Achievingcarbonneutrality

In response the global challenge ofachieving carbon neutrality, we will makecontributions through powder conveying
technology at the carbon-neutral
engineering facilities. Further, in response
to society's needs for consideration for thenatural environment, reduction ofenvironmental impact, and disclosure ofenvironmental indices, we will makecontributions through initiatives such as
switching to energy-efficient equipment,
use of renewable energy, reduction ofgreenhouse gas emissions, andcompliance with the TCFD.

●Carbon-neutral engineering
facilities●Use of renewable energy●Reduction of greenhousegas emissions●Compliance with the TCFD

Coexistence andco-prosperity
with local
communities

In response to the society's needs forrevitalization of local community, creationof local employment, and addressing
environmental issues in local community,
we aim to be a corporate group trusted by
the community by fulfilling the rolerequired by the community throughinitiatives such as contribution tocommunity interaction and safety andsecurity in community.

●Securing employment inlocal community.
●Recognition of NCI throughcommunity interaction●Elimination of environmental accidents

Increased feelingof satisfaction
and reward
for employees

We will implement measures to meetsocial needs including but not limited tohuman capital management, achieving
work-life balance, promotion of diversity,and promotion of health management, andaim to be a company where each
employee is highly productive andachieves a high level of customer
satisfaction as well as their own
satisfaction.

●Increasing value throughhuman resources development.
●Appropriate staffing andwork style reform.
●Use of personnel of diverse
nationalities, genders andages.
●Development of a safe andsecure working environment.

Materiality

RelatedSDG Targets

26[Chapter 3] Sustainability

Environment
Environmental
PolicyCommit itself to action to protect the global environment,
and make every effort to protect the environment
in all of its corporate activities.

Based on this environmental policy, our Group's code of conduct regarding the environment, which all directors and employees mustcomply with, is "In addition to complying with environmental laws and regulations, we shall always pay attention to environmental
prevention and cooperate with company's measures to reduce environmental impact at every stage such as technology development,
product design, procurement, production, sales, transportation, use and disposal and collection."

Initiatives toward realization of carbon neutrality
Our Group aims to reduce CO₂ emissions and achieve carbon neutrality as part of its efforts to prevent global warming.
By promoting initiatives such as the use of renewable energy from solar power generation and other sources, promotionof process efficiency reforms, recovery and reuse of waste heat, fuel conversion, switching to energy-efficient equipment,
and conversion to green power, we aim to reduce CO₂ emissions by 46% from the fiscal 2013 level by FY2030 and to
become carbon neutral by 2050.
Solar panels installedat Uozu Factory

CO₂ Reduction Target in our Group
110,300

81,191

89,41450,700t CO₂(46% reduction)

FY2013

FY202059,600Aiming forcarbonneutrality
by Year 2050

FY2030FY2050

FY2021

Solar panels installed
at a factory in Thailand

Disclosures of Information on Climate Change Response
In accordance with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), theGroup conducts appropriate information disclosures on "Governance," "Risk Management," "Strategy," and "Indicators and Targets". By recognizing and analyzing the risks and opportunities of climate change, we will take concretemeasures and take action toward the early realization of a decarbonized society.

Governance
Out Group has a system under which important issues such as minimizing the impact of climate change and policies for dealing withclimate change-related issues are appropriately addressed by the TCFD Promotion Team established within the Risk Management
Committee. The TCFD Promotion Team is a working-level discussion and response organization for climate change-related issues, andis composed of members of the Corporate Planning Department and other divisions promoting climate change measures. The results of
the TCFD Promotion Team's deliberations are reported to the Board of Directors after deliberations at the Risk Management Committee
and other meetings attended by all executive officers. The Board of Directors receives the reports and conducts monitoring on a regularbasis and is continuously involved in activities aimed at addressing climate change and achieving GHG reduction targets.
Risk Management
Committee

27

TCFD Promotion Team

Deliberations

Board ofDirectors

Activities for Climate Change
Response and GHG Reduction

[Chapter 3] Sustainability

Risk Management
The Group manages risks related to climate change appropriately by centrally identifying and assessing risks together
with other risks that may have a significant impact on management, and taking countermeasures according to priority.

Strategies
The Group aims to grow sustainably with society through mitigating the effects of climate change and contributing tosolving climate change-related issues, and recognizes that responding to climate change is an important management
issue. Since the effects of climate change will become apparent over a long period of time and will be affected by global
trends in global warming prevention, there are various scenarios when considering responses to climate change. The
Group has examined risks and opportunities for the "4°C" and "<2°C" average temperature scenarios, which are representative scenarios at present. The Group will continue to mitigate risks by responding to changes in global warming
policies in a timely manner, and aim for sustainable growth and increased corporate value through efforts to contribute tofurther mitigation of the effects of climate change.

Type

Description
Policy andRegulation
MarketTransition
riskTechnology
Reputation

Physical
Risk●Increased energy and raw material costs due to the introduction of a carbon tax

Impact●Increased costs to meet GHG reduction targets, such as capital investment costs

Medium●Intensifying technological and cost competition with competing manufacturers
to establish new manufacturing methods for key products

Medium●Increased response costs due to the introduction of new energy-saving
and renewable energy technologies●Increase in R&D costs for new technologies, etc.
●Decrease in demand for products using non-sustainable raw materials due
to increased awareness among client companies

MediumSmall

Chronic●Lowered productivity due to increased heat stroke and global warming-related illnesses causedby rising average temperatures

Acute●Damage to production facilities, impact on procurement of raw materials and deliveryof products, suspension of operations and reduction in production due to severe climate disasters

Large

Resource
Efficiency●Decreased energy costs due to introduction of new energy-saving
and renewable energy technologies

MediumReputation●Strengthened competitiveness through increasing use of raw materials
with consideration for environmental aspects and switch to a product lineup
with high added value in terms of environmental aspects

MediumOpportunities●Inundation of production facilities and disruption of supply chains caused by floods

Large●Expansion of EV-related demand

Products,
Services,
etc.

●Increase in demand for all solid-state batteries●Increase in demand for decarbonization facilities and zero-carbon steel●Increase in demand for hydrogen fuel production facilities

Medium●Increase in sales of product lines with insulation and blocking effects,
and medical and disease testing products that contribute to the treatment of diseases

Indicators and Targets
Scope

1

Scope

2

Initiatives toward reductionof CO₂ emissions
by 46% (compared to FY2013)

Initiatives toward achievingcarbon neutrality

FY2023Scope

3Initiatives toward reduction in GHG emissions

FY2050We have set our GHG emission reduction targets for Scope 1
and Scope 2 as 46% reduction of CO₂ emissions in FY2030(compared to FY 2013) and carbon neutrality in 2050. As for
Scope 3 emissions, we have started data collection andtabulation in this fiscal year. At this point, we have not yet
completed the compilation of Scope 3 emissions. For the time
being, we will work on collecting detailed data and improving
the accuracy of data compilation with the aim of disclosing thedata as soon as possible. For Scope 3, we are also studying the
reduction of emissions, and will consider specific reduction
targets in the future.

28

[Chapter 3] Sustainability

Contribution to Local Communities
One of the Group's Materialities is "coexistence and co-prosperity with local communities". We will strive to contribute to thedevelopment of economy, society and culture as a good corporate citizen in cooperation with local communities toward asustainable society. We will contribute to the revitalization of local communities through environmental activities and support for
the transmission of traditional culture.

Safety and Sanitation-related activities in Toyama Prefecture
Environmental Cleaning Activities around the Factory

Contribution to Traffic Safety for Local Children

Twice a year, in spring and fall, our employees clean the areaaround the factory as part of the city environmental cleaning
campaign of the Namerikawa City Factory Club, of which the
Hayatsuki Factory is a member.

Every year, we donate our retroreflective stickers to prevent
traffic accidents to new first-year elementary school
students in eastern part of Toyama Prefecture.

Contribution to the Preservation andTransmission of Traditional Performing Arts
Uozu Serikomi Choroku, a folk song representative of Uozu
City, Toyama Prefecture, has been handed down since theEdo period. Every year, our employees participate in the"Serikomi Chororoku Machi Nagashi" dance to the intense
rhythm of this marching song, contributing to the preservation and passing on of this traditional art form.

Regional Contribution in Thailand

Donation of Beds to Hospital and RegularParticipation in Blood Donation Activities
One of our group companies, Electro-Ceramics(Thailand) Co., Ltd. (ECT), has been making donations
to Lamphun Hospital, a national hospital in Lamphun
Province, Thailand, since 2018 as part of its community contribution activities. In 2022, the fifth year of theactivities, ECT donated beds to the Hospital. In
addition, the Thai Red Cross has visited the company
every three months since 2015 to conduct blood
donation drives, with about 50 employees participating each time. ECT will continue its activities tocontribute to the health of the local people.

29

Presentation ceremony
held at ECTBlood donation activity

[Chapter 3] Sustainability

Human Resources
Approach to Ensuring Diversity
Our Group has always been striving to ensure diversity in our workforce, making it a basic policy to recruit and appoint humanresources regardless of race, gender, religion, nationality, etc. As the social and business environment changes rapidly, we believe it isof utmost importance to ensure "diversity" through the utilization of human resources with diverse values and backgrounds in order torealize our Group's mission and vision and achieve sustainable growth. Based on this belief, we have set "promotion of diversity" as
one of the key issues in our Medium-term Management Plan, and we will promote efforts to respect and utilize the individuality of eachof our diverse employees, including women, non-Japanese, and mid-career employees.

Current status of ensuring diversity andsetting of voluntary and measurable goals
Promotion of female employees to management positions
Targets for Ratio of Female Employees
in Management Positions

Ratio of female employees

41%
14%
Our Group

Our Company

13%

15%
or more%20
or moreCurrent

FY2025

FY2030

2.6%

or more5%%
10
or moreOur Group

Our Company

A ct ion Plan

1

We will increase the ratio of female
employees in new hires, maintaining it
at 30% or higher in Japan, and actively
promote the recruitment of women forcareer positions, thereby increasing thenumber of female managers andcandidates for managerial positions.

2

We will further improve the work-lifebalance by promoting and improving
the use of existing systems such as
maternity/paternity leave, nursing
care leave, and shorter working
hours, and by promoting childcare
leave for male employees.

3

We will enhance career
support by introducing asystem to reinstate humanresources who have left thecompany due to marriage,
childcare, or other unavoidable reasons.

30[Chapter 3] Sustainability

Human Resource Development and Workplace Environment Improvement to Ensure Diversity
Based on the belief that human resources are the cornerstoneof all business activities, our Group is actively working to
improve the workplace environment, secure diverse humanresources, foster human resources, and develop their careers
so that diverse human resources can come together and growand play an active role with the Group, each of them maximizing
their abilities. Specifically, through the following initiatives, we
are working on promoting the development of human resources,
including next-generation management personnel, globally
capable personnel, and top-notch engineers, as well as
proactively responding to the work styles of the new normal era
and improving the workplace environment.

1｜Next Generation Management
Personnel Development Program
With the aim of developing human resources who can serve as
managers in the future and who are diverse, we implement the
Next Generation Management Personnel Development
Program. Under the program, we systematically develop andselect human resources through four levels of hierarchicaltraining, etc., to ultimately develop human resources capable ofmanaging a company.

2｜Global Human Resource Development Program

4｜New Normal Work Styles Working Team
Proposal Activities
The New Normal Working Team was established to encourage
young employees to proactively make proposals on the work
styles that will help them win in the new normal era. Motivatedyoung employees were invited from within the company toparticipate in the team, deliberated on and discussed work
styles that would win in the new normal era, and proposed theresults to the Executive Officer. Many proposals were selected
for adoption and the departments in charge are currently
implementing measures toward their realization.

5｜Implementation of Workplace
Improvement Activities
We are implementing workplace improvement activities toimprove the workplace, build a culture in which everyone cantake on new challenges, and raise awareness of complianceand safety in the workplace. Based on the results of employee
satisfaction surveys and other data, meetings are held at each
workplace to sort out issues faced by the workplace, discusscountermeasures, and implement initiatives in accordance withthe action plan.

With the aim of cultivating human resources who are capable ofworking globally, we implement the Global Human Resources
Development Program. Under the program, we select employees
from among those who have a high awareness of working
overseas and those who are deemed suitable to work overseas,
and train them to acquire a global mindset, skills, knowledge, etc.

3｜Young Engineer Development Program
With the aim of supporting the growth of young engineers
into first-class technicians, we implement the Young
Engineer Development Program. Young engineers areprovided with daily guidance on themes by education
managers and tutors, and are also encouraged to acquire
broad insight into specialized technologies through participation in in-house specialized courses and external academic conferences and technical presentations.

Head of Education

TutorsYoungtechniciansParticipation in courses
and presentations

31

Employee
Satisfaction
SurveyImplementationof action plans

Meeting

Organizing
issues andconsideringcountermeasures

6｜Improvement of Personnel Evaluation System
With the aim of building a culture in which everyone can take on
new challenges, we have revised our personnel performance
evaluation system. We have incorporated target management
into our personnel performance evaluation system, which allows
us to assign points not only for the degree of achievement ofgoals, but also for the degree of difficulty of goals, as well as
degrees of effort, ingenuity, and contribution. Recently, we have
improved the system by raising the points awarded for difficultyin order to appreciate the challenge of taking on difficult goals.

[Chapter 4 ] GovernanceCorporate Governance
Basic Approach
Our basic approach to corporate governance is to ensure a system that enables fair and highly transparent management, and prompt
management decisions and business execution in a rapidly changing business environment, and at the same time to ensure thatinternal checks and balances are functioning effectively to achieve sustainable growth and increase corporate value, and to fulfill our
responsibilities to our shareholders and other stakeholders.

Corporate Governance Structure
General Meeting of Shareholders
Appointment and dismissal
Advisory
ReportNomination andCompensation Committee
ReportRisk Management Committee

Board of Directors
6 directors

Appointment and dismissal

Board of Auditors
3 auditors

Audit<Decision‐making Body>

Selection and Supervision

Staff
Audit

President Chief Executive Officer

Appointment
and dismissal(including 3 outside auditors)(including 2 outside directors)

Corporate Auditor's Office
Staff<Execution of Business>

Cooperation
Cooperation

Accounting Auditors<Accounting Audit>

Business Audit Office

Management Meeting

・Business Audit Group・Internal Control Assessment Group

Compliance Committee
Executive Officers

Operational Audits
Internal Control Assessment

Audit

Each department
Here is the link to the Corporate Governance Report.

https://www2.jpx.co.jp/disc/40640/140120221115567384.pdf

Nomination and Compensation Committee
The Company has established the Nomination and Compensation Committee as a voluntary advisory body to the Board of Directors inorder to enhance corporate governance by strengthening the fairness, transparency and objectivity of procedures related to thenomination and compensation of directors and others.
● The Nomination and Compensation Committee shall, in response to
the Board of Directors' inquiries, deliberate on matters relating to thenomination and compensation of directors and others, and report to
the Board of Directors.
●The Nomination and Compensation Committee shall consist of atleast three directors selected by a resolution of the Board of Directors,
a majority of whom shall be independent outside directors. In thisregard, the chairman of the Committee shall be selected by aresolution of the Board of Directors from among the members who are
independent outside directors.

Committee
member name

Inside andNumber of
Number of committee
outside directors committee meetings meetings attended(Committee Chairperson)

Endo Naoko

Outside Director

10

10Shirai Hitoshi

Outside Director

10

10Sugiyama Takahisa

Representative
Director

10

10*January - November 2022

Appointment of Directors
The Company considers it fundamental that the Board of Directors, including outside directors, with different expertise and experience,
be able to effectively demonstrate their abilities and that the Board of Directors be highly effective in terms of the scale of the Company. In addition, a skill matrix listing the skills that each director should possess is included in the notice of the Ordinary General Meetingof Shareholders and disclosed on the Company's website. For appointment of directors, the Nomination and Compensation Committee, the majority of whose members are independent outside directors, deliberates and reports to the Board of Directors, and theBoard of Directors makes decisions based on the committee's report.

32

[Chapter 4] Governance

Skills Matrix
Name

Business
Management

Finance &Accounting

Legal &
Compliance

Sugiyama Takahisa〇

Yoshitada Iguchi

〇

〇

〇

Yukinobu Hasegawa〇〇

Yuichi Yokota〇〇

R&D/Production
Technology〇

International
Affairs

Risk
Management

〇

〇

〇
〇

〇

Endo Naoko
Shirai Hitoshi

Sales &
Marketing〇〇〇

Independence of Outside Directors
The Company selects candidates for independent outside directors based on whether they meet the criteria for independence set forth
by the Tokyo Stock Exchange as well as whether they have broad business experience and knowledge. Based on this, the Company
has notified the Tokyo Stock Exchange of the two outside directors as independent directors as stipulated by the Tokyo Stock
Exchange. There is no business relationship between the two outside directors and the Company.

Compensation for Directors
The compensation of the Company's directors is determined by the Nomination and Compensation Committee, which, after deliberating the policy for determining the amount of compensation, etc. of directors and the details of individual compensation, etc. based on
this policy, reports to the Board of Directors, which, after discussion, passes a resolution on the amount of compensation within theannual amount approved by the General Meeting of Shareholders.

Composition of Directors' Compensation

Amount of performance-linked compensation

The Compensation of the Company's Directors, within the annual
amount resolved at the General Meeting of Shareholders, is calculated
based on the duties and responsibilities of each individual Director,
taking into account the general standards, and generally consists offixed Compensation (monthly Compensation: 65% of the amount paid),
performance-linked Compensation (bonus: 25% of the amount paid)
and stock-based Compensation (10% of the amount paid) on astandard payment basis. In this regard, however, performance-linked
Compensation and stock-based Compensation are not paid to outside
directors. Compensation for corporate auditors, within the annual
amount resolved at the general meeting of shareholders, is determinedthrough consultation of the corporate auditors based on the duties andresponsibilities of each individual auditor.

The amount of performance-linked compensation will, in principle, vary
within a range of 0% to 150% of the standard payment amount,depending on the performance evaluation for a single fiscal year. In
addition, in the process of determining the amount of performance-linked compensation, the Nomination and Compensation
Committee prepares a compensation proposal based on a comprehensive evaluation of the degree of achievement of the indicators related
to performance-linked compensation and the contribution of eachdirector to the Company's performance and reports to the Board of
Directors, which, after discussion, passes a resolution on the amountof performance-linked compensation for each director.

Introduction of a medium- to long-term incentive stock compensation plan
At the 123rd Ordinary General Meeting of Shareholders held on June29, 2022, we have introduced a new medium- to long-term incentive
stock compensation (restricted stock) system for the purpose of giving
our directors incentives to continuously improve the corporate value of
our Group and to promote further value sharing with our shareholders.

Performance-Linked Compensation-Related Indicators
The performance-linked compensation-related indicators are operating
income (degree of achievement related to target and year-on-year
growth) and operating cash flow (year-on-year growth), as emphasis isplaced on increasing business profitability and generating cash. The
target for operating income in the fiscal year ending March 31, 2023, is
3.4 billion yen.

Evaluation of the Effectiveness of the Board of Directors
The Company employs an outside consultant to evaluate the effectiveness of the Board of Directors. In April 2022, all directors andauditors were asked to respond to a questionnaire covering 31 questions (an increase of two items from the previous survey), including
the composition and operation of the Board of Directors, and the results were used to evaluate the effectiveness of the Board of
Directors through discussion by the Board of Directors. As a result of the discussion, the Board of Directors evaluated that theeffectiveness of the Board of Directors was generally maintained this time as well, but some new issues were pointed out regarding
efforts to deepen discussions at the Board of Directors meetings. Based on these issues pointed out, the Company will implement
further measures and improve its environment to enhance the effectiveness of the Board of Directors.

33

[Chapter 4] GovernanceCompliance/Risk Management
Compliance
Basic Approach
The Group has established "Basic Guidelines for on Corporate
Activities" and "Code of Conduct" as its compliance regulations.
The President and Chief Executive Officer is in charge of compliance, and the Compliance Committee is in charge of operations
for compliance with laws, regulations, and corporate ethics.

Code of Conduct
Based on the "Basic Guidelines for Corporate Activities", the Grouphas established a Code of Conduct to be followed by all the officers
and the employees of the Group. (For more information, please visit
our website at https://www.carbide.co.jp/en/corporate/csr/)

Basic Guidelines on Corporate Activities

1

The Nippon Carbide Industries Group shall observe any andall laws and ordinances applicable to its corporate activities,
faithfully follow the principles of social ethics, and carry out
corporate activities with sound judgment.

2

The Nippon Carbide Industries Group shall strive to accurately grasp the needs of the market and customers, and provide
excellent products and services in terms of quality, price,safety, and other aspects.

3

The Nippon Carbide Industries Group shall respect humanity,
encourage each employee, as a corporate custom, to“develop his or her own ideas and put them into practice” ,and make every effort to secure the good health and safety of
employees at their working places, and improve their comfort
and richness in life.

4

The Nippon Carbide Industries Group shall commit itself toaction to protect the global environment, and make every
effort to protect the environment in all of its corporate
activities.

5

The Nippon Carbide Industries Group shall establish good
relations of mutual trust and cooperation with entities having
relationships with this company, such as the stockholders,customers, local communities, etc., and strive for mutual
prosperity in coexistence.

6

The Nippon Carbide Industries Group shall contribute tosociety and culture a good corporate citizen.

7

The Nippon Carbide Industries Group shall contribute tosociety and culture a good corporate citizen.

Promotion Structure
For promotion of compliance, we conduct training and otheractivities to ensure that all officers and employees below them are
conducting business operations in accordance with the Compliance Regulations. In addition, we take a resolute stance against
antisocial forces that threaten the order and safety of civil society,and we have established an internal system to block any relationship with such forces. Further, the Business Audit Office, which is incharge of internal audits, monitors the execution of business
operations in accordance with laws, regulations, and company
rules, and the Representative Director provides guidance for
improvement. In addition, we have established an internal reporting
system (hotline) for consultation and reporting, which includes theLegal Office and an outside attorney as a contact person.

Risk Management
Basic Approach
As for the risk management of the Group, the Risk Management Committee, whose secretariat is the Corporate Planning Department,
evaluates and prioritizes risks based on the Risk Management Basic Policy, and instructs relevant departments to take appropriate measures toreduce risks in day-to-day business activities. The Board of Directors is in a position to supervise the Risk Management Committee, receiving
reports twice a year from the Committee, and is involved in overall risk management activities, including basic risk management policies,
identification of important risks, determination of important measures, monitoring of measures and giving instructions for improvement.

Major Business Risks
The major risks that the Group recognizes as having the potential to materially affect its financial position, operating results, and cash flows are as follows.
(1) Sudden changes in market conditions in core businesses, (2) fluctuations in raw material prices, (3)fluctuations in exchange rate, (4) declines in the valueof fixed assets, (5) geopolitical risks, (6) re-spread of COVID-19 infection, (7) accident disasters, (8) natural disasters, (9) litigation etc., (10) intellectual
property rights, (11) product liability, (12) compliance with environmental regulations and response to climate change, and (13) system risks.
(For more information, please visit our website: Financial Report for the Year Ended March 31, 2022, page 12: https://ssl4.eirparts.net/doc/4064/yuho_pdf/S100OJV4/00.pdf)

34

[Chapter 4] Governance

Board Members and Executive Officers
Directors

Representative Director
Senior Managing Executive Officer
Chief Financial Officer

Representative Director & President
Chief Executive Officer

Sugiyama Takahisa
April 1982
July 2005
July 2006
January 2008
July 2009
January 2015
January 2016
March 2020
June 2020

Asahi Glass Co., Ltd. (current company name：AGC Inc.)
Unit Manager, Planar DeviceUnit, Photonics Components
Division, Electronic & Energy General Division, Asahi
Glass Co., Ltd.
Unit Manager, Planar Device Unit, Electronics & Energy
General Division, Asahi Glass Co., Ltd.
General Manager, Photonics Components Division,
Electronics & Energy General Division, Asahi Glass Co.,
Ltd.
General Manager, Photonics Components Division,
Electoronics General Division, Electronics Company,Asahi Glass Co., Ltd.
General Manager, Electronic Materials General division,
Electronics Company, Asahi Glass Co., Ltd.
Executive Officer; General Manager, Electronic Materials
General division, Electronics Company, Asahi Glass Co.,
Ltd.
Advisor of the Company
Representative Director & President; Chief Executive
Officer (present post)

Iguchi Yoshitada
April 1982
January 2001
April 2004
January 2006
May 2007
May 2009
June 2011
January 2019
April 2019
June 2019
April 2020
April 2021
June 2021

Director
Executive Officer

Outside Director

Yokota Yuichi
April 1985
April 2001
April 2004
April 2012
April 2013
April 2015
April 2018
April 2020
April 2021
June 2021

35

Joined the Company
Manager, Second Electronic Materials Group, Electronic
Materials Division
General Manager,Printed Wiring Boards Business Unit
Electronic Materials Division
General Manager,Ceramic Substrates Business Unit
Electronic Materials Division
General Manager,Optical Products Business Promotion
Division Operational Headquarters of Electronic and
Optical Products
General Manager,Electronic Materials Division Operational
headquarters of Electronic and Optical Products
Executive Officer:General Manager,Planning andManufacturing Management Department Electronic andFunctional Products Division
Executive Officer:General Manager ,Planning and Manufacturing Management Department Electronic and Functional
Products Division / General Manager Osaka Sales Office
Executive Officer; General Manager, Corporate Planning
Department
Director; Executive Officer; General Manager, Corporate
Planning Department (present post)

Joined Mitsubishi Bank, Ltd. (current company
name:MUFG Bank, Ltd.)
General Manager, Ikebukuro Higashiguchi Branch, Bankof tokyo-Mitsubishi(BTM)
General Manager, Ebisu Branch, BTM
Deputy General Manager, Corporate Banking Department
II, MUFG Bank
General Manager, Shinbashi Branch, MUFG Bank
General Manager, Financial Institutions Department,
MUFG BankManaging Executive Officer, Mitsubishi UFJ Research andConsulting Co., Ltd.
Advisor of the Company
Managing Executive Officer; Overall Business Management（Corporate); General Manager, Corporate Planning
Department
Director; Managing Executive Officer; Overall Business
Management（Corporate); General Manager, Corporate
Planning Department
Director; Managing Executive Officer; Overall Business
Management（Corporate)
Director; Senior Managing Executive Officer; Overall
Business Management（Corporate)
Representative Director; Senior Managing Executive Officer;
Chief Financial Officer;Overall Business Management（Corporate)(present post)

Endo Naoko
Joined The Dai-ichi Mutual Life Insurance Company(current company name：The Dai-ichi Life Insurance
Company, Limited)
Resigned from the said company
March 2004
November 2007 Appointed as a legal apprentice
December 2008 Registered as attorney-at-law (present) Joined Ono Sogo
Legal Profession Corporation
June 2019
Director of the Company (present post)
April 2001

[Chapter 4] GovernanceCorporate Auditors

Director
Managing Executive Officer

Hasegawa Yukinobu
April 1985
April 2016
June 2016
April 2017
April 2018
June 2018
April 2020
April 2021
June 2021
April 2022

Joined the Company
General Manager Specialty Polymers Division
Operational Headquarters of Functional Products /General Manager Osaka Branch
Executive Officer General Manager Specialty
Polymers Division Operational Headquarters ofFunctional Products / General Manager Osaka Branch
Executive Officer Deputy Senior General Manager
Operational Headquarters of Functional Products /General Manager Specialty Polymers Division
Executive Officer Senior General Manager Films andSheets Division
Director Executive Officer Senior General Manager
Films and Sheets Division
Director Executive Officer Senior General Manager
Electronic and Functional Products Division
Director Executive Officer Chief Technical Officer
Factory Manager Uozu and Hayatsuki Factory
Director Executive Officer Chief Technical Officer
Factory Manager Uozu and Hayatsuki Factory, General
Manager Research and Development Center
Director Managing Executive Officer Chief Technical
Officer Factory Manager Uozu and Hayatsuki Factory,
General Manager Research and Development Center

Full-time Corporate Auditor

Kubo Hideaki
April 1982

Joined Mitsubishi Bank, Ltd. (current company name:
MUFG Bank, Ltd.)
January 2001 General Manager, Mejiro Branch, Bank of tokyo-Mitsubishi(BTM)
February 2003 General Manager, Yaesu-Dori Branch, BTM
October 2004 General Manager, Ogikubo Branch, BTM
October 2006 General Manager, Umeda-Chuo Branch, MUFG Bank
June 2008
General Manager, Kashiwa-Chuo Branch, MUFG BankMay 2011
President and Representative Director, Mitsubishi UFJ
Loan Business Inc.
June 2016
President and Representative Director, MUTS Inc.
June 2020
Full-time Corporate Auditor of the Company (present post)

Full-time Corporate Auditor

Hayashi Fumiaki
April 1984
January 2015
January 2017
January 2021
March 2021
June 2021

Joined Asahi Glass Co., Ltd. (current company name:
AGC Inc.)
General Manager, Material Purchase & Logistics
Department Division, Asahi Glass Co., Ltd.
Executive Officer; General Manager, Material Purchase& Logistics Department Division, Asahi Glass Co., Ltd.
Executive Officer; Assistant to the President CEO,AGC Inc.
Retired as Executive Officer of AGC Inc.
Full-time Auditor of the Company (present post)

Outside Director

Shirai Hitoshi
April 1979
April 1998
October 1999
April 2003
June 2005
October 2009
October 2010
June 2011
April 2013
April 2020
June 2020
April 2021

Joined Hitachi, Ltd.
Chief Researcher, Hitachi Research InstituteDepartment Manager, e-Government Project Development Center, Government and Public Corporation
Information Systems Division, Hitachi, Ltd.
Department Manager, Business Development
Department, Urban Planning and Development Systems
Group, Hitachi, Ltd.
Deputy General Manager, Hitachi Research Institute
Deputy Managing Director, Hitachi Asia
Director, Hitachi Global Storage Technologies, Ltd.
Director and General Manager, Hitachi Research Institute
President and Representative Director, Hitachi ResearchInstitute
Director, Hitachi Research Institute; Senior Strategist,
Hitachi, Ltd.
Director of the Company (present post)
Executive Member, Board of Trustees, J. F. Oberlin
University and Affiliated Schools (present post)

Corporate Auditor

Emi Mutsuo
Registered as a certified public accountant (present post)
March 1992
February 1996 Joined Century Audit Corporation (current company
name：Ernst & Young ShinNihon LLC)
Partner, ShinNihon Audit Firm (current company
May 2001
name：Ernst & Young ShinNihon LLC)
Senior Partner, ShinNihon LLC (current company
July 2008
name：Ernst & Young ShinNihon LLC)
Deputy Head of Finance Department, ShinNihon LLC
July 2013(now Ernst & Young ShinNihon LLC)
July 2014
Head of Financial Business Department,ShinNihon
LLC (now Ernst & Young ShinNihon LLC)
February 2016 Managing Director (in charge of financial business),
ShinNihon LLC (now Ernst & Young ShinNihon LLC)
October 2019 Internal Council Member, Ernst & Young ShinNihon LLC
June 2021
Corporate Auditor of the Company (present post)
July 2021
Executive Director of Professional Regulation Division, The
Japanese Institute of Certified Public Accountants(present post)

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Global Network
Domestic Offices and Domestic and Overseas Group Companies
Domestic Network

Major domestic subsidiaries□ Head Office●VINYFRAME INDUSTRY CO., LTD.

［Corporate Activities］Manufacturing and Sales of Aluminum construction
Materials and Resin Products, etc.;
Manufacturing and Sales of Aluminum Building Materials and Resings
Products, etc;
Sales of Property Insurance[Head Office/Factory] 616, Kitaonie, Uozu-shi, Toyama 937-8566, JAPANTEL +81-765-24-1032 FAX +81-765-24-1051[Sales office] Sapporo, Sendai, Tokyo, Uozu, Nagoya, Osaka, Okayama,
Hiroshima, Fukuoka, Miyazaki

16-2, 2-Chome Konan, Minato-ku, Tokyo 108-8466, JAPANTEL+81-3-5462-8200 FAX+81-3-5462-8244□ Osaka Sales Office6-1, 3-Chome, Hirano-cho, Chuo-ku, Osaka-shi, Osaka 541-0046, JAPANTEL+81-6-6233-0500 FAX+81-6-6233-0510□ Uozu Factory

751, Motoshin, Uozu-shi, Toyama 937-8567, JAPANTEL+81-765-24-1100 FAX +81-765-22-0223□ Hayatsuki Factory●SANWA CHEMICAL CO., LTD.

530, Ojima, Namerikawa-shi, Toyama 936-8555, JAPANTEL+81-76-471-2211 FAX+81-76-471-2041［Corporate Activities］Manufacturing and Sales of Chemical Products andMedicine[Head Office/Factory] 24-8, 9-chome, Tamura, Hiratsuka-shi, Kanagawa
254-0013, JAPANTEL +81-463-55-3140 FAX +81-463-54-0203□ Kyoto Manufacturing Site

8-1, Minamikanamura, Kaide-cho, Muko-shi, Kyoto 617-0004, JAPANTEL+81-75-921-5347 FAX+81-75-931-1649□ Research and Development Center●HOKURIKU CERAMICS CO., LTD.

530, Ojima, Namerikawa-shi, Toyama 936-8555, JAPANTEL+81-76-471-0221 FAX+81-76-471-0225［Corporate Activities］Manufacturing and Sales of Ceramic Substrates andThick Film Printing Substrates
Manufacturing and Sales of Ceramic Substrates[Head Office / Factory] 143-3, Yokomakura, Uozu-shi, Toyama 937-0044,
JAPAN
TEL +81-765-24-7387 FAX +81-765-24-6654

Toyama/Hayatsuki Factory
Toyama/Research and Development Center
Toyama/Uozu Factory

Toyama/VINYFRAME INDUSTRY CO., LTD.
Toyama/HOKURIKU CERAMICS CO., LTD.
Toyama/DIAMOND ENGINEERING CO., LTD.
Toyama/USK-Human CO., LTD.

●DIAMOND ENGINEERING CO., LTD.

［Corporate Activities］Design, Supervision, Construction, Maintenance andAnalysis of Industrial Plants[Head Office] 7-22, 1-chome, Shakado, Uozu-shi, Toyama 937-0067, JAPANTEL +81-765-24-5670 FAX +81-765-23-9210

Tokyo/Head Office

Kanagawa/Sanwa Chemical Co. Ltd.

●USK-Human CO., LTD.

Kyoto/Kyoto Manufacturing Site
Osaka/Osaka Sales Office［Corporate Activities］Business contract, General worker dispatch business[Head Office] 751, Motoshin, Uozu-shi, Toyama 937-0068, JAPANTEL +81-765-22-3620 FAX +81-765-22-7806

Major Overseas Subsidiaries
恩希愛（杭州）薄膜有限公司／
NIPPON CARBIDE INDUSTRIES (Hangzhou) CO.,LTD..
Films & Sheetings Products BusinessElectronic & Functional Products Business

NIPPON CARBIDE INDUSTRIES (USA) INC.
Films & Sheetings Products BusinessElectronic & Functional Products Business

NIPPON CARBIDE INDUSTRIES(South Carolina) INC.
Films & Sheetings Products Business

PT ALVINY INDONESIA

Films & Sheetings Products Business

Construction Materials Related Business

ELECTRO-CERAMICS (THAILAND) CO.,LTD.

NIPPON CARBIDE INDUSTRIES (NETHERLANDS) B.V.
Films & Sheetings Products BusinessElectronic & Functional Products BusinessElectronic & Functional Products Business

NIPPON CARBIDE INDUSTRIES (THAILAND) CO.,LTD

NIPPON CARBIDE INDUSTRIES FRANCE S.A.S

Films & Sheetings Products Business

NCI(VIETNAM) CO.,LTD.

Films & Sheetings Products Business

NIPPON CARBIDE INDIA PVT. LTD.

NIPPON CARBIDE INDUSTRIA DO BRASIL LTDA.

Films & Sheetings Products Business

Films & Sheetings Products BusinessElectronic & Functional Products Business

NIPPON CARBIDE INDUSTRIES ESPAÑA, S.A.U.
Films & Sheetings Products Business

Films & Sheetings Products BusinessFranceNIPPON CARBIDEINDUSTRIES FRANCE
S.A.S.

Spain
NIPPON CARBIDEINDUSTRIES ESPAÑA,S.A.U.

Netherlands
NIPPON CARBIDE INDUSTRIES(NETHERLANDS) B.V.
Northern Thailand
ELECTRO-CERAMICS(THAILAND) CO.,LTD.
India
NIPPON CARBIDEINDIA PVT. LTD.

VietnamNCI(VIETNAM) CO.,LTD.

ThailandNIPPON CARBIDEINDUSTRIES(THAILAND)
CO.,LTD37

Hangzhou, China
恩希愛（杭州）
薄膜有限公司／NIPPON CARBIDEINDUSTRIES (Hangzhou)
CO.,LTD..

Indonesia
PT ALVINYINDONESIA

California, U.S.A.
NIPPON CARBIDEINDUSTRIES (USA) INC.

South Carolina, U.S.A.
NIPPON CARBIDE INDUSTRIES(South Carolina) INC.

BrazilNIPPON CARBIDEINDUSTRIA DO BRASIL
LTDA.

Company Information/Stock Information
Corporate OutlineName

NIPPON CARBIDE INDUSTRIES CO., INC.

Head Office16-2, 2-Chome Konan, Minato-ku, Tokyo 108-8466, JAPANTEL +81-3-5462-8200 FAX +81-3-5462-8244

Established

8th October, 1935

Listed Stock ExchangeTokyo Stock Exchange: Prime Market

Capital Stock7,789,101,730YEN*

Total number of shares issued

9,406,826*

Employees

Consolidated: 3,495*
Non-consolidated: 514*

Group Business Activities

Electronic and Functional Products Business, Films and Sheetings Business,
Construction Materials Related Business, Engineering Business* As of September 2022

Shareholder and Share Distribution (as of September 3, 2022)
Distribution of shareholders by type of ownership
Foreign corporations, etc.
(individuals): 8/0.1%

Financial institutions: 11/0.1%
Financial instruments
business operators: 32/0.4%

Distribution of shares by type of shareholder
Foreign corporations, etc.
(individuals): 12,700 shares/0.14%
Financial instruments business
operators: 651,600 shares/6.94%

Other corporations: 74/0.9%.
Foreign corporations, etc.
(other than individuals): 84/1.0%

Individuals and others:
5,216,400 shares/55.42%

Foreign corporations, etc.
(other than individuals):
1,040,100 shares/11.22%

8,097

Individuals and others: 7,888/97.5%

9,386,100
sharesFinancial institutions: 1,389,800 shares/14.82%
Other corporations: 1,075,500 shares/11.46%*Figures in the graph do not include shares less than one unit.

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