NIPPON SEIKI
Integrated Report2023

Philosophy and Policies
Management Philosophy System

Philosophy
Corporate
CultureVisionCode of Conduct

Midterm Policy / Management Goal /Policy・Target by Segment

Social Issues for Complying Stakeholder’s Expectation

Management Philosophy

To contribute to the prosperity of society
by providing high-value products andservices from our customer s point of view.
Corporate Culture「Essentials, Reality, Simplicity and Speed」
Create a corporate culture that embodies the aspects of“Essentials, Reality, Simplicity and Speed” and become a “strong and robust company”

01

Nippon Seiki Integrated ReportVisionFacing the future

Challenge & Change
for 2030
The Nippon Seiki Group aims to be a total solution company that provides

safety, security and excitement to people around the world through technology.

Technology
Total Solution

Product
Development
Technology

Technology to develop products that meets high-grade functional requirements byunderstanding customer requirements and market needs, combining hardware design
technology (mechanical/electronics hardware/optical design, etc.) and software technology(system/program design, etc.), and coordinating with customers.

Evolution of coretechnologies

Technologies which enable the global supply of high-quality, low-cost products by possessing
manufacturing technology for resin-based parts (compounding, molding, printing, painting,etc.), mounting and assembly technology for printed circuit board artwork and electronic
components, and design/manufacturing technology for production equipment and molds, andutilizing these technologies at the Group's production bases.

Innovation ofLifestyleTechnology to collect, process, and share information by function (management information,
sales/design/engineering/manufacturing/purchasing/quality information, etc.), as well as
technology to accumulate and analyze information and reflect it in business strategies.

Innovation ofPerceptual Assist

To provide safety, security, and excitement to society by continuously evolving functions thatpick up information that people cannot directly perceive and transmit it in a timely andappropriate manner through their five senses.

Evolution of coretechnologies

Continue to create innovation through evolution, provide technologies that meet market
demands, and co-create solutions to the problems faced by the customers by evolving andcombining the three technologies owned by the Group and the individual technologies thatmake up the three technologies.

Innovation ofLifestyle

To provide new products and services that replace taken-for-granted habits and behaviors,
thereby creating more time in people's lives and enriching their lives.

Sustain and Improve Quality

Awareness Change
1. Focus on cost improvement

4. Have the spirit to lead the organization

2. Critical of the current situation, challenge reform

5. Change your perspective and ideas, and take on challenges

3. Speed up judgment and execution

6. Systematize and improve organizational strength

Nippon Seiki Integrated Report02Safe, Secure and Inspiring
Everyone

03

Nippon Seiki Integrated Report

CONTENTS

SECTIONSECTIONSECTIONSECTIONSECTION

01

Overview of Nippon Seiki Group02

Nippon Seiki Group's Value Creation Process

03

ESG Initiatives

04

Financial Statements

05

Company data

05 Nippon Seiki Group History
07 Overview of the Nippon Seiki Group
09 Financial and Non-Financial Highlights

11 Message from the President
15 Nippon Seiki Group Sustainability Policy
17 Value Creation Process
19 Materiality
21 Business of Nippon Seiki Group

31
33
37
45
49

53

57
58

ESG Initiatives
Environment
Social Activities
Corporate governanceDialogue with Outside Directors

Financial Statements

Board of Directors
Integrated Report Review

Forward-Looking Statements
The data and future forecasts in this report are based on information available as of the date of publication of this report, and may be affected by various factors. Actual results may
differ materially from forecasts. Therefore, we ask that you refrain from relying entirely on these forward-looking statements. In addition, we are based on the new situation, the incidentsof the Shoho (General News) and so on.
We are not responsible for updating these future predictions.

Nippon Seiki Integrated Report04

Nippon Seiki Group History
1940’s〜50’s

1960’s1945

Society1980ʼs1970’s1973●Remarkable Economic Growth in Japan●Oil Crisis

1981

Nippon Seiki●Takami Plant completed

1945

1972

●Nippon Seiki Foundation

1986●In California, U.S.A Established
N.S. International, Inc.

1946

●Listed on the Second
Section of the Tokyo
Stock Exchange●In Ohio, USA
Established New Sabina
Industries Inc.

●Nippon Seiki Co., Ltd. Establishment

1955●Head office and factory relocated to Nishi-Shinmachi(present: Jooka), Nagaoka City, Niigata Prefecture

1987●In Worstershire,
United Kingdom
Established UK-NSI.

［1948］Daihatsu Auto Tricycle［1965］Honda CB450［1958］Honda SUPER CUB C100

［1976］Honda ACCORD［1982］Mazda CAPELLA

Circumstance and Corporate Value Change(million yen)

18,00016,00014,00012,00010,000
8,000
6,000
4,000
2,000
0
-2,000-4,000-6,00005

Nippon Seiki Integrated Report

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

01

2000ʼs2010ʼs1997

2008●Collapse of a Bubble Economy in Japan

1990●Lehman Shock2001●Established PT.Indonesia Nippon Seiki
in Banden, Indonesia●Established R&D Center in
Nagaoka City, Niigata Prefecture2020ʼs2011●Asian Currency Shock1991

Overview of Nippon Seiki Group

1990ʼs2020●COVID-19 Pandemic

2011●Established Wuhan Nissei Display System Co., Ltd.
in Wuhan, China

2006●Established Shanghai Nissei
Display System Co., Ltd.
in Shanghai, China●Established Thai Nippon Seiki Co., Ltd.
in the province of Chonburi, Thailand

02

2019

●Established NS Technical Centerin Nagaoka City, Niigata Prefecture

Nippon Seiki Group's Value Creation Process

1995●The Great Earthquake
in East Japan●Established Nippon Seiki
Poland Sp. z o.o. in Lodz, Poland

2007●Established Vietnam Nippon Seiki Co., Ltd.
in Hanoi Vietnam

2002●Established Nippon Seiki Do Brasil Ltda.
in Amazonas, Brasil●Established Nippon Seiki（Europe）B.V.
in Amsterdam, the Netherlands

2022

2012

●Tokyo Technical Center opened●Established NS Instruments
India Private Ltd. in Southern India●Established NS India
Design & Trading Private Ltd.
in Haryana, India●Kyoei Engineering in Agano City,
Niigata Prefecture became wholly
owned subsidiary of Nippon Seiki

2008

03

［1988］McLaren Honda F-1 MP4/4［1999］Chevrolet CORVETTE［2007］BMW X5

ESG Initiatives●Established Nippon Seiki De Mexico S.A. De C.V.
in Nuevo León, Mexico［2018］Mercedes-Benz GLE［2015］Audi Q7

04
Financial Statements

Profit attributable to owners of the parent company（Left Side）

Market capitalization（Right Side）(million yen)

180,000
160,000
140,000
120,000
100,000
80,00005

60,000Company data

40,00020,0000-20,000-40,000

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023 (FYE)-60,000

Nippon Seiki Integrated Report

06

Nippon Seiki Group Overview [FYE March 2023]
Sales & Number of Employees by Region (Sales:truncation)Japan

EuropeSales (Outside)

Sales (Outside)

22.7(8.2%)
Billion Yen

Consolidated Sales

275.7

Number of Employees (Inside)658(4.8%)

2.8

4,440

13,624(26.7%)
Billion Yen(32.6%)

Billion Yen

Number of Employees

Sales (Outside)(37.3%)
Billion Yen

Number of Employees (Inside)

Operating Profit

Americas73.7

Billion Yen

102.9

Asia
Sales (Outside)

76.3(27.7%)
Billion Yen

Number of Employees (Inside)

Number of Employees (Inside)(16.6%)(46.0%)

2,256

6,270

Nippon Seiki Group Network

EuropeU.K.
Netherlands

Japan

PolandJapan

U.S.A.

China
TaiwanIndia

VietnamAmericas
MexicoThailandAsia

Indonesia

Brasil07

Nippon Seiki Integrated Report

01
Overview of Nippon Seiki Group

Sales by Business Segment (Sales:truncation)
Other

Car Sales

23.4

7.0

(8.5%)
Billion Yen(2.5%)
Billion Yen

Display Business(0.2%)
Billion Yen

0.6

02
Nippon Seiki Group's Value Creation Process

Resin Compound
Business

8.7(3.2%)
Billion Yen
Automotive Component
Business

Consumer Component
Business

19.4

216.4

（78.5%)
Billion Yen(7.0%)
Billion Yen

03
ESG Initiatives

Summary of Financial Results
Fiscal year ended March 2023
Financial Results

decrease in information systems services,
etc., but operating income was 588 million
yen (up 13.1% from the previous year).

Overview of the
Financial Situation
Assets at the end of the current consolidated
fiscal year amounted to 355,954 million yen,
an increase of 26,401 million yen comparedto the end of the previous consolidated fiscal
year, due to an increase in inventories,
despite a decrease in other financial assets.
Liabilities increased by 14,825 million yen
compared to the end of the previous fiscal
year to 149,505 million yen, due to anincrease in bonds and loans payable, trade
payables, and other payables due to securing safety stock.
Capital increased by 11,575 million yen
compared to the end of the previous fiscal
year to 206,449 million yen due to increases
in other capital components.
Inventories have increased due to therecent shortage of electronic components,
customers securing safety stocks to maintaintheir production lines, and requests fromcomponent suppliers for long-term contracts.
Currently, the shortage of electronic parts is
beginning to ease, and we are working to
reduce inventory by reviewing our management methods and aim for optimal inventory
levels.

05
Company data

Nippon Seiki Integrated Report

04
Financial Statements

The economic environment surrounding ourgroup during the fiscal year ended March 31,
2023 saw progress in the relaxation ofvarious restrictions caused by the novel
coronavirus in countries around the world.
Although there have been signs of economic
recovery, the outlook remains uncertain due
to factors such as global inflation and highresource prices, geopolitical risks such as
Russia's invasion of Ukraine and conflict
between the United States and China, monetary tightening policies in each country, andexchange rate fluctuations.
In our mainstay automotive parts
business, sales have recovered to 2019
levels due to the reduction in the impact of
the new coronavirus. Production plans werechanged due to a shortage of parts such as
semiconductors, and material and logistics
costs soared. However, we have endeavored
to secure profits by appropriately reflecting
increased costs in selling prices and by
reducing logistics costs by reducing airtransport of products and parts.
Revenue for the current fiscal year was
275,776 million yen (up 23.3% year on year),
operating income was 2,840 million yen(operating loss of 4,276 million yen in theprevious fiscal year), and net income was
1,380 million yen. million yen (compared to aloss attributable to owners of the parent

company of 5,180 million yen in the previous
fiscal year).
In the automotive parts business, sales
revenue of 216,483 million yen (up 26.7%
from the previous fiscal year) and operating
income of 1,179 million yen (compared to an
operating loss of 5,857 million yen in theprevious fiscal year) due to an increase inautomobile instruments, motorcycle instruments, etc. was. In the consumer parts
business, sales of air conditioning andhousing equipment controllers increased,
resulting in revenue of 19,419 million yen (up56.0% from the previous fiscal year) andoperating income of 1,349 million yen (up876.7% from the previous fiscal year). In theresin compound business, sales of resinmaterials increased, resulting in revenue of
8,727 million yen (up 1.2% from the previousyear), but operating income was 158 million
yen (down 62.3% from the previous year). In
the display business, sales of LCD products
decreased, resulting in revenue of 678
million yen (down 58.0% from the previous
fiscal year) and operating loss of 1,296
million yen (compared to an operating loss of
95 million yen in the previous fiscal year).
In the automobile sales business, sales of
new cars increased, resulting in revenue of
23,402 million yen (up 4.3% year on year)
and operating income of 1,090 million yen(up 13.9% year on year). In other areas,
sales revenue was 7.064 million yen (down
8.1% from the previous year) due to a08

Financial and Non-Financial Highlights for the Year Ended March 31, 2023
Financial
Revenue from sales(100 million yen) [Consolidated](100 million yen)
3,000
2,632

2,500

2,757

(100 million yen) (%) [Consolidated](%)(100 million yen)

(%)

150

6

120

12

5.4

100

4

3.1

1,500

1.8

50

2

76

28

0
500

2021

2022 (year)

-50

0

2019

2020

2021

-2

2022 (year)

-60

-51

2018

4,000

3,000

3,076

2,969

3,151

R&D Expenses

1,014

1,091

2,113

1,955

2,060

56.9

56.5

56.1

50

40
1,109

1,076
963

(100 million yen) [Consolidated](100 million yen)

56.8

3,559

3,295

-6

2022 (year)

Return on Equity(%) [Consolidated]
58.5

2021

Parent Company

Capital Adequacy Ratio

60

2020

Net Income Attributable to Owners of the(%)(100 million yen)

2019

0
-3

-2.8

Operating Profit Ratio(100 million yen) [Consolidated]

0.7

0.3

-0.2

Operating Profit

Current assets / Non-current assets

3

13

5

-3

-30

-1.9

2018

30

0

-42

2020

6

1.0
39

1,000

9
6.6

60

142

2019

115

90

2,236

2,000

2018

(100 million yen) / (%) [Consolidated](100 million yen)

2,463
2,169

0

Net Income Attributable to Owners of the
Parent Company / Return on Equity

Operating Profit / Operating Profit Ratio

37

39
35

40

29

30

31

2,000

1,000

0

2,449

2,218

20

20

10

2018

2019

2020

2021

2022 (year)

0

2018

2019

2020

2021

2022 (year)

0

2018

2019

2020

2021

2022 (year)

Current assets
Non-current assets

Capital Investment / Depreciation

Net Income per Share(100 million yen) [Consolidated](100 million yen)

100

132

123

93

98

97

200

103
82

83

25

22

8
-6

2020

Capital Investment
Depreciation

Nippon Seiki Integrated Report

40

40

2019

2020

2021

40

2021

2022 (year)

-100

2018

2019

20

10

-50

2019

40

30

100

0

2018

45

40

50

50

09

202

150

94

75

0

50

250

139

(yen) [Consolidated]
(yen)

(yen)

150
125

Dividends per Share(yen) [Consolidated]

2020

-85

2021

2022 (year)

0

2018

2022 (year)日Overview
本精機グofルNipponープのSeiki
概要 Group

01

Environment
Water Emissions

CO2 Emissions

Waste Emissions(1,000 m³) [Consolidated](tons) [Consolidated](tons) [Consolidated](1,000 m³)(tons)(tons)

750

10,000100,000

577

568

544

500

82,989

574

7,627

7,500
6,461

477

6,984
5,892

79,95075,0006,660

50,0002,500

25,00077,23402
Nippon Seiki Group's Value Creation Process

5,000

79,352
70,347

250

0

2018

2019

2020

2021

2022

0
(year)

2018

2019

2020

2021

0

2022

(year)

2018

2019

2020

2021

2022

(year)※Consolidated manufacturing bases will be covered until 2021, andmanufacturing, development design, sales, and vehicle sales bases will
be covered from 2022 onwards.

SocialFemale Managers

Employees Taking Childcare Leave / Retention

Employees with Disabilities(Number)
100
8.9

89

90

90

(%)

(Number)

10

60

9.3

8.4

75

50

8.9

8.9

(Number)(%)

50
7.5

99

103

5

2.4

2.4

2

30

1.5
45

50

48

49

1

35

2.5

2018

2019

2020

2021

0

2022 (year)

25

2.5

10
0

(cases)

3

40

20
25

2.3

(%)

0

0.5

2018

Number of Female managers

2019

2020

2021

0

2022 (year)

100

100

100

20

10

10

0

64.1

15

15

5

100

61.3

36.6

9

28.6
5

5

5

5

2018

2019

2020

2021

4

100

80

19

60

40

20

9.3

Number of Employees with Disabilities

02022 (year)

04

Male’s Childcare Leave% of Employees with Disabilities

Female’s Childcare Leave

Financial Statements% of Female managers

(%)

25
100

2.6

2.5

03

(cases)(%)

ESG Initiatives(Number)(%) [Consolidated]

Male’s Childcare Leave
Female’s Retention

Governance
Average Length of Employment(year)(cases)(cases)

25

20

20
20.3
17.9

19.3
17.2

19.8
17.3

20.1
18.2

18.2

8

5

4

Male

2020

2021
Female2022 (year)

0

12

13

200

63

6

7

2019

2020

2021

2022 (year)

170

166

56

57

0

136
42

100
142

2018

05

205

2018

114

109

2019

2020

Japan

94

2021

Company data

10

2019

300

18

16

12

2018

(cases)(cases)

20.7

15

0

Number of Patents Obtained

Number of Occupational Accidents(year)

155
44

111

2022 (year)

International

Nippon Seiki Integrated Report10Message from the President

Progress of medium-term management plan for 2021-2023
Nippon Seiki Group has advocated the management

ers' supply chains intact. Also, in parallel with maintaining

vision at our medium-term management plan started in

the supply chain, we worked on group-wide efforts to

2021 that promotes changes into “lean corporate

reduce logistics costs and improve costs, and as a result

structure” as well as “Facing the future Challenge ＆Change for 2030”.

11

we were able to escape from an operating deficit in fiscal
2021. In fiscal 2022, we achieved 275.7 billion yen of

In addition, we have proclaimed again the following

sales revenue, which exceeded the published value at

written statement “aiming to be a total solution company

the beginning of the period and were able to turn thethat provides safety, security, and excitement to peoplebusiness into a surplus of 2.8 billion yen of operatingaround the world through technology”.

income.

Looking back on last year, although the influence on

Being appointed as the company president from June

the pandemic of the new coronavirus gradually shrank,

2020, the speed of change has globally accelerated such

we were significantly affected by the global tightening ofas the pandemic of Covid19, Russian invasion ofelectronic components such as semiconductors and the

Ukraine, rising global prices and interest rates, and rapid

resulting production adjustments and reductions in

depreciation of the yen. Symbolized by “CASE” andautomobiles and motorcycles. Yet, our group continued“MaaS” the automobile industry is now in the midst of ato build trust by making frantic efforts to keep our custom-

revolutionary period of 100 years.

Nippon Seiki Integrated Report

01
Overview of Nippon Seiki Group

Having a ﬁrm axis as an organization,

02
Nippon Seiki Group's Value Creation Process

we will work to realize a proﬁt structurethat is less susceptible
to changes in external environments.

03
ESG Initiatives

04

change into a “lean corporate structure” aiming togroup. Also at sales subsidiaries, shared services andconstruct a strong management foundation by having ancompact operations that integrate management functions

axis as an organization. “Lean corporate structure” is the

between subsidiaries need to be accelerated. The

state of continuing PDCA cycles for maximizing added

second is to improve the local procurement rate of parts

value without depending on sales as well as minimizing

at factories around the world and reduce transportation

fixed costs. Our group suffered a big blow of a decline inand packaging costs. Currently, most subsidiaries

sales due to the coronavirus pandemic and the tightreceive parts supplied from our head office. But we willsqueeze on semiconductors. Then what we realized wasindicate the local procurement rate that each subsidiary

the need for an earnings structure that is less susceptible

should aim for as a KPI and will work to strengthen our

to fluctuations in sales due to changes in the external

system to accelerate this goal.

environment. Therefore, we are to work on various

Last year, thanks to the measures by lean manage-

measures in order to realize the “lean corporate

ment which contributed to the business recovery, we

structure” as our slogan.

turned a good profit. We will continue to vigorously

For lean management, the first is to improve the ratio

05
Company data

personnel ratio at the subsidiary factories across the

Financial Statements

In such an era of change, our group is promoting thepromote lean management in fiscal 2023.

of selling, general and administrative expenses to sales.
Specifically, reducing sales management personnel
costs and expenses, and optimizing direct and indirect

Next Page

Nippon Seiki Integrated Report12Message from the President

Initiatives for business recovery

Product development with new value

We recognize that further performance improvement is

In order to increase profitability over the medium tonecessary to meet the expectations of our stakeholders,long term, we are developing products with new value

especially our shareholders, for our group. We will workby leveraging the technological capabilities that ourto establish a lean corporate structure and improvegroup has cultivated. At the "Human and Automotive

profitability throughout the company.

Technology Exhibition" in May 2023, we exhibited our

For items that we recognize as important manage-

new product "Windshield Display" for the first time.

ment issues for our group, we name them as “focus

The windshield display is a product that has a liquid

theme” and tackle them as in-house projects steered by

crystal embedded in the black area at the bottom of aan executive officer in charge as a project leader. Among

car's windshield to display information such as speed

these focus themes, I would like to introduce two things

and warnings. By combining it with the Head Up

positioned as particularly important measures. The first

Display, we can create a safer and more secureis "improving costs in the automotive business." We

driving environment with less blurring of the driver's

operate and establish daily cost improvement activity

line of sight while driving.

processes, promote VA (Value Analysis)/VE (Value

In order to expand the business of Head Up

Engineering) for products under development and mass

Display that help prevent traffic accidents, we areproduction, and promote local procurement. The second

also developing a “retrofittable combiner-type Headis "reducing design costs by reorganizing the design

Up Display'' targeting cars without options and usedbase." We are working to shift resources to low-costcars. Unfortunately, Head Up Display is not yet

design bases and foster local engineers.

well-known in Japan, so we hope that this “retrofitta-

We are also working to resolve issues in each region
in a project format. In Europe, we are firmly promoting a

ble Head Up Display'' will help end users feel morefamiliar with Head Up Display.

profitability plan and aiming to transform our structure

Also by utilizing our group's sensor sensing

into a profitable one. We view the Indian region as atechnology, we developed the guidance systemfuture growth market and are working to ensure future"Holfee" for mini excavators (excavation construction

profitability by creating a medium-term roadmap andmachines), and started selling the product frompromoting cost reductions.

December 2022. Holfee is a guidance system that

Moreover, we are promoting digital transformationtransmits information on the target depth and slope of(DX) of our operations and are working to build a system

excavation to the operator's smartphone at the site ofthat will quickly lead to business improvements byground excavation. We believe that this is a socially

digitizing indirect operations and data analysis of income

significant product that will help solve the laborand expenditure status.

shortage and technology inheritance issues in theLast year, in light of the fact that we had to postpone

construction industry these days, and we hope that it

our business target of 5% operating profit margin to one

will improve the work efficiency at civil engineering

year, which was originally scheduled for fiscal 2023, weand construction sites, and that its use and dissemi-

will speed up decision-making and implementation

nation will expand.

and continue these measures to improve profitability.

Windshield Display

13

Nippon Seiki Integrated Report

01

continue working in a healthy and energetic manner.

Our group considers responding to climate change

activities of our group to achieve sustainable devel-

as one of our important managements issues andworks to reduce our environmental impact in ourcurrent medium-term management plan. Initiatives
industry, which is the core business of our group, areunavoidable social issues and have an impact that

“Nippon Seiki Group’s human rights policy” wasenacted in February 2023. In order for all business
opment, we need to continue to meet the demands ofa global society that fulfills our responsibility torespect human rights. We reiterate our group's

02

stance on human rights and will strengthen andNippon Seiki Group's Value Creation Process

towards carbon neutrality in the automotive parts

Overview of Nippon Seiki Group

Responding to climate change
and human capital management

expand our human rights initiatives by establishing
this policy.

can affect the sustainability of the business itself.
In response to increasing social demand forachieving carbon neutrality, we have been proceeding with research and development of carbon neutral
meters as part of our efforts to reduce the environmental impact of our products. We have developed acarbon neutral concept meter that uses biomass
material mixed with rice resin and recycled resin, and03

Carbon Neutral Meter

ESG Initiatives

the product is currently in the evaluation stage. We
are also working to reduce the usage of the total
amount of raw materials by pursuing miniaturization
and weight reduction.
Another important management issue is an investment in human capital, which is essential to increasing corporate value over the medium to long term. We
believe in the way of thinking that “human resources
are our most important management resource” andrecognize that developing autonomous thinkers
and act on their own) is an extremely importantmanagement issue.
Our management vision “Challenge & Change”
embodies the will of all of us to aim for personal
growth by having a mindset of taking on challenges
without fear of change. We will work to promote
diversity so that everyone can demonstrate theirindividuality and abilities and play an active role,
regardless of age, gender, race, nationality, or disability. In order to foster such "spirit of challenge" andzational culture, we are promoting various environmental improvements and currently reviewing our
personnel system.

These will be scheduled to begin

operation from next year. We aim to promote healthmedium-term business plan for the next three years.
Under the new plan, in addition to improving
profitability, we will formulate a capital policy with aneye toward improving capital efficiency as well as04

reviewing our shareholder return policy. By doing so,
we aim to develop our business over the medium tolong term and maximize shareholder value.
In the next medium-term management plan,“Contribute to the prosperity of society by providing
high-value products and services from the customer's
perspective” being our group management philosophy in mind, our focus will remain unchanged: toproduce high value-added products and services byrefining, evolving, and developing our technology. In

05

addition, we will strive to further improve corporate
value with fostering a corporate culture that takes on

Company data

"diversity" as part of our corporate culture and organi-Now, our company is working on creating a

Financial Statements(people who are self-disciplined, think by themselves,

Toward the next medium-term
management planchallenges as well as the change of lean management. We appreciate your continuous understanding
and support of our group.

management and improve work-life balance andRepresentative Director President

strive to create a system that allows our employees to

President Executive Director

Nippon Seiki Integrated Report14

Sustainability Policy

Nippon Seiki Group
Sustainability Policy
We will pursue the realization of a sustainable society by solving social issues and emphasizing dialogue with all stakeholders through corporate activities that balance social and economic value based on our management philosophy andgroup vision.

Realization of Management philosophy
Implement sustainability management & provide circular economy

Capitalinvestment

Creation of economic value

Creation of economic value

Environment

Perceptual
support・Financial capital・Human capital・Intellectual
capitalDevelopment ofESG
measures・Social andrelational capital・Natural capital・Manufacturing

Socialcapital×

Evolution ofcore
technologies

Governance

Providingtotalsolution

Solving social
issuesLifestyleinnovation

Contribute to
SDGs

Stakeholder engagement: customers, local communities, business partners, shareholders, employees[ Shared value creation framework adopted by Nippon Seiki Group ]Nippon Seiki Group will work to realize the development goals of SDGs while taking an Outside-In
Business Approach to contribute to society throughits core business, based on the concept of CSV(Creating Shared Value), which aims to achieve bothbusiness development and solutions to social issues
by leveraging our strengths.

Social(outside)
Expansion of stakeholders

Outside-In
Business Approach

New products/services
for "future customers"

Development of
new products andservices based on
solutions to social
issuesCustomers

Existing products/services
for "existing customers"
Market in

Product out

Starting point ofsocial issues（inside）

Expansion of products & services

15

Nippon Seiki Integrated Report

01
Overview of Nippon Seiki Group

Relationship of Our CSR Important Themes and SDGs 17 Objectives
The figures in the table are those related to the activities of our group from the 169 targets (1.1-17.19) of the SDGs.

ESG

Important CSR theme
3.6

To reduce the burden on drivers
due to the evolution of HMI

3.6

11.2
11.2

9

Reduction of materials by reducing
the size and weight of products

02

9.4

Solutions to regional issues throughcollaboration between service businesses

12.8
9.b

Creation of new service businesses

6.3
6.6

Environmental Management System

7.2
7.3

8.7

9.4

11.6

12.5

13.1
13.2

Global warming prevention[electric power]

7.2
7.3

Prevention of global warming[heavy oil]

7.2
7.3

11.6

13.1
13.2

Prevention of global warming[city gas]

7.2
7.3

11.6

13.1
13.2

Water conservation(water supply and sewerage)

6.6

03
12.5

9.4

12.5

Develop eco-friendly products

9.4

12.8

3.9

14.1

12.4

6.3

Promotion of green procurement

7.2
7.3

Measures against climate change(CO₂ emissions)

7.2
7.3

12.4

8.7

Emergency Response(Strengthening BCP Response)

13.1
13.2

11.6

13.1
13.2

11.b

13.1

14.3

5.c

8.5
8.7

Work-Life Balance / Reform ofwork style /employee satisfaction

5.4

8.3
8.5

04

10.2

17

3.4
3.d

14.4

Society

Increasing productivity amid declining
birthrate and aging workforce

8.1
8.3

Occupational Health and Safety
Management Systems

8.2
8.5

9.1

4.4

13.3
9

Quality Management System

16.2/16.3
16.4

8.3
8.9

5.1

9.2

10.2

12.b

13.1

15.1

Company data

4.1
4.7

Contributing to the Community(Global & Domestic)

05

17

8.7

Supply chain management

17
17

Governance16.1/16.3
16.5

Compliance

9.c

Information Security

16.3
16.5

Corporate Governance /Internal Control System

Our group's efforts

17

Financial Statements

Diversity Inclusion / Human Rights /Gender/Disabled

Fostering and Education of Personnel
with Autonomous Thinking

15.1

15.1
15.4

6.6

Conservation of biodiversity

ESG Initiatives

Environment

11.6

Circular economy

Health management

15.1

13.1
13.2

Reduction of Waste Emissions /Reuse / Recycling

Chemicals / Management ofchemical substances in products

Nippon Seiki Group's Value Creation Process

Business activities

Improving Safety by Increasing
the Number and Rate of HUDs Used

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

Nippon Seiki Integrated Report

16

Value creation process

The essence of a company is the creation of common values. Our group will make use of a variety of capital (management resources) topromote our business and enhance our corporate value by providing value to our customers, shareholders, investors, employees, communities and other stakeholders. Created value increases capital and establishes the foundation for further development.

Business Model for solving social issues(creation of positive impact)

Capital to Use

Financial CapitalSound financial base with sufficient capital interms of both quality and quantity

Human capitalsolutions to meet

specialized technologies

Accumulation of capitalthrough business
operations and internalbusiness circulation

Intellectual capital

Ability to respond to customer needs throughadvanced manufacturing technologies accumulated through this specialized know-how

Wide range of highly

customer needs

Corporate culture that emphasizes Change,
Diversity, Health and Challeng

To accumulate comprehensive strengthand advanced expertise as a manufacturing company, and to collaborate within thegroup
Integration of diverse functions and capital
expenditure

Providing

Customer
Input

Collaboration forcustomer-oriented proposals
OutputRelationship
Continual improvement ofprofessional services

Social and affiliated capital
Excellent and Strong global customer network

Natural capitalManagement Foundation Supporting
Business Models

・Governance ・Risk management ・Compliance

Environment, ecosystem, and ecology

Manufacturing capital
Facilities, equipment, and infrastructure
for manufacturing products and providing
services, etc.

Social and economic environment
Geopolitical changes in the political economy, an increase in new
areas of automotive industry CASE response, an increase in safety
demands, expectations for high-value-added products, reforms in
car ownership, the prolongation of the low interest rate era, andcorporate governance reforms

Circulation andMateriality

17

Nippon Seiki Integrated Report

01
Overview of Nippon Seiki GroupStrengthening and Strengthening
Sustainable Expansion of Operations

Five Business Pillars■Resin Compound business

02

Realization of the SDGs

■Automotive components business■Consumer products business

Creating value for society

Nippon Seiki Group's Value Creation Process

To Stakeholders
Maximizing the value
provided

Customers■Automobile sales business■Service BusinessBusiness

03
ESG Initiatives

Key word for business

Employees▶ Global▶ Manufacturing▶ Network

Shareholders▶ Regional▶ RetailSociety
Economy04

Creation of common value [CSV]

Financial Statements

Improvement of affluence

Society

Improvement of well-being

NatureMaintaining stocks of natural capital

Conversion to capital

Financial capital / Human capital /Intellectual capital / Social and
Affiliated capital / Natural capital /Manufacturing capital

05
Company data

Expansion of CapitalManagement

Nippon Seiki Integrated Report18

Materiality
Extremely Important

Materiality-specific process- In selecting materiality In order for a company to carry out sustainable
activities, it is necessary to coexist organically interms of its impact on society and corporate value.
The impact of the matrix on social contribution on
the vertical axis and corporate value on thehorizontal axis are divided into four major categories

Compliance area in a soft law
・Peace and fairness, elimination of inequality and fair trade
・Support for poverty, human rights, NGOs, and NPOs
・Gender equality
・Conflict prevention, poverty and the eradication of hunger
・Global environment (ocean, atmosphere, and forests)
・Innovation of Industrial Fundamentals
・Safe and secure mobility society

Compliance area in a soft law

・Professional volunteers to contribute to society

At present, these are issues that are not yet
sufficiently addressed or new issues that need tobe addressed as social contribution activities.

・Ethical business (ethical consumption, corporate style)Compliance area in a hard law
There are many issues that have been addressedso far. It is an indispensable and important matterthat serves as the foundation for our corporate
activities.

Impact materiality area

Stakeholder communication area

Social Impact

The Group's social and business-oriented impact
materiality is grouped into two categories: social
issues to be solved through business activities,
and social issues to be solved in response to the
expectations of stakeholders.

We are still working to this end and will continue todo so in the future.

Compliance area in a hard law
・Legal compliance, governance, risk management

Important・Employment creation, education and training,
occupational health and safety

・Energy saving, recycling

Important19

Nippon Seiki Integrated Report

01
Overview of Nippon Seiki Group

Impact Materiality
Social issues that should be resolved through the five in-house businesses
Automotive Component Business

Consumer Parts Business

Providing a Safe and Secure Car Life

Innovation of technology baseRealization of a circular economy❶ traffic accidents Prevention❶ Proposing and providing comfortable lifestyles❶ Responding❷ To respond to, propose, and provide new lifestyles❷ Proposing❸ environmental conservation:❸ environmental conservation:

Improvement of visibility of HUD and meters,
popularization and penetration of HUD products❹ Sustainable supply chains:

MineralGreen Procurement, Responsible
Procurement and BCP*

❹ Conservation: Use recycled materials

Mineral■Promoting the spread of HUD, which contributes
to the prevention of traffic accidents throughside-sight driving

Comfortable
Products
through■Providing
Relationships with OEM Manufacturing of High
Quality, High Performance and High Reliability■Build a business (recycling business) that
responds to climate change related fields throughtechnological innovations in the materials field■Improvement of mountability of HUD in cars by
miniaturizing HUD to promote HUD■We propose and provide new products that
respond to social and industry changes andneeds, such as the corona outbreak, thedeclining birthrate and the aging of society, andthe digitalization.

■Improving customer satisfaction in a wide rangeof fields, including high-performance resins andclean resins (acquisition of management system
certification, expansion of sales to new business
partners)■Safe driving and the pleasure of driving by
reducing the burden on drivers (HMI evolution,
integrated cockpit development, development of
next-generation sensors)［ ▶P21-22 ］［ ▶P23-24 ］［ ▶P25-26 ］

Automotive Sales Business

Service Businesses

Realization of a well-being car life

Realization of a well-being and the creation of effective time03

❶ To offer ease of use and comfort (pursuit of convenience and comfort)

needs

ESG Initiatives❶ To propose and promote new sales in response to social changes and social

02

Energy conservation by contributing to theweight reduction of products

Nippon Seiki Group's Value Creation Process

Energy saving by weight reduction (compact
and thin), use of recycled materials❸ Conservation: Use recycled materials

thematerials solutions that take theenvironment into consideration(Development of New Products)

Energy conservation through downsizing andweight reduction

Green Procurement, Responsible
Procurement and BCP*

to and contributing totechnological advancement of customers(easy-to-use products)❷ environmental conservation:❹ Sustainable supply chains:

Plastic Compound Business❷ Eliminating complications and solving problems (promotion of efficiency)❷ Improving the quality of life of customers❸ Providing Risk Preparation and Reliability❸ Close relationships with local communities and contributing to them

❹ Close relationship with the local community, contribution to the local community,❹ Customer Satisfaction and Improvement of Convenience (Collaboration withand new lifestyle proposals

Other Industries, Creation of Subscription Opportunities)■Offering products and services that respond to changes in society (mobility
society), and offering various opportunities for sales and use of mobility■Outsourcing business processes Efficiency of society through BPO (Business
Process Outsourcing)■Development and expansion of one-stop services for community-based car life(new cars, used cars, services (inspection, inspection) and insurance)■Support for digital transformation (DX) of customers and society■Realizing affluent lifestyles by proposing new services tailored to local［ ▶P27-28 ］［ ▶P29-30 ］

Social issues to be solved in response to stakeholder’s ecpectation

・Fostering the Next Generation Leaders andRaising Awareness・Diversity
・Occupational Health and Safety

・To ensure product quality
・Improving productivity
・Sustainable supply chain
・Responding to Climate Change
・Energy conservation and recycling［ ▶P37、41-42 ］

04

Coexistencewith Society

Governance /Compliance

・Promotion of health management
・To contribute to and interact with local
communities

・Promotion of compliance and compliance・Compliance with the Compliance Action
Guidelines
・Enhancement and evolution of information
security management
・BCP*Business Continuity Plan management
・Intellectual Property Protection

Monozukuri /Environment［ ▶P33-36,38 ］［ ▶P39-40,44 ］

Financial Statements

Utilization of
Human resources［ ▶45-48 ］※ BCP：Business Continuity Planning

Stakeholder communication area
・Donations and volunteers

Company data・Employee engagement

05

・Health management

・Disaster prevention support, cleanup activities, and tree-planting activities
・Nagaoka fireworks, folk dance flow, and support for NPOs

・Regional exchange programs (soccer classes, on-site visits)

Extremely Important

Impact on Corporate Value
Nippon Seiki Integrated Report20

Nippon Seiki Group Business
Automotive parts businessWe continue producing our products by accurately conveying the continuously changing information to the driver, pursuing theimprovement of convenience and comfortability, and paying meticulous attention to every single part. With our eyes focused on
the environmental changes and technology progressions, we will play our role of protecting people’s safety and security, runningas the top leader of meter developers.

01

Strength ofAutomotive parts business

Accumulated
long-standing
development know-how

Meters and sensors for vehicles and motorbikes being produced

Comprehensivenessand adaptability tocustomer requirement

and sold worldwide: this is the core business of our group. In recent
years we have focused on HUD (Head Up Display), which projects

Automotive parts
business

information such as speed and navigation onto the windshield in acar. We also supply substrate mounting service for other in-car parts
makers.
Various information can be monitored by the sensors, and they
are conveyed to a driver through optimized forms shown on themeters. In this way, we contribute to safety drive and, at the same

3STRENGTHS
Globalproduction network

Technologicalcapacityof expanding
business fields

Footprint of eachregion worldwide

Optical technology for HUD,
Global substrate mounting
experiencestime, create the impression of driving.

02

Overview of the fiscal year endingin March 2023

Sales have recovered to 2019 levels due to the reduction in the impact of the newSales

coronavirus. Although we were affected by production adjustments by automakers(million yen)

due to a shortage of parts, including semiconductors, and soaring logistics and

250,000

parts material costs, we have been working on strengthening profitability through200,000

measures such as stable production by securing safety stocks and optimization of

150,000

logistics.

100,000

In the automotive parts business, which is our group's main business, we have

50,000been continuing to work on improving profitability. We are striving to build a system

0that can generate stable profits by flexibly responding to changes in the external

216,483
170,818

March 2022

March 2023

environment, such as promoting VA (Value Analysis) / VE (Value Engineering),
reforming business processes, suppressing design and development costs, andreviewing product packaging specifications.

Operating Profit(million yen)

1,179

2,000
0

Achievable SDGs
goals throughthe activity-2,000-4,000-6,000-5,857

March 2022

21

Nippon Seiki Integrated Report

March 2023

01

External Environment

Opportunities

Risks■Popularization of integrated cockpits■Acceleration of the movement toward reorganization of the■Increasing demand of EMS due to electric vehicles■Change in consumer sentiment (from possession to sharing)■Tightening the regulations of supporting device for safety drive■Expansion of demand for vehicles and motorbikes in newly
developing countries

Overview of Nippon Seiki Group03

vehicle industry and cross-industrial alliance■Increased competition in market due to software-computerized
vehicles■Taking in new entrants from consumer electronics industry

02

Growth strategy

Bearing in mind the supply of safety and security to the society,activities for end users (drivers). In addition, not only producing

we work on maximizing customer satisfaction in each businessoutside Japan, but we will accelerate to form a localized volume

domain: meters, HUD, sensors, and in-car EMS.

production process including production design and procuringparts. Electric vehicles are expected to be expanding in theof integrated cockpits in-cars, as well as the reinforcement of

future; with our quality and adaptability which have been cultivat-

cost competitiveness of meters for motorbikes in India/ASEAN

ed in the in-car industry, we continue to progress the coreregions. In order to further popularize Head Up Display, we willtechnologies such as expansion of in-car EMS business andstrengthen our competitiveness by developing compact andproduct developments by the combination of sensors andsimple specifications and increase awareness through PR

systems.

03
ESG Initiatives

As for meters, we will drive forward the technical development

05

Nippon Seiki Group's Value Creation Process

04

KPI
FY2023 target

7% reduction

15% reduction[2] Number of next-generation sensors/new sensors developed

2 items

4 items[3] Number of patent applications (meter related)

57 items

63 items

4.97% applied (recycled PP materials used)

10%[1] HUD volume (compared to previous year)[4] Recycling rate of meter resin parts

04
Financial Statements

FY2022 results

TOPIC
Developing products that contribute to
reducing traffic accidents

Developing products that contributeto solving social issues

We exhibited the Windshield display, our new product, at the
Automotive Engineering Exposition held in May, 2023. This
product reflects the display on the black part at the bottom of thewindshield and is characterized by better visibility with less eye
movement than conventional meters. This reduces the time whichtakes to recognize information, contributing to improved safety.
Our group will continue to contribute to reducing traffic accidents.

We have developed Holfee, aguidance system for small-sized
excavators that utilizes oursensing technology.
"Holfee" is a guidance systemthat helps solve labor shortages
andtechnology
inheritanceissues in the constructionindustry. At the ground excavation site, information on thetarget excavation depth andslope is conveyed to workers,
which helps in construction work.

05

Nippon Seiki Integrated ReportCompany data

2D handy
machine guidance22

Nippon Seiki Group Business
Consumer parts business
As for consumer parts business, we have made use of the technologies cultivated in the in-car business, and have been developing, producing, and selling products such as home appliances, office equipment, controllers for industrial equipment, and operation units as interfaces between human and machinery.

01

Strength ofConsumer parts business

Expansion of
our own brandApplicable to propose
technology-mix from our own
technologies/OEM

We efficiently, smoothly, and comprehensively support customers
under the partnership by supplying “optimizing” technology thathave been cultivated to meet customer needs. With our technology

Consumer parts
business

cultivated by the in-car parts business as well as continuous
process from designing to production, we meet various customers’
requests globally and supply reassuring products with excellent
quality, performance, and reliability. New value combined withproduction/technology based on the current business performance

3STRENGTHSBusiness
Cross-proposals
experiences withamong products, techmajor manufacturers
nologies, and customers
of assembled products

will be supplied aggressively together with our own branding
development.

02

Think outside the existing
business framework for newvalue-added proposals

Long term relationshipwith OEM

Overview of the fiscal year endingin March 2023

In the fiscal year ending in March 2023, both sales and operating income increased
significantly due to the alleviation of the impact of the reduction in production of our
products affected by the global tightening of semiconductors and electronic compo-

Sales(million yen)

25,000nents in the previous period. Although sales increased in the previous period

20,000compared to the year before, due to the semiconductor shortage, some models

15,000were unable to keep up with the increase in customer orders. However, as the parts

10,000procurement environment improved, the backlog of deliveries from the previous

5,000

period was cleared and sales increased significantly. As sales increased, profits0

also increased, resulting in increased sales and profits in the fiscal year ending

19,41912,444

March 2022

March 2023

March 2023.
In the future, we will endeavor to achieve even more stable production bystabilizing deliveries and proposing ways to shorten the supply chain by leveraging
our group's production network.

Operating Profit(million yen)

1,349

1,500

Achievable SDGs
goals throughthe activity

1,000
500
138
0

23

Nippon Seiki Integrated Report

March 2022

March 2023

01

External Environment

Opportunities

Risks■Changes in global strategies of home appliance and office■Post-Covid-19 demand trends

equipment makers■Acceleration of all-electric home

■Change in roles of office equipment (Expansion of multifunction machine)■Change in home appliance demand due to climate change

Overview of Nippon Seiki Group03■More strict regulations of environment and energy conservation worldwide■Decrease in home appliance sales due to economic fluctuations overseas■Stabilization of parts procurement

Growth strategy
production/sales business for our flagships: air-conditioners

such as sales, development, design and production, we aim toand operation panels for office equipment, in addition to the

supply values that can contribute to maximize the value, to bemarketing promotion, we will try to expand the business to ourmarket-oriented high quality, and to improve QOL to our custom-

existing customers. We also aim to enlarge our business domain

ers. Making use of sensing technology and data analyzing/appli-

by utilizing our group assets which have been developed by thecation technology, which are our core technology, we will develop

worldwide production sites/processes and in-car parts business-

new products grasping the change of customer demand in thees. As for new market development and new product develop-

future. Accordingly, we intend to expand the business not only inment, we will defy the boundaries of the current business andthe BtoB but also in the BtoC domain, and further increase

existing products: we will fuse together with various fields,

customer satisfaction.

customers, and technologies to propose newly value-added

By the increase of profitability as well as the expansion of03
ESG Initiatives

By improving quality as well as productivity of all the processes

05

Nippon Seiki Group's Value Creation Process

0402

products.

KPI
04
FY2023 target[1] Number of orders received in the new domain

2 items

1 item[2] Number of new products introduced into the market

2 items

1 item released

Financial Statements

FY2022 results

TOPIC
Development of air quality sensor productsHome appliance manufacturers, who are our group’s customers,
are promoting local production overseas since the air conditioning equipment market is expandingaround the world due to climatechange and economic development inemerging countries. To follow thismovement, our group will utilize theproduction network cultivated throughour automotive parts business topropose optimal production locations
to our customers.

In 2021, we launched a CO2Lamp that detect and display indoor
carbon dioxide concentration. We are currently developing a
product that displays "air quality" including other components by
utilizing our sensing, analysis, display, and communication
technologies.

Nippon Seiki Integrated Report05
Company data

Expansion of utilizing overseas production bases

24Nippon Seiki Group BusinessResin compound business
Developing coloring business on high-performance resin materials of transparent resins (for vehicles, LED lighting, lenses,
medical use, etc.).
Expanding our business in Japan, Thailand, China, etc. Our main customers are major chemical manufacturers.

01

Strength ofResin compound business

Quality oftransparent resin
Long-range accumulated
production know-how oftransparent resin

In resin compound business, the sales of high functional plastic
materials and high value-added products like optical products withsuper low foreign substances utilized by the advantage of ourResin compoundbusiness

strengths are further promoted acceleratingly for constructing astable revenue base. We will try to contribute to maximizing customer’s product values by meeting the needs of light-weight vehicle
body (as the replacement of metal to plastics) due to the global
environmental change as well as proposing the solutions for the use

Clean production
environment to realize
lower foreign objectsof environmentally-friendly plastic materials.

02

3STRENGTHS
To meet small lot
requests by flexible
production system

Production under clean
environment
To be able to undertake
several inspections

To be able to meet various
customers’ requests

Overview of the fiscal year endingin March 2023

In the fiscal year ending in March 2023, although sales exceeded the previous
period, profits decreased due to a decrease in orders for materials for highvalue-added optical lenses, an increase in orders for low-value-added items, andthe impact of soaring electricity rates.
In the future, we will develop film materials that take advantage of our strengths intransparent, low-contamination materials, materials for medical care, food, andSales(million yen)

10,0008,727

March 2022

March 2023

7,500
5,000

cosmetics that require a high level of quality control management, and highly

2,500

functional materials equipped for automobiles in anticipation of the electrification of0

automobiles. We will focus on expanding sales for those materials. We will strive to

8,626

secure a stable earnings base by increasing the ratio of high value-added products.
Operating Profit(million yen)

500
400

Achievable SDGs
goals throughthe activity

300

Nippon Seiki Integrated Report

158

200
100
0

25

421

March 2022

March 2023

01

External Environment

Opportunities

Risks■Technologies of transparency and lower foreign objects, and■Unstable orders of in-car applications■Extensive makers and large number of deals with trading■Increase in oil prices and rising utility costs

environment
companies■Expansion of using recycled products

Overview of Nippon Seiki Group03■Unstable orders of optical products■Market slowdown for final products■Increased demand of highly functional resin due to the trend oflight weight in electric vehicles

Growth strategy

We will engage in quality improvements as well as the promo-

our group.
In the future, light-weight vehicle body due to proliferation of

products and services mainly driven by “transparency, cleanli-electric vehicles will be required. In addition to this, the needs forness, and small-lot productions” which are the Nippon Seiki

high functional resins having its functions of thermal resistance,

Group’s strengths. As for quality improvements, we will differenti-

light resistance, and impact resistance as the replacement of

ate from our competitors by the promotion of acquisition of theheavy-weight glasses and metals will be risen. Therefore, we will

certifications such as GMP and HACCP that are known as

maintain the current market share of clean resin in optical lenses

controlling systems for maintaining safety and quality for medical

and will also penetrate into the high functional resin market inproducts and foods, and consequently, customer satisfaction will

which the demand is expected to grow.

be improved. In terms of recycling activities, one is to obtain the

The worldwide demand for resin compounds has further risen.

items of contract manufacturing from customer’s recycling

In this circumstance, we will continuously evolve ourselves byactivities. The other is to expand the use of recycling products inutilizing our strengths and drive into new markets.

03
ESG Initiatives

tion of recycling activities in order to maximize the values of our05

Nippon Seiki Group's Value Creation Process

04

02

KPI
FY2023 target[1] Number of new business partners for clean items(including GMP-required items)

2 companies

3 companies[2] Promotion of individual company’ s recycling efforts(reduction of waste materials)

17 tons reduction

34 tons reduction

04
Financial Statements

FY2022 results

TOPIC
Promotion of ISO22000 acquisition

05
Company data

We are focusing on new order expansion for medical care andfood materials, and plan to obtain ISO22000 certification in
March 2024 in order to meet thehigh-quality demands of ourcustomers. We will continue tosupply safe and reliable resinmaterials by establishing a
manufacturing and management
process that is of higher quality
and is cleaner than the normal
resin compounding process.

Expansion of outsourced processingof bio and recycled materials
The number of inquiries andprototypes has been increasing
due to the increasing demandfor bio and recycled materials.
We are focusing on the technological development of biomaterials, as we anticipate that themarket will grow significantly
and social demands will also
increase in the future.

Nippon Seiki Integrated Report26

Nippon Seiki Group Business
Car sales businessGroup companies conduct new and used car dealership,
car-rental and car-sharing businessGroup companies

HONDA Yonrin Hanbai
Nagaoka Co., Ltd.
Sales business for HONDA carsin Niigata

01

Niigata MAZDA
Co., Ltd.

Sales business for MAZDA carsin Niigata

CAR STATION Niigata
Co., Ltd.

Sales and used-car business for
SUZUKI / DAIHATSU cars in Niigata

Strength of
Car sales business

Operations of TIMES CAR in Niigata(Car-rental and car-sharing business)

Ability to makecustomer-oriented
proposal
Understand customer’s
needs and provide
customer satisfaction morethan expected

Our market widely covers all areas of Niigata prefecture. We havean overwhelming number of customers, and our financial base isstrong and stable.

MAZDA mobility
Niigata Co., Ltd.

In addition, we have been tackling to strength-

en after-sales service as well as to construct a next generation of

Car sales businesssales system utilizing the Internet and digital technology next

3STRENGTHS

generation type sales system. As a professional team fostered by

Branding powerof products

the ample education system, these are aiming for obtaining customer satisfaction more than expected.
For solving several problems in our society, we always try to

Abundant
human resources
Consolidating
professionals ofservices by a fulfilling
educational system

Dealing with a lot of major
makers throughout theprefecture

create new values by foreseeing the movement of the future market
demand as well as social values, applying community-based andcustomer-oriented sales approach, and being innovative.

02

Overview of the fiscal year endingin March 2023
Sales

Although the impact of the new coronavirus has been mitigated, the global(million yen)semiconductor shortage continues, and even if we receive new car sales orders

25,000(contracts), customers continue to have to wait for delivery, resulting in chronically

20,000long delivery times. However, in order to make up for delays in the supply of new

15,000cars, each company in our group focused on strengthening used car sales, car

10,000maintenance, car insurance, and commission income, as well as improving

5,000

operational efficiency and streamlining operations, resulting in increased sales and0

profits. The production situation of automakers has finally improved over the past

22,427

23,402

March 2022

March 2023

two years, and as electrification and subscriptions continue to advance, we areworking on developing new ways to purchase cars, making forward-looking
investments, and developing human resources.

Operating Profit(million yen)

1,200
1,000

957

1,090

800

Achievable SDGs
goals throughthe activity

600
400
200
0

27

Nippon Seiki Integrated Report

March 2022

March 2023

01

External Environment

Opportunities

Risks■Arrival of a new form of perception by CASE

■Market shrinkage due to lower population of juvenile■Active new function development and new sale method
development■Great alternative business opportunity due to EV paradigm■Dealer reorganization movement by car manufacturers■Top-ranked core earning power nationwide■Influenceshortageofinternational

conflicts,

andsemiconductor■Concerns about delay in following up infrastructure and regulations■Concerns about the unpopularity of job seekers in this industry

Growth strategy

The arrival of a new form of perception by CASE as well as a

and accelerate alliance deployment, and try to enhance

new lifestyle led by decreasing population, digitalization andfunctionalities that we lack, and to gain additional regions where

Covid-19 pandemic are now asking us to find matching services.

we supply our services.

In these circumstances, we will establish our business scale andFurthermore, our group is trying to evolve the business andits domain in the vehicle sales business. Furthermore, we willbusiness format of car dealerships, which are about to undergo

endeavor to raise the degree of customer satisfaction for eachmajor changes in the CASE era. We will promote the creation ofand every customer.

a conglomerate that combines the automobile sales businessand other industries, and not only sell and maintain cars, but also

will acquire and establish new businesses by the hybrid deploy-

improve experiential customer satisfaction through synergies

ment: the investment for restructuring stores located in advanta-

with our group's businesses. We will propose and provide ageous places and consumer lock-in by IT. We will exploit M&A

well-being lifestyle centered on cars to each and every customer.

03
ESG Initiatives

In terms of the expansion of business scale and domain, we

05

02
Nippon Seiki Group's Value Creation Process

04■Increase the burden of investment to CASE

Overview of Nippon Seiki Group03

KPI
FY2022 results ※1

FY2023 target ※2[1] Residual value sales ratio

29%

35%

[2] Core revenue coverage ratio

102%

Aim for over 100%, exceeding the previous year's results[3] SG&A sales ratio

19.9%

Compared to previous year’s results -1point[4] Indirect personnel ratio

27.7%

Compared to previous year’s results -1point

Financial Statements※1 Group dealer best value

04※2 Each group dealer companies

TOPIC
Niigata Mazda “Joetsu store” renovatedas a new generation store

05
Company data

Niigata Mazda “Joetsu Store'' was renovated into a new generation store with a new Mazda concept in January 2023. We aim tofurther improve our brand power by creating a comfortable
service and hospitality space in a highly visible showroom with astrong presence by taking advantage of this new construction
renovation. In addition, we will
strive to further improve thequality of after-sales service by
expanding the number ofservice factories that conduct
vehicle inspections and otherinspections.

Joined the franchise chain “Car Seven”,
a used car purchasing store, and opened its
first store in Joetsu City in Niigata prefecture.
Car Station Niigata joined as amember of the ”Car Seven”
franchise chain (FC), a major
used car purchasing store brand,
and opened its first store, “Car
Seven Joetsu Store'' in April
2023. We aim to expand ourused car business by strengthening car purchase utilized with thecompany's “Safety Declaration''brand strength.

Nippon Seiki Integrated Report28

Nippon Seiki Group Business
Service businessIn order to meet various needs, Nippon Seiki Group have deployed the following two service businesses: Nissei Service Co., Ltd.
dealing with logistics, insurance agencies, advertising agencies, and food services; NS Computer Service Co., Ltd. dealing withinformation system development, networking, and software and hardware development.

01

Strength ofService businesses

Sales force andperformance toend-users

Our service businesses have provided wide ranging services for the

Wide-ranging service
globally and locallycustomers worldwide as well as in the domestic Niigata prefecture.
We offer optimized solutions to meet customer needs from wide

Service businessbusinessranging system configurations. To maximize customer satisfaction,
we promote the communications and operation improvements byforeseeing the market needs and social values in the future. Our
know-hows from various service businesses can create new values
and then we will try to offer both profitability and social
problem-solving.

02

Businessdevelopment
based on technology

3STRENGTHS
Stable financialbase and group
network

Optimized proposals fromthe variety of system forms
to meet customer needs

Create new values
from Nippon Seiki’s
know-how

Overview of the fiscal year endingin March 2023

Sales decreased due to a decrease in cargo volume in the logistics business
affected by production adjustments in the automobile industry as well as a difficult
environment in the food service business. In addition, sales in the IT-related

Sales(million yen)

10,000business dropped compared to the previous fiscal year, when demand for services

8,000

for local governments was very strong. However, profit increased thanks to the

6,000

increase of the highly profitable BPO business, making a significant contribution to

4,000

profits.

2,000

We will continue to strengthen our earnings base by providing new products andservices that more closely reflect customer needs in response to social situations,

0

7,689

March 2022

7,064

March 2023

and by strengthening functions across the entire value chain.
Operating Profit(million yen)

800
600

Achievable SDGs
goals throughthe activity

Nippon Seiki Integrated Report

588

400
200
0

29

520

March 2022

March 2023

01

External Environment

Opportunities

Risks■Arrival of new lifestyle due to post-corona virus■Demand of deoxidation in logistics services■Social needs for sustainable business development■Changes in industrial labor structure■Change of consumer’s lifestyle■Socioeconomic productivity and hospitality & society■Changes in energy supply structure■Concerns about the unpopularity of job seekers in this industry

02
Nippon Seiki Group's Value Creation Process

04

Overview of Nippon Seiki Group03

Growth strategy

While market needs for services are diversifying, we will respond

In order to respond to changes in business content in the new

to our customers' BPO (business process outsourcing) needs bynormal era, we will propose BPO services to private companies

maximizing our strengths and deciding the areas where weand local governments in the information system services

should move into using innovation streams and comprehensively

business domain more than ever. We will provide our customers

integrating existing technologies and functions.

with value such as effective use of human resources, concentration on core operations, and high-quality business processing by

the supply amounts of existing products and services, and try tovisualizing problems and issues through the operation of the

expand the business by developing new products, exploring new

systems we developed. We aim to solve social and regional

agencies, and reinforcing sales activities. By grasping the needs

issues and contribute to the realization of a more prosperousof now and the future in a timely manner, we will endeavor tosociety by expanding BPO services.

03
ESG Initiatives

As for food services and retailing businesses, we will maintainsolve local and social problems.

05 KPI
FY2023 target[1] BPO sales of individual demand

1,452 million yen

1,500 million yen[2] BPO sales of public demand

1,866 million yen

2,000 million yen[3] Retail products service

2 models released

2 models released

54 companies

380 companies[4] Number of distributors nationwide

04
Financial Statements

FY2022 results

TOPIC
Business partnership with Osppoc Co., Ltd.,a third-sector company in Niigata prefecture

Our group's logistics subsidiary, Nissei Service, is currently
constructing a new logistics warehouse in Nagaoka City, where
our head office is located. The warehouse is scheduled to begin
operations in June 2024. We will consolidate our logistics basesin the Nagaoka area toimprove efficiency, and aim
to expand our business bystrengthening our logistics
service proposals to acquire
not only our group products
but also cargo from outside
the group.

In February 2023, NS Computer Services, an information
services subsidiary of our group, concluded a business partnership agreement with Osppoc Co., Ltd. (headquarters: Tokamachi
City, Niigata Prefecture). Through this business partnership, we
will introduce systems for
local governments andprivate companies, expand
operation and maintenanceservices,andimprove
operational efficiency bysharing technology andknow-how.

Nippon Seiki Integrated Report05
Company data

Construction begins on a new distribution
warehouse in Nagaoka City.

30

ESG Initiatives

Nippon Seiki Group ESG Policy
We aim to achieve both medium-to long-term social
Nippon Seiki Group believes that the sustainable development of society is essential for enhancing corporate value
over the medium to long term and for expanding theprovision of social value to stakeholders.
In order for society to develop with sustainability, it isnecessary for our company, not only to pursue short-term
profits, but also to proactively address environmental andsocial issues from a medium-to long-term perspective. To
achieve this, strong corporate governance is a prerequisite.
By continuously approaching these issues, we believethat solving environmental and social issues will lead to thesustainable development of society. At the same time, we
believe that this will lead to an increase in corporate value
and medium-to long-term sustainability.
Our group consider not only financial information but also
non-financial information such as ESG (environmental,social, and governance) factors, and constructively engages
with stakeholders.

31

Nippon Seiki Integrated Reportdevelopment and business expansion.
When investing, we place emphasis on the perspectivethat ESG is an expansion of business opportunities, inaddition to the perspective that ESG, which has beencommon in the past, is a restraint of business risks.
"The perspective of ESG is a restraint of business risk" isthe perspective of being aware of environmental or social
risk factors, what measures are being taken in response tosuch factors, and what impact do you have on financial
stability.
"The perspective of expanding business opportunities" isthe perspective of whether we can capture changes in social
needs from environmental and social perspectives and linkthem quickly to value creation, thereby strengthening ourcompetitiveness and enhancing our corporate value over the
medium to long term.

01
Overview of Nippon Seiki Group

ESG Management of Nippon Seiki GroupIn order to lead our initiatives to materiality into corporate value improvement, we will manage ESG related indicators based on
our management policies and business strategies.
We will incorporate identified materiality into our strategies and plans and implement P DCA cycles.

02

Annual plan

Evaluation

Materiality
CHECK
Direction

DO
Disclosure03
ESG Initiatives

Implementationand promotion
On a critical issue

Progress
Monitoring

Stakeholder

PLAN

Engagement

Board of Directors

ACTION

Nippon Seiki Group's Value Creation Process

ReportCorrectionof shortfalls

Nippon Seiki Group's ESG Management Indicators
04
・GHG Emission

・Status of collective bargaining

・Energy user

・Board Independence

・Emission by sales volume

・Supplier Code of Conduct

・Energy consumption rate

・Ethics and anti-corruption policies

・Energy mix

・Information Security Policy
・Sustainability reporting

・Sustainability Disclosures

Financial Statements

・Board's diversity

・Water use

Environment
05

GovernanceSocialCompany data

・State of the influx and outflow ofhuman resources

・Ratio of male and female employees
・Percentage of temporary employees
・Anti-discrimination policy

・Occupational Safety and Health Policy
・Human rights policies

・Female Manager Ratio

・Employment rate of persons
with disabilities

Nippon Seiki Integrated Report32

Environmental Initiatives ( E )Basic Vision toward the Environment
Nippon Seiki group has established the Basic Environmental Policy, and has positioned global
environmental issues as an important management issue. With the aim of realizing a safe andsustainable society in harmony with the environment, the Group is making continuous improvements to achieve the realization of the Basic Environmental Policy as well as its environmental
objectives and targets. In the production activities of our manufacturing plants in Japan and aroundthe world, we are developing our business on a global scale to provide safety and security to society.
We will leverage the design and production technologies we have developed over many years withflexibility to enhance our comprehensive manufacturing capabilities through synergies. At the sametime, we will integrate the environmental management system of ISO 14001 (2015 version) into ourbusiness activities on a global scale and promote activities to reduce environmental impact.

Environmental Declaration
We regard the realization of a sustainable society as an important management issue and will continue to provide high-value products andservices to realize a safe and secure society in harmony with the environment through business activities that value "ambition," "society,""customers," and "people."

Environmental Impact of Nippon Seiki Group(FY2022)
EnergyWater consumption

Europe17,731kL
Total

Americas

6km³

37km³

Japan

6,221kL

Total

40,509kl

683km³(Conversion to crude oil)

Asia

EuropeAmericas1,532kL

Asia

15,025kL

Japan

284km³311km³
INPUT

Number offactories

Japan

4

Asia

9

Americas3Europe2

OUTPUT

Water discharge

Waste emissions
EuropeAmericas

6km³

22km³

Asia

33

Nippon Seiki Integrated Report

1,667t8,363t

6,660tJapan

274km³

Americas1,897tEurope1,083tAmericas

Total

574km³272km³Japan

Europe

671t

Total

CO2 emissions

Asia

2,426tAsia

34,196t

Japan

33,592t
Total

77,234t

01

Action themes

We set environmental objectives and targets every three years and continue to promote activities toreduce environmental impact. The results for FY2022 are as follows.

Item

FY2022 Results

Evaluation

All manufacturing
operation

1.0% reduction (per unit of production)(base year 2021)

1.4% increase×

All indirect
departments

1.0% reduction (electricity consumption)(base year 2021)

2.7% reduction◯

Heavy oil

Designatedmanufacturing sector

1.0% reduction (per unit of production)(base year 2021)

220.4% increase ※×

City gas

Designatedmanufacturing sector

1.0% reduction (per unit of production)(base year 2021)

19.6% reduction◯

Water supply

Designatedmanufacturing sector

1.0% reduction (per unit of production)(base year 2021)

129.2% increase ※×

Amountreleased

Designatedmanufacturing sector

1.0% reduction (per unit of production)(base year 2021)

20.5% reduction◯

Recycling rate

Entire company

99.90% or more

99.79%

×Environmental
factors for products

Design division

For each product group
Improvement of productenvironmental indices

12 themes are implemented,
with an average achievement rate of 92%

×Containing productsManagement ofchemical substances

Design division

Establishment of a system
to guarantee non-inclusion of RoHS2
additionally banned substances

1 theme is developed,
all of which achieved 100% target.

◯

Handling
management

Relevant division

Control and eduction of use of
PRTR-designated substances

6 themes are developed,with an average achievement rate of 100%◯

Environment for suppliers
Improvement of performance evaluation

3 themes are developed,with an average achievement rate of 100%◯Prevention of global warming

To reduce, reuse, and recycle waste

Develop eco-friendly products

Proper Managementof Chemical Substances

Procurement-related
departments

Promotion of green procurement
Global environment performance
improvement

CO2 emissions

TQM Promotion
OfficeTo gather environmental data fromdomestic and international affiliates

Continue to collect common environmental
data from manufacturing affiliates◯

Emergency response

Strengthening
BCP compliance

Risk Management
Related departments

Strengthening our ability to respondto natural disasters

Implementation ofsimulation test for BCP◯

Implementation of activities related
to biodiversity conservation

Conducted environmental conservation
activities outside the company(discontinued in the previous year)◯

Conservation of biodiversity○：Target achieved

Environmental
Conservation

General Personnel
Affairs Department△：Reduction/improvement over the previous year, but target not achieved※Due to the reduction in display manufacturing volume, the basic unit (efficiency) deteriorated.

02

03
ESG Initiatives

FY2022 Targets

Nippon Seiki Group's Value Creation Process

Subjects

Electric power

Conserving Water Resources

Overview of Nippon Seiki GroupThe Eighth Environmental
Target 2020-2022

×：Worsened from the previous year and target not achieved

04Power reduction throughair leak detection

We have applied the electricity consumption reduction
measures implemented by NS Group manufacturing companies using molding machine heat-insulating covers to ourmolding machines, reducing the electricity consumption of ourmolding machines.
In the molding machine cylinder, some of the heat from theheater was being released to the outside, resulting in energy loss.
By attaching a heatinsulating cover to themolding machine cylinderand reducing heat releaseloss, we were able to reduce
the power consumption of
the molding machine by
11%. This improvement isalso expected to be effective
in reducing air conditioning
power consumption in the
manufacturing department.

It was difficult to detect minute air leaks in the compressed airused on the production line. However, by visualizing the air leaklocation with an air leak detector, it is now possible to detect
minute air leaks that were previously unnoticed.
On the production line,
we repaired the leak points(10 locations) discovered
using an air leak detector
and stopped a leak of
112L/min. As a result, wewere able to reduce
compressor power loss by
10,400kwh/year.
This reduction activity is
being
expandedandpromoted at our international group companies.

Nippon Seiki Integrated Report05
Company data

Power reduction by keeping resin molding
machine cylinder warm

Financial Statements[ Initiatives Related to the Achievement of Environmental Targets ]34

Environmental Initiatives ( E )Information disclosure based on the Task Forceon Climate Change Financial Disclosures (TCFD)
In September 2022, Nippon Seiki announced its support for the TCFD recommendations (Task Force on Climate-related Financial Disclosures) andjoined the TCFD consortium.

The Nippon Seiki Group has a sustainability policy and considers responding to climate change to be one of the most important management

issues within ESG (Environment, Society, and Legal Compliance).

In order to further communicate with all stakeholders involved with our company, we will make further efforts to enhance information disclosure

related to climate change through our website, integrated reports, etc.

GovernanceIn order to strengthen our sustainability efforts, Nippon Seiki established a new "Public Relations

and Sustainability Promotion Department" within the Business Management Headquarters in
2022 to integrate sustainability, including climate change, and public relations activities.

Public relations and sustainability promotion, which is promoting the TCFD, review the risks

related to climate change and the impact on business activities, report policies, goals, progress,

issues, etc. to the Board of Directors and the Environmental System Review Committee, which isa meeting related to the environment, and develop and instruct policies and targets through theEnvironmental Committee, related departments, Group Management Meeting, which is a general
meeting of group companies, etc., share information, and manage progress.

Management discusses, approves, and gives instructions regarding policies, goals, progress,

and issues at the Board of Directors and the Environmental System Review Meeting.

COP 3, United Nations Climate Change conference,
Kyoto, Japan
Quoted form Japan Center for Climate Change Actions

Board of Directors
ReportCorporate Management
Headquarters

Approval, Direction(Environmental Responsible Official)
Report, information sharing

Corporate
Communications
and Sustainability

ReportApproval, Direction

Review Conference ofEnvironment System(President, Representative Director)

Environment Policy Review / Revise
Environment Management
Program Review

Policy and information sharing, Direction

Nippon Seiki Group
Climate Change and Carbon Neutral

Carbon Neutral Theme Activity Promotion

Environment Committee

Environmental issues consideration, Environment Management Program Implementation

Group Management Meeting

Policy Sharing・Sustainability Information Sharing

Business

Environment

SocialGovernanceRisk Management
Regarding the management of risks related to sustainability and climate change, the Environmental Management Officer and the "Public Relations
and Sustainability Promotion" section within the Business Management Headquarters serve as the secretariat to analyze risks that may have asignificant impact on the Nippon Seiki Group and each stakeholder. The results and KPIs are discussed and reported once a year at the Environ-mental System Review Meeting or to the Board of Directors.

Regarding the environmental management program, plans, KPIs, and implementation results are discussed and reported to the environmental

system review meeting.

35

Nippon Seiki Integrated Report

01
Overview of Nippon Seiki Group

Strategy
Due to its risks, climate change has various impacts not only on the business activities of ourcompany and its group companies, but also on us, the society surrounding them, and our
stakeholders.
In order to minimize the impact of risks and take advantage of opportunities, we identify the
impact (risks and opportunities) that climate change will have on business activities throughscenario analysis. We will then promote sustainable business activities by considering thepriorities and reflecting them in our business strategies.
IEA STEPS,WEO

1.5℃,2℃
scenario

IEA SDS,WEO

IPCC RCP8.5

IPCC RCP2.6

Scenario

Approximate
RCP Scenario

Scenario outline
Scenario of restraining temperature rise
under 1.5℃ with sustainable development

None

Introducing policies to restrain temperature rise
under 1.5℃
CO2 emission net zero in the late 21st century

02

Scenario of restraining temperature rise
under 2℃ with sustainable development

・Due to climate change, rising sea levels and increased rainfall will lead toriver flooding and an increase in areas affected by flooding, as well as
widespread droughts and an increased risk of drought.
・Increased risk of death and decreased motivation to work due to heat waves
and increased risk of infection

RCP2.6Introducing policies to restrain temperature rise
under 2℃
CO2 emission net zero in the late 21st century

Scenario of introducing climate change
measures with centrist development

Almost the same as the cumulate of eachcountries' reduction goal (NDC) until 2030

・Strengthening climate change control policies and regulations will lead to anincrease in carbon tax burden and increase in EV vehicles, ICE vehicles
decrease
・Development of new products and new technologies for a low-carbon society

Nippon Seiki Group's Value Creation Process

4℃
scenario

IPCC the 6th Assessment Report
SSP Scenario

RCP4.5close to RCP6.0
until 2050

Scenario of not introducing climatechange measures with regional conflict
development

Between
RCP6.0 & 8.0

Maximum emission scenario of not
introducing climate change measures withhighly fossil fuel dependent development

RCP8.5

Quoted form Japan Center for Climate Change Actions
Scenario

FactorCarbon Price

Energy Price(Electricity, oil, gas)

GHG regulatoin
become strict

Plastic
Restrictoin
RecycleRestriction

Heavy rain
and ﬂood
increase･Cost increase by carbon taxation to materials･Product weight saving, design andproduction engineering improvement･Introducing sustainable material･Cost increase by carbon taxation to fuel･Various renewable energy(solar,hydrogen, alternative fuel, etc.)･Cost increase by alternative energy investment･Choosing eﬀective investment･Energy cost soaring･Manufacturing cost increase by energy costsoaring･Transport cost increase by fuel cost soaring･Various renewable energy(solar,hydrogen, alternative fuel, etc.)･Restriction by GHG emmision regulation･Material cost soaring･High energy
development･Plastic emmision regulation･Material cost increase by plastic emission
restriction･Introducing sustainable material･Recycle material cost soaring, D&D cost
increase by design change to recycle material･Introducing sustainable material
・Recycle process development･Heavy rain, sea level rising･Operation stoppage by ﬂood
･Moving factory, warehouse location to avoid
ﬂood risk･Product shipping stoppage by supply chain
discontinuation･Tranformation to resilient factory･Unstable labor resource

・Introducing eﬃcientworking way

eﬃciency

Eﬀect

Countermeasures･Energy eﬃciency production(introducing hugheﬃciency machinery)･Energy eﬃciency design（material saving, alternative
material usage）

High

03

･Change to renewable energy, installing solar panel
Purchasing non-fossil certiﬁcate,reducing GHG byelectriﬁcation･Making GHG reduciton plan and implementation･Introducing internal carbon pricing

HighequipmentHigh･Reducing GHG by electriﬁcation･Change to renewable energy･Installing solar panel･High energy eﬃciency prodution and design･High energy eﬃciency equipment development

Middle･Considering alternative material, and appling to
products

Middle･Considering alternative material, and appling to
products･Reducing material purchase and emission by recyle

04･BCP improvement･Disaster prevention manual･Enhancing ﬂood resilience

Financial Statements

Physicaleﬀect in4℃ climatechangeOpportunity

ESG Initiatives

Transfereﬀect to1.5℃/2℃
society

Risk

High
and

ﬂexible・Flexible remote working

Goals and indicators
Nippon Seiki Group has set a 50% reduction target for CO₂ emissionsin Scope 1 and Scope 2 (based on 2019) in 2030 as a goal related to2050 Carbon Neutral Image

climate change in order to realize a sustainable society. . After that, we

Energy usage increases as the company grows
Renewable energy usage ratio: Expansion

set a goal of 100% reduction (carbon neutral) in 2050.

100,000

70,34779,352■D&D・Sales・Automotive Sales

77,234
4,387

60,0003.Purchase

79,95040,00072,84839,975

CO2 t/yr

CO2 t/yr

2019

2019

2020

2021

2022

※Consolidated manufacturing bases will be covered until 2021, and manufacturing, development design, sales, and vehicle
sales bases will be covered from 2022 onwards. *From 2022 onwards, the Emission Factor published by the International
Energy Agency will be used as the CO2 emissions coefficient for electricity.

（Benchmark year）

Energy2030（50％Less）

・Purchasing renewable energy

0

CO2 t/yr

20,0000・Electric energy saving
・Introducing energy-saving equipment when
updating equipment, etc.
・Reducing operating time by improving
productivity

2.Renewable
・Installing solar power generator
EnergyUsage

80,00079,9501.Energy
Saving■Manufacturing

Company data

CO2 emissions results（t-CO2）05

3 Measures for Carbon Neutral

2050（Carbon Neutral）

Improves
Corporate
Value

Renewable energy

Nippon Seiki Integrated Report36Social Initiatives ( S )Basic approach to society
Nippon Seiki group will not focus only on improving inorganic production
efficiency, but will strive to conduct business operations in accordance with ourgroup's management philosophy, based on compliance with laws andregulations and respect for the human rights of employees.
We will also contribute to the development of a sustainable society throughmanagement of human resources, safety, and quality, as well as activities that
contribute to local communities.

Safety management policy
Based on the "Respect for Human" philosophy of safety, we will realize our management philosophy through ourglobal and diverse business activities, including the development, design, procurement of materials, manufactur-

Learn
more

ing, sales, and quality assurance of products and parts, and through these activities, we will strive to improve andpromote continuous and aggressive initiatives for risks and opportunities related to occupational health and safety,
with the aim of eliminating occupational accidents.

Occupational Safety and Health Management System
In addition, as a company-wide organization, we hold regular

In August 2020, Nippon Seiki acquired the Occupational Safety and

Health Management System (ISO 45001) certification and compliedcompany-wide secretariat meetings in which safety and health

We have established the Environmental and Occupational Safety

information on the status of safety and health activities at eachcommittee members from each business site participate to sharewith the process.

business site, good practices, and improvement cases, thereby

and Health Manual, established the Occupational Safety and Healthraising the level of the company as a whole.

Policy and the Health and Safety Objectives, and created an environ-

We have also established a system for sharing information withment in which all employees can work safely and healthily. In eachdomestic and overseas Group companies, and will continue todivision, occupational health and safety-related items are included in

improve our occupational health and safety management.

the plan at the beginning of the fiscal year, and occupational healthand safety activities are promoted systematically.

Occupational Safety and Health Management Process
Occupational Safety and health policy and environmental and occupational safety and health manual

Planning and operation
Operational
control
Preparation
for incidents

Monitoringandmeasurement

To identify
the cause
Assessmentof compliance

Review

Targets andimplementation plans

・Needs and expectationsof stakeholders
・Roles of the Organization /Internal and External Issues
・Requests for occupationalsafety and health・Reflection in the previous
review[Structure and Role], [Training], [Communication], [Document and Record Management]

Based on management reviews and various requests, we formulate targets and implementation plans and implement them in a planned manner.
Events that occur in the planning and operation process are reflected in various policies, manuals, training, etc., as appropriate to promote
optimization, monitor and measure the results, and record the evaluation information that goes through each process as a management review.

日本精機株式会社 統合報告書

37

Nippon Seiki Integrated Report

01
Overview of Nippon Seiki Group

Quality management policy
Nippon Seiki group is committed to meeting customer
requirements and establishing the industry's highest
quality and technology based on the concept of "quality

For more
information
This way.

first" in all activities of planning, design, development,
manufacturing, and sales of electronic and mechatronics

02

products, including automobile, consumer and display

Nippon Seiki Group's Value Creation Process

products in accordance with the following items.

Quality Management System
Based on our Group Management Philosophy and Basic Quality

The processes that support the activities of the quality manage-

Policy, we are developing TQM activities from the customer's

ment system start with the management philosophy as shown below,

As for the quality management system, in fiscal 2017, the head

and its employees are aligned and operated in a planned manner. The

standpoint to provide safety and security to earn the trust of society.

office adopted the Automotive Industry Quality Management System
Standard, an international standard.

compliant with (IATF 16949) and integrated it with our businessresults of implementation are reviewed, fed back, and adapted tochange. Communication and education tools such as management
In the future, we will further adapt our businesses to the evolution

processes. Group companies completed the transition to IS O 900 1

of industry and automotive technology.

improve their products and services by deploying unified standards

will pursue quality that meets customer expectations while making(2015 version) and I ATF 169494 in fiscal 2020, and are working to
globally based on the concept of quality first.

03

documents, education, and training support these activities.

ESG Initiatives

We have completed the transition to a quality management systemand the various strategies are clarified, and the vectors of the group

Aiming to establish the world's highest quality and technology, we

continuous improvements.

Global Quality Manual + Management Document

04

Individual Company Quality Manual + Management Document

Mid-term plan(policies and targets)
Focused theme
Formulation of strategies
Plans of each divisionand each company

Departmental
action plansfor individualcompanies

Implementation

Financial Statements

Management Philosophy,
Corporate Culture
Management Vision,
Action Guidelines
Quality Policy andOther Policies Internaland external analysis

Various reviews

Systems and roles, training, communication, and documentation and records

05
Company data

Responsible Mineral Procurement
Conflict minerals (tin, ta, w, gold, etc.) originating from conflict zones and high-risk areas (CAHRAs) pose risks such as support for armed groups,

human rights violations such as child labour, bribery, money laundering, tax evasion, and environmental degradation (OECD Annex II risks). We

are conducting supply chain surveys using CMRT provided by RMI. We will work with our suppliers to make our supply chain more transparent
and reduce risks.

Nippon Seiki Integrated Report38Social Initiatives ( S )Social Contribution Activities
Participation and Sponsorshipof local festivals

Sports Promotion /Regional Revitalization

Community Collaboration
through Industry-Academia
Collaboration Classes

Nagaoka City, Niigata Prefecture, where
the headquarters of Nippon Seiki islocated, is an area where many people
were killed in air raids during World War II.
In Nagaoka City, the Nagaoka Festival isheld every August to pray for lasting peace,and our group participates in the danceand sponsors the Nagaoka Fireworks
Festival, one of the largest fireworks
festivals in Japan, to contribute to the local
community.

Together with Albirex Niigata Ladies, wevisit local elementary schools to holdsoccer hands-on sessions and career
education under the theme of "creating abright future together and developing
human resources who can contribute tosociety. Our employees also participate in
the planning and management of events
together, contributing to the local community and developing human resources.

We hold industry-academia collaboration
classes with the Nagaoka College ofEngineering, a local public university
corporation.
Under the title of "Visualization of Information in Daily Life: Regional Collaborative
Creation Exercise 2023," we will try to
propose everyday items (tools) for
students to use in their homes by utilizing
the sensing technology of Nippon Seiki (tomake the invisible visible). For students,
this is an opportunity/opportunity tocollaborate with local companies and share
their ideas with the world.

Responding to local issues

39

Operation of Programming Schools

Agreement on the Supply of Fuel inTimes of DisasterNS Computer Services Co., Ltd. is running programming school in
Nagaoka City. The school provide children with a place to learn IT
skills. As part of our activities, we also create opportunities forelementary school students to experience IT technologies, suchas drone operation. We plan and promote the development of local
human resources and the revitalization of IT industry by participating in and planning local events.

Nissei Service Co., Ltd., a group company that handles ourlogistics, has concluded an agreement with Nagaoka City tosecure fuel (diesel oil) for Nagaoka City's official vehicles in theevent of a disaster. This is the first initiative in Niigata Prefecture toestablish a system in which private service stations of logistics
companies and local governments work together. We will support
the disaster response of Nagaoka City, which has introduced
clean diesel vehicles, and contribute to the creation of adisaster-resistant community.

Nippon Seiki Integrated Report

01
Overview of Nippon Seiki Group

Community Contribution Activities
of International Subsidiaries[Wuhan Nissei Display System Co., Ltd.] (China)

Da Nang Nippon Seiki Co., Ltd., a software designer in Da Nang
City, Vietnam, donated used PCs to a local elementary school inMarch 2023 when updating (replacing) business PCs. The
school received a favorable reputation as a reusable item. With
the increasing importance of IT training, this program was a great
way to contribute to local training and human resource development.

Wuhan Nissei Display System Co., Ltd.. in Wuhan city, china,
promotes activities based on its annual social contribution
activity plan. In 2023, we called for active participation involunteer blood donation activities in July.
As a result, 27 employees volunteered to participate.
The blood donation volume exceeded 10,000ml. We received
words of gratitude from the Chinese Red Cross Society andpresented blood donation certificates to the participants.

02
Nippon Seiki Group's Value Creation Process[DaNang Nippon Seiki Co., Ltd.] (Vietnam)

03
ESG Initiatives[Thai Matto NS Co., Ltd.] (Thailand)

Thailand's Ministry of Education highly evaluated ourcontribution to social education, In April 2023, we received SEMA
Kunupakran(Thailand Ministry of Education Contribution Award
Prize for Contributions from the Thai Ministry of Education. In
connection with the government and the Ministry of Education'semphasis on "human resource development to support industry,"
Thai Nippon Seiki has been hiring a large number of interns
every year, which led to the award from the perspective ofcontribution to school education.

In recognition of our environmental improvement activities at the
Amata City Industrial Park in Thailand, we were awarded the''PLATINUM LEVEL'' at the 2022 awards ceremony.
This is the result of environmental (waste) improvement
activities at the industrial park that began in 2017. Activities that
initially started with garbage separation have continued to evolveand develop into initiatives such as the reduction of food waste(bio-based food waste processing).

04
Financial Statements[Thai Nippon Seiki Co., Ltd.](Thailand)

05
Company data

Nippon Seiki Integrated Report40Social Initiatives ( S )Improving Workplace Environment
Promoting Diversity
Nippon Seiki's growth is supported by the active
participation of diverse human resources. We believethat respecting and utilizing diverse values, ways ofthinking, and backgrounds will enhance organizational
creativity, secure excellent human resources, andimprove competitiveness. We are implementing
measures to promote diversity, such as in-house training
for executives.

In addition, as part of diversity, we conduct coaching
training and other programs for female employees whowish to advance their careers in order to develop female
managers. As a result of these efforts, we have received
the highest award of "3 stars" in the "Eruboshi"
certification, which is given to companies that excel inpromoting the advancement of women.

Supporting Employees in Juggling both Work and Family
We aim to be a company where all employees maintain abalance between work and family life, and continue to work withhigher motivation and higher performance.
We have set targets such as the rate of annual paid leave
taken, the percentage of women among hires and managers,
and the rate of men taking childcare leave and reduced working
hours for childcare. The results for FY2022 are shown in the tableon the right. These attitudes and achievements were highly
regarded by Niigata Prefecture as a "Happy Partner Company".

Indicators, targets and FY2022 results
Plan items

Goal

Results (FY2022)

Proportion of Annual Paid
Leave Taken

Maintain 70% or higher

70.2%

Overtime Working

Maintaining Monthly average
overtime work of all
employees within 18 hours

15 Hours

Female employee ratio in
new employment

Maintain 10% or higher

18.8%

Percentage of male workers
taking childcare leave

Maintain 30% or higher

61.3%

Percentage of female workers
in managerial positions

3% or more by April 2025

2.5%

Supporting Diverse Work Styles
We are working to deepen understanding of work-life balance throughout the workplace and to create a culture that accepts a variety of working
styles for each individual. We have established a variety of systems to create a comfortable working environment for employees at various life
stages, including pregnancy, childbirth, childcare, and nursing care. We also monitor the working engagement level of our employees once a year.

Flex-time system
Hourly annual paid leave system
We have established this system with theaim of promoting a way of working thatsuits the lifestyles of our employees and away of working that is autonomous, and weare expanding the freedom of work styles.

Voice
Voice of Employees
Taking Childcare Leave

For a long time
I can spend timewith my family.
It was a precious time.
Legal Affairs,
Corporate Planning
Department

Kengo Ikarashi

41

Nippon Seiki Integrated Report

Telework system

Shorter work hours

Teleworking is possible if the employee
wishes to obtain the approval of theworkplace. The goal is to reduce thephysical and mental burden and improve
work efficiency and productivity by
maintaining concentration.

We are working to create an environment
in which the child-rearing generation canbalance work and family life by waiving
overtime work until the child turns three
year's old and allowing them to choose towork shorter hours (6 hours) until the childturns 12 years old.

After giving birth to my first child, I tookchildcare leave when giving birth to mysecond child. The reason why I tookchildcare leave was because I heard
about a colleague who was actually aman who took childcare leave, and I
wanted to support my wife afterchildbirth by taking on housework andchildcare, and to be involved with thechildren.
My superiors and colleagues haveshown their understanding of taking

childcare leave, and I have received avariety of support. I was also very
grateful for the support I received fromeveryone, including answers from the
Human Resources Department to myquestions about the childcare leavesystem and benefits.
Housework and childcare during
my childcare leave was more difficult
than I had originally thought, but it wasa valuable time for me to spend a lot oftime with my family.

01
Overview of Nippon Seiki Group

Human Resource Development
Basic Policy
We believe that human resources are our most important management resource, and we conduct human resource development based on thisbelief. We support the development and growth of individual abilities by providing human resource development programs that enable employees
to be proactively aware of the skills they need and their own careers, and to take action to realize them.

02
Nippon Seiki Group's Value Creation Process

Development of Autonomous Dynamic
Human Resources

Career Design Support

In order to survive in global competition, we aim to develop
global human resources who are "autonomous, think-and-act" andcan think and act on their own to solve problems and respondquickly to changes. We provide more than 20 education andtraining programs per year, tailored to themes and levels.
In addition, we conduct regular career interviews, intensive
education and early selection for candidates for global
management, and job rotation to foster a multifaceted perspective.

By holding interviews with career counselors at milestone ages andsupporting career and skill development, we aim to create strong
human resources who can help each employee realize his or her
career positively and at the same time realize business strategies.
In addition, as a career support system that allows employees totake on new challenges on their own, we conduct internal job
openings.

03

and training

Management training

Communication・Mental health

LanguageCompliance

Health and safety

Other

Management skill

Career design

Business skill

New employee training

ESG Initiatives

Themes of education(Life plan・health management)

Idea contest

To be a place
where imaginative ideas
to be generated
Sensor solutions
Development Department

Mizuki Otuka

In order to make it easier to come up
with ideas for this contest, we narrowed
down the themes of the contest to thosearound our business areas. In addition,
we disclosed the screening weight
allocation at the time of the offering andclarified the points of focus in order topropose high-quality ideas. As a result,
we were able to gather many ideas thatwere familiar to us but had a wide
variety.

2023 Idea Contest Awarding Ceremony

At the final idea debriefing session,some of the participants commented
that the idea was interesting and thatthey had not come up with any ideas,
indicating
theimportanceofopportunities to gather ideas from awide range of employees with diverse
ideas. We will continue to run thecontest so that it will be a place whereideas that are not bound by existingideas can be generated.

Nippon Seiki Integrated Report05
Company data

Voice
Voice of the idea contest
secretariat

04
Financial Statements

We encourage our employees to create new business ideas on their own initiative, andencourage them to work in the workplace. We regularly hold business idea contests with theaim of stimulating participation in management and leading to sustainable development of theGroup.
To date, seven meetings have been held (four at the head office and three at nissei serviceco., ltd. and NS computer service co., ltd.). in fiscal 2023, these meetings were held on the
topics of "zero pedestrian accidents" and "ensuring pedestrian safety" using optical or
sensor-based technologies, and many ideas were proposed that could lead to a "future full ofsafety and security.

42

Social Initiatives ( S )Respect for Human Rights
Establishment of Human Rights Policy
On February 28, 2023, we established the Nippon Seiki Group Human Rights Policy after approval by us and the Management Committee.

Human rights policy
We, the Nippon Seiki Group ("we" or "us" hereinafter), will continue to respond to social demands to fulfill our responsibility to respect humanrights in order to achieve sustainable development with the global society in all our business activities. Here, we present our stance and thoughts
on human rights and promote our human rights initiatives
1.Commitment to respect for human rights
We recognize that our business activities can have an impact on the human rights of all stakeholders. We understand and support the “International Billof Human Rights” and the “ILO Declaration on Fundamental Principles and Rights at Work” as the minimum human rights principles and standards withwhich companies must comply. We will put them into practice in our business activities.
We will comply with the laws and regulations of the countries and regions in which we operate. If the laws and regulations of the country conflict withinternational human rights, we will pursue ways to respect internationally recognized human rights to the greatest extent possible.
2.Scope of application
This policy applies to all officers and employees of the NS Group (Nippon Seiki and its consolidated subsidiaries). We also expect all of our stakeholders
to understand this policy.
3.Human rights due diligence
We will establish and continuously implement processes to identify, prevent, and mitigate negative human rights impacts in order to fulfill our responsibility
to respect human rights with the aim of achieving a sustainable society.
4.Correction and remedy
When it becomes clear that we have caused or contributed to negative impacts on human rights, we will work to correct and remedy such impacts andprevent future activities that may cause or contribute to similar negative impacts. We will also promote the establishment of appropriate and effective
remedy mechanisms for human rights.
5.Education
We will continuously provide the necessary education and training to ensure that all officers and employees understand the importance of our humanrights policy and act accordingly.
6.Information disclosure
We will regularly disclose information on our efforts to respect human rights through our website and other means.
7.Dialogue and discussion with stakeholders
We will utilize outside expertise in implementing our respect for human rights initiatives, and will engage in ongoing dialogue and consultation with relevant
stakeholders.

Initiatives for Human Rights

Promotion of Human Rights Due Diligence

We will focus on the following human rights issues that may
arise in our business activities.

We will promote human rights due
diligence to respect human rights
through the Nippon Seiki Group's
value chain.

Priority themes[1] Prohibition of forced labor and child labor[2] Prohibition of discrimination and harassment

Photo: Human resource department of
Nippon Seiki
Mr. Sekiya, Mr. Jimbo, and Mr. Iida

[3] Respect and acceptance of diversity[4] Prohibition of shortages and unpaid wages

PDCA of Human Rights Due Diligence[5] Prohibition of excessive labor[6] Observance of occupational health and safety[7] Rights of migrant workers and foreign workers[8] Rights of indigenous and local people[9] Freedom of association[10] Right of privacy[11] Freedom of expression[12] Prohibition of Bribery and Illegal Benefits

43

Nippon Seiki Integrated Report

04.Action

Disclose to thestakeholders

01.Plan

04

Human
01
Rights Policy
03 Establishment

02.Do

03.Check

Monitoring efforts

Identification andevaluation ofnegative effect02

Prevention ofnegative effect01
Overview of Nippon Seiki Group

Health Management
Health Management Vision
In our group, it is essential that employees can take onchallenges with enthusiasm and satisfaction in order toachieve our management targets and Group Vision.
In the 2021-2023 Medium-Term Management Plan, We
are promoting Health management and work stylereforms.

Strategy Map for Health Management

Final healthrelated target
indicators

Nippon Seiki Group Health Declaration

・Improving work engagement
・Improving presenteeism
・Decreasing the number of employee with health problem
・Improvement of absenteeism

Indicators related
to changes in
employee awarenessand behavior

・Increase in internal applications
・Reduction in overall health risk
・Secondary screening rate:100%
・Improving health literacy

Indicators related tothe status of healthinvestment measures

・Increase in the number of trainees
・To reduce the amount of overtime work
・Promotion of proper eating

Health investment

・Healthcare training
・Introducing hourly paid leave・Cafeteria menu improvemen

03
ESG Initiatives

In order to realize our management philosophy,
it is essential that our employees and theirfamilies are healthy and happy both physicallyand mentally. We, the Nippon Seiki Group, willcontribute to the realization of a safe, secure,and sustainable society by actively supporting
our employees so that they can be healthy,
energetic, feel fulfilled in their work, and take onchallenges.

02

Employees are encouraged to take on new challenges
Continue to grow as a company with enthusiasm

Nippon Seiki Group's Value Creation Process

In health management
Health issues to be solved

Health Management Initiatives
Health Promotion Through Fun Events

We thoroughly manage those who have not yet undergone regular
medical checkups, and maintain a 100% medical checkup rate. Since
2022, we have been making efforts to create an environment where itis easy for women to receive cancer checkups and create
opportunities to receive them.

We plan a variety of events so that our employees can work on healthin a natural and enjoyable way. The company cafeteria provides foodeducation activities by providing menus in collaboration with local
high schools and food manufacturers. In addition, increasing physicalactivity and determining exercise habits.
We have walking events using smartphone apps to prepare for thearrival of new clothes, local communities Sports bicycle test rides andonline self-bodywork seminars are held during breaks.

2015

2022

Rate requiring detail examination

21.2 %

10.2 %

Rate of Secondary checkup

62.9 %

81.4 %

04
Financial Statements

Thorough Implementation of Health Checkups

Mental Health Initiatives
In addition to a monthly mental health consultation day by apsychiatrist, we have a full-time counselor who can feel free toconsult with us during working hours. In order to provide a wide rangeof primary physical and mental prevention, we are actively promotinginterviews that combine health guidance by public health nurses andmental health and career counseling by counselors.

Healthycollaboration menu

Health promotion event by bicycle

05
Company data

TOPIC
Health Management Awards
In recognition of our efforts and attitude toward health management, we were certified by the
Ministry of Economy, Trade and Industry as a "2023 Certified Health and Productivity
Management Organization (Large-Scale Corporate Division)." We applied for certification for
the first time in 2022, and will be certified for the second year in a row in 2023. In addition,
seven consolidated subsidiaries have been certified under the "Niigata Prefecture Healthand Productivity Management Promotion Company Master 2023" as well as the "2023
Certified Health and Productivity Management Organization Recognition Program."

Nippon Seiki Integrated Report

44Corporate Governance ( G)

Basic Corporate Governance Concept
We place importance on relationships of trust with our shareholders,
employees, customers, business partners, creditors, local
communities, and other stakeholders. In addition, in order to achievesustained growth and increase corporate value over the medium tolong term, we will provide appropriate information disclosure,including non-financial information, and support transparent, fair, andprompt decision-making by directors and others.
We recognize that realization of a corporate governance systemand constructive dialogue with shareholders are the most important
issues. We will continue to strive to achieve sustained growth andincrease corporate value over the medium to long term.

< Diagram of Corporate Governance and Internal Control System >General Meeting of Shareholders
Appointment / dismissal

Appointment / dismissal

Supervision / Audit
Six Directors"(Excluding Directors who are Audit Committee Members)"
Consultation

Audit Committee
5 directors who are members of the audit
committee (Of which, 4 outside directors)

Supervision
Reporting

ReportingInstruction

Compensation Committee

Selection/Removal
Delegation of authority to makebusiness execution decisions

Instruction

Audit Office"(concurrently serving as thesecretariat of the Audit, etc. Committee)"

ReportingInstruction

Instruction

Internal control
promotioncommittee

Instruction

Management
Committee

Reporting

ReportingInstruction

ReportingCompliance
Committee

Traffic Safety
Committee

Risk Management

Committee of Security
Trade Control

Safety and HealthCommittee

Importing & exporting
management committee

ReportingInstruction

Accounting
Audit

Reporting

Supervision / Audit

President andRepresentative Director

ReportingAccounting Auditor(EY Shin-Nippon Limited
Accounting Corporation)

ReportNominating Committee

ReportingAppointment / dismissal

Audit(Judgment on reasonableness)

Board of Directors

ReportingInstruction

Instruction

Quality Meeting
Cost MeetingTechnology Meeting
Productivity Meeting

General Managers
Meeting

ReportingOrdering Strategy
Meeting

ReportingInternal Audit

Instruction

Each division, department, and group company< Composition and main roles of each organization >Internal

Organization

Members

Main role45

Nippon Seiki Integrated Report

Board of Directors
ChairpersonAudit Committee
ChairpersonOutside Director (male)

Nomination Committee
ChairpersonOutside Directors (Female)Compensation Committee
Chairperson11 (7 internal, 4 external)

5 (1 internal, 4 external)

5 (2 internal, 3 external)

5 (2 internal, 3 external)■Basic management decision-making and oversight of businessexecution■Appointment of the representative
director■Decisions on important business
operations (including decisions on
matters entrusted to the president
and director)■Audit of directors’ duties /Supervision■Statement of Opinions on
Designation and Remuneration,etc. of Directors Who Are Not
Audit Committee Members■Deliberate on matters related tothe appointment and dismissal of
directors, and report to the Boardof Directors■Discussion of policy regarding
remuneration of directors andindividual remuneration amount
Report to the Board of Directors

01
Overview of Nippon Seiki Group

The Board of Directors EffectivenessEvaluation of the Board of Directors effectiveness≪Summary of evaluation results≫

Every year, we analyze and evaluate the effectiveness of the Board of
Directors as a whole by conducting a questionnaire survey todirectors who comprise the Board of Directors, reviewing the results
by independent outside directors, and reporting the results to theBoard of Directors.

As a result, the effectiveness of the entire Board of Directors in theprevious fiscal year.
Directors was confirmed that they have secured the effectivenessof the management of the Board of Directors, the monitoring functionof the Board of Directors, and the method of reporting to the Board of
Directors was also evaluated that improvements are made. On theother hand, they shared the need for more opportunities to discuss
medium-term issues. Based on these opinions, we will work to make
improvements to further improve the effectiveness of the Board of
Directors.

02
Nippon Seiki Group's Value Creation Process≪Evaluation process≫Election of Directors
Nomination policy for director candidates

03
ESG Initiatives

When nominating candidates for the Board of Directors, theNominations Committee, which is chaired by an independent outside
director and constituted by a majority of independent outside
directors, shall consider the experience, abilities, and achievementsof the Executive Officer in a comprehensive manner, and in the caseof re-appointed directors, the nomination shall be made after
considering the contribution of the re-appointed directors to theperformance during their term of office.
For nominating BOD candidates who are the audit committee, we
comprehensively consider knowledge, experience, abilities andpersonal achievements that enables to appropriately satisfy the rolerequired as an audit committee.

(1)Knowledge and experience as an expert to the formulation ofmanagement strategies and plans and the execution of important
operations reflecting in the decision-making process.
(2)Ensuring that conflicts of interest do not arise between the
Company and the Board of Directors.
(3)Reflecting the opinions of shareholders and other stakeholders.

04
Financial Statements

Nomination of candidates for director as audit committee members
Knowledge that enables us to appropriately fulfill the roles required of the Audit Committee when nominating candidates for the Board of Directors
who are members of our Audit, etc. Nominations are made after comprehensively considering knowledge, experience, abilities, and personal
achievements.

< Board Composition and Skill Matrix >Manufacturing
Research,
Corporate
and production development
management
technologies
and design
Internal◎◎

Keiichi Nagano

Internal○◎

Masatoshi Azuma

Internal○◎

Yuji Osaki

Internal○◎

Masahiro YoshiharaInternal◎◎

Kazuhiko Murayama

Internal◎

Tatsuya Nagai

Internal

Etsuo Saiki

External

Eiko Tomiyama

External

Kiyoshi Suzuki

External

Toshihiko Enomoto

External

Audit andSupervisory
Committee
Audit andSupervisory
Committee
Audit andSupervisory
Committee
Audit andSupervisory
Committee
Audit andSupervisory
Committee

Accounting
and financial
taxation

Corporate
Governance

○

○

◎

ESG
Sustainability

◯
◎

○

Human
Resources
Development

◎

○

◎

○

○

◎

○

◯

○

◎

○

Globalexperience

○

○

◎

○

◎

○

IT DX

05
Company data

Koichi Sato

Marketing
sales

○

◯

◎
◎
◎

◎
◎

◯

◎

○

◎

○
◎

◎

◎

※Items of skill recognized as having abundant knowledge and expertise are marked with ◎.
※Based on work experience and current specialized knowledge, Items of skill recognized as to have knowledge and expertise are marked with 〇.

Nippon Seiki Integrated Report

46Corporate Governance ( G)

Directors' Remuneration
Total amount by type of remuneration, etc. (million yen)

Officer classification

Total remuneration,etc.
(million yen)Fixed remuneration

Variable remuneration
Incentive fee

Stock-based
compensation

Basic fee

Performancelinked bonus

Stock compensationtype stock options

Number of officers
targeted

Director(Excluding Audit Committee Members
and Outside Directors)

197

115

71

9

8

Audit committee members(excluding outside directors)

40

40

-

-

2

External Director

32

32

-

-

4

Risk Management
Risk Management System
We have established a Risk Management Committee to reduceand respond to various risks in our business operations. The Risk
Management Committee consists of the BCP Subcommittee, theRisk Management
Committee

BCP subcommittee
Disaster Prevention
Subcommittee

Disaster Prevention Subcommittee, and the Confidential Information Management Subcommittee. The BCP Subcommittee and theDisaster Prevention Subcommittee formulate business continuity

Confidentiality Control
Subcommittee

plans and reduce disaster risks, and the Confidentiality Management Subcommittee implements information security measures.

Basic Concept of BCP

Information security management

In recent years, earthquakes, fires, explosions, wind, snow, and flood

Our group is working on safe information management globally by

world, and pandemic (a new type of coronavirus) has spread through-and continuously maintaining and improving information security,

damage have occurred one after another in countries around theout the world. Since it is expected to have a significant impact on themaintenance of the supply chain, it is necessary to determine what

measures are being taken to deal with the risks and bottlenecks ofstopping business activities. It is also necessary to formulate andimplement a business continuity strategy that can be implemented inorder to avoid a "loss of management" in the event of an accident.

In order to prevent the suspension of business operations due todisasters such as fires, earthquakes, wind, snow, and floods, andinfectious diseases, the Group is narrowing down importantbuilding an ISMS (Information Security Management System) system
including employee education. In particular, we consider customer
information, sales information, technical information, personal

information, etc. to be important information, and take appropriate

security measures to protect this information from risks such asleakage, loss, destruction, and falsification.

In terms of IT security, in response to the recent increase in the riskof cyber attacks, we have introduced stronger defense mechanisms
such as EDR across the group.

In addition to internal systems, we maintain and improve security

operations and promoting the formulation of business continuity plans.

standards by obtaining information security certification in Japan and

Director takes the lead of operation meetings in deliberating measurescalled TISAX, and complying with Japan's automobile industry

In the event of a disaster, accident, or incident, Representative

to minimize losses, the possibility of business continuity, and the riskof delivery to customers.

Europe established by the German Automobile Industry Association
cybersecurity guidelines.

In addition, we are building and operating a system globally thatcomplies with the standardization of measures (ISO/SAE 21434) in

response to the growing awareness of product safety in the automobile industry, and are ensuring that our products have cybersecurity
measures in place.

47

Nippon Seiki Integrated Report

01
Overview of Nippon Seiki GroupIntellectual Property
Basic Concept on Intellectual Property
We promote intellectual property activities based on our basic policies

distribute our products and to our competitors.

strengthening the utilization of rights.

property risks by conducting patent research in accordance with theof securing beneficial rights, ensuring intellectual property safety, andTo secure beneficial rights, we seek and evaluate patentabledevelopment and design phases.

the creation of a foundation to advance business superiority. In

promoting verification of other companies' products. When the use of

acquisition of rights corresponding to the countries in which we

made.

addition, to support the acquisition of orders, we will promote the02

As part of our efforts to strengthen the use of rights, we are

Nippon Seiki Group's Value Creation Process

inventions, acquire rights from highly valued inventions, and promote"Ensuring Intellectual Property Safety" manages intellectual

our rights is confirmed, appropriate use of rights such as licenses isCompliance
Basic stance on compliance (compliance declaration)
The Nippon Seiki Group strives to be a corporate group that is evenestablishing a compliance code of conduct and having each director

management, complying with laws and ethics as a responsible

We will also contribute to the prosperity of society by providing

more trusted by society by placing importance on compliance in its

We aim to become a corporate group trusted by society by

03
ESG Initiatives

member of society, and practicing sound corporate activities.

and each employee act in accordance with the code of conduct.
high-value products and services that satisfy customers.

Compliance Promotion System
We

have

establishedaCompliance

Committee

under

the

The committee deliberates on important issues related to violations

Representative Director to promote compliance, and appoint aof the law and promotes continuous improvement.

Officer. The Compliance Committee is responsible for establishing a

Officers analyze compliance risks specific to each business divisionand conducting awareness-raising activities.

these risks.

Director or an executive officer with an official title as the Compliancecompany-wide compliance system, identifying problems and issues,

In addition, the Directors in charge of operations and Executive

and take countermeasures to continuously improve the quality of04
Financial Statements

Compliance Training and Education
We have included the Compliance Declaration, the Internal Reporting

addition, we are working to prevent recurrence of compliancecarried by all employees, and are working to educate employees

the Compliance Committee and the General Affairs Manager of each

System, and the Compliance Code of Conduct in the TQM notebook
about the meaning of compliance and to publicize it.

Based on the annual activity plan of the Compliance Committee,

incidents occurring at Group companies by sharing information withcompany.

In addition, we are working to raise awareness of legal compliancecompliance training for new employees, compliance training forby holding antitrust law training for sales departments and employeesmaterials (quarterly).

employees to prevent insider trading.

managers by corporate lawyers, and distribution of educational

These measures are implemented by all group companies. In

on overseas assignments, and holding annual training for all

05
Company data

Whistleblowing System
In accordance with the Whistleblower Protection Act, we haveobligations on those in charge.

employees, including affiliated companies, who are aware ofinternal whistleblower hotline. The Compliance Committee mandates

protects whistleblowers, and implements appropriate investigations,and prohibits the involvement of interested parties in cases. In thisestablished an internal reporting system that accepts reports from
improprieties, at internal and external contact points (attorneys),corrections, and preventive measures.

We ensure that whistleblowers are fully protected by allowing

whistleblowers to report anonymously and by imposing confidentiality

In addition, the Compliance Committee is responsible for thethe submission of reports on certain serious cases to outside directors,
way, the fairness and independence of the whistleblower hotline isensured.

Nippon Seiki Integrated Report48

Interviewing outside directors

TALK SESSION
About the increase of thecorporate value of Nippon Seiki

Outside director

Etsuo Saiki

Outside director

Eiko Tomiyama

A talk session was held between Mr. Saiki and Ms. Tomiyama, both of whom are our outside directors,
and the session was from a higher viewpoint of their professional specialties.

Q1

Based upon your own professional
specialties, what are the roles andexpectations as our outside directors?

Saiki: I recognize that the expected role from my
specialty as being a lawyer is to give opinions on therationality of the business judgements by directors,
namely, whether the business judgements in its
contents and procedures have been conducted appropriately, or if there are any breaches of the duty ofcare. Also, whether corporate governance has been
conducted appropriately from the viewpoints of the
stakeholders such as shareholders, customers,
employees, and local societies.
Specifically, whether the business judgements
have been violated by the laws associated with the
Law of Corporation or antitrust law, or contravened
against the interpretation of the supreme court's
judgements etc. Among them, issues such as
overtime work, harassment, and mental health seemto be getting more important in respect to compliance.
As for me personally, I persuade myself to makestatements without reading between the lines andsurmising others, and to swallow my pride at beingtrue to myself.
Tomiyama: Since my specialty is global marketing, I
see things from a marketing viewpoint and think how
to create valuable things and make them realize(deliver, exchange) by transferring the values. I think it
is important to contribute to the formulation of medium
to long term management strategies. I recognize thatmy supervision and making opinions are expected forall stakeholders if such strategies are for raising the49

Nippon Seiki Integrated Report

corporate values in the medium and long term.
The importance of corporate management having
sustainability for future generations has risen thesedays. Therefore I, who stands independently from thebusiness executor, am expected to give mystatements to the managers without hesitation bytaking society, economy, and risk management into
consideration from such a new vision.

Q2

Over five years have passed since bothof you were appointed as outside
directors. What do you think are thechanges since the appointment?

Saiki: I think that discussions at the board of directors’
meetings have become more vitalized. One reason isthat the board of directors' meeting has decided to
discuss issues that need to be resolved as deliberations. Besides the agendas for decisions and reports,
in order to dig deeper into issues that need to be

01
Overview of Nippon Seiki Group

report them to the board of directors. The majority ofthe members of both committees shall be outside
directors, and the committee chairpersons shall beoutside directors. By these rules, the system has been
set up to effectively fulfill their functions. We recognize
this as one of the important roles of outside directors.

Q3
Q3

What is needed to connect sustainable
initiatives to long-term development?

02
Nippon Seiki Group's Value Creation Process

Tomiyama: A trend is emerging to incorporate knowledge from outside the company for encouraging
employees' awareness reform and utilize the knowledge in formulating management strategies. For
example, I was asked and had the opportunity to givea lecture to employees about the SDGs and a lecture
to executives about purpose management. In particular, the SDGs lecture was attended by more employees than I expected (450 people, including online
attendees). I was surprised by the level of interest.
I also think women are now playing an active role invarious situations. The number of women in management positions has increased over the past few years.
Women are also leading initiatives such as developing
healthy menus for lunch as part of our health management measures, collaborative projects utilized withfood products from local companies such as Kameda
Seika and Ichimasa Kamaboko (plant-based
food/alternative meat, Next Seafood), and initiatives toincrease the number of steps taken each day to lead ahealthy life. I think that among the initiatives thechildcare support company “Kurumin” is a very goodmeasure that is designed to create a comfortableworkplace for employees.
Saiki: It is important to prepare an environment where
diverse human resources, including women, can play
an active role as we live in an era of diversity. In orderto prepare the environment for the active participationof diverse human resources, we need to disclose
information such as the proportion of female workers,
the rate of men taking childcare leave, and the numberof people who are eligible for and those who tookchildcare leave by gender. In addition to disclosing
information, we will further enhance this environment
and ensure that our company is a place where womencan play an active role. It is also important to strongly
emphasize that our workplace is one that allows
employees to balance childcare and nursing care. In
addition, with the LGBT Understanding Promotion Act
which was effected in June 2023, we are required toprepare a workplace environment where LGBTQ
people feel easy to work in. It is said that the proportion of LGBTQ people is around 8.9%, or one in 11
people, so I think we need to consider various systems
from a diversity perspective.

03
ESG Initiatives

04
Financial Statements

05
Company data

resolved over the medium and long term, it has been
decided that these issues will be raised and discussed
at the board of directors’ meeting as “matters fordeliberation''.
Now, the explanations at the board of directors’
meetings are easier to understand. In the current
economic environment, where events are occurring
one after another, such as the coronavirus pandemic,
semiconductor shortages, and Russia's invasion of
Ukraine, management is becoming more difficult thanever before. From the beginning of his appointment,
President Sato has consistently given his messages
with simple words “become more muscular” and“produce more output with less cost, expense, andtime” for the transformation of management structure.
One of the concrete measures is that the explanationsof resolutions at the meetings have become “simple
and to the point” more than ever. Also, various
management indicators have become more comprehensive and easier to understand.
Tomiyama: It's definitely becoming vitalized. The
evaluation of the effectiveness of the directors provided opinions concerning the selection and narrowing ofagendas to be discussed by the board of directors’
meeting, were discussed by the executive side andthe outside directors, and a new direction was derived.
Outside directors discuss what agendas should be
brought up, and exchange opinions regarding
requests with the president and others. They also
work together with executive officers to create theagendas for the board of directors' meeting. I believethat such an initiative has never been done before hebecame president.
And the functions related to the board of directors’
meeting have evolved, and a nominating committee
and remuneration committee have been established,and proposals have been put forward by thesecommittees.
Saiki: A voluntary remuneration committee was established the year before last. This is to ensure transparency and fairness in the company’s decision-making,and to create objective and transparent procedures sothat remuneration functions as a healthy incentive forsustainable growth. The committee will examine thepolicy for determining remuneration of directors(excluding directors who are audit and supervisorycommittee members) and the appropriateness of
individual remuneration amounts and will report themto the board of directors. A voluntary nominationcommittee was also established at the same time. This
is to ensure transparency, fairness, and objectivity inthe selection and dismissal of directors (excluding
directors who are audit and supervisory committee
members). The committee will create a policy fornominating directors, achieve an appropriate composition of the board of directors’ meeting, and generatea skills matrix for the board of directors’ meeting, andNext Page

Nippon Seiki Integrated Report50Interviewing outside directors

Q4

How about the communication ability
as a company?

Tomiyama: Since our company is basically a B-to-B
company, we had not given much thought to public
relations in the past. To spread awareness of ourvarious initiatives, I gave advice that “It’s better tofocus on public relations.” As a result, the organizationof public relations was created. Regarding the news,
exposure to media such as newspapers and television
has increased significantly. I think it's great that thecompany immediately put my advice into action.
One of the goals of promoting sustainability is tobecome a company chosen by stakeholders. We cancontinue our business medium to long term thanks tothe stakeholders such as investors, employees,
customers, business partners, and the local community. In order to be chosen, we must obtain empathy andtrust from them by disseminating information. To doso, I think it is better to disclose and publicize theactivities and the achievements of the company
together with the background. I believe that stakeholders choose us because they understand that weare a company that contributes to society through ourbusiness, and by being so, we will become a company
that is needed by society.
Saiki: Starting in 2021, we have published an"Integrated Report" which has become the standard
for global companies. The report not only contains
financial information but includes non-financial
information such as ESG initiatives and actions aimed
at promoting and resolving social issues. We provide
explanations to stakeholders about future corporate
value creation, and simultaneously, we try to meettheir expectations.

Q5

On the other hand, please let me hear
any arising issues.

Saiki: I think that the future perspective of the Head
Up Display business should be more materialized. In
the Head Up Display business, which is positioned asa core business, the company should strive to further
improve its profitability, as well as consider and implement specific medium to long term measures.
Tomiyama: I also look forward to the further growth of
the Head Up Display business. I think the enhancement of tackling marketing is important for it. I don't
think the supply values of Head Up Display have been
fully transmitted to automakers and users yet. Price isalso a means of value transformation. I don't think car
manufacturers or general users around the world
recognize the fact that “Drivers don't have to movetheir eyes by utilizing this system while driving, whichleads to safer driving.” I think we need to do more to51

Nippon Seiki Integrated Reportraise awareness of how our Head Up Display cancontribute to solving the social issue of the highnumber of traffic accidents caused by distracted
driving.
In order to realize sustainability management, it isimportant to realize and promote Sustainability Transformation (SX). In short, the goal of SX is “the more wesell and expand our products and services, the moresociety will improve.” I think we need to make more
people aware that the more Head Up Display are sold,the more traffic accidents will decrease, and society
will improve. The value of our company's existence is“providing peace of mind, safety, and excitement to all
people.'' Society's need to reduce traffic accidents(problem solving) and the value of a company's
existence in pursuit of it are synchronized. Therefore, I
think we need to be more aware that our company
develops products and services that reduce traffic
accidents and improve society.
Saiki: Always with a long-term perspective, sustainable growth requires the development and cultivationof new businesses for the next generation. In particular, I think it would be a good idea to swiftly formulate
and implement concrete measures, such as launchinga new business project team which respects the
freedom, flexibility, and fresh ideas of younger generation employees. It may be possible to reflect changes
in the values, consciousness, and consumer behaviorof Millennials and Generation Z at the basis of theideas of the younger generation. I do think this point isquite important for the development of new businesses.
Tomiyama: If that happens, it will be an exciting
project.
Saiki: Responding to climate change is also a major
issue. From an era when "maximizing shareholder
returns" was the top priority, we have now entered an
era where social issues are such as increasing
concerns about climate change and sustainability, andthe SDGs led by the United Nations. We urgently need01

achieve long-term growth. I believe that we will enteran era in which stakeholder capitalism will be emphasized even more. A company must consider the profits
of their stakeholders (i.e., shareholders, employees,
clients, customers, and local society), and consider
the stakeholders to be entities that create value
together with the company. Among them, one of themost important things for a corporation to consider is“human capital”. Investing in human resources, which
are the source of value creation, is for increasing final
results. I think it would be a good idea that the plan
includes the following: the optimization of the humanresources portfolio in response to changes in theenvironment, management strategy, diversity ofknowledge and experience, reskilling, employee
engagement, and so forth.
Saiki: It is indeed persuasive when you, Professor
Tomiyama, who teaches at a university, say so. I also
believe that investing in human resources is important.
As they say, “What one likes, one will do well.” I
believe that the employees joined the company byhaving interest in manufacturing (or Monozukuri) andhaving a “will” that is “for society, for people”. To
support the “will” and make it realized, I think we haveto fundamentally reconsider the personnel system. We
need to review how to foster job satisfaction andmaximize the performance of current employees,
including new graduates, mid-career hires, rehires
after retirement, and fixed-short-term employees. It isalso necessary to take measures to address social
trends such as the improvement of the retention rate ofyoung employees and labor shortage issues due toretirement of elderly employees.
Tomiyama: We, the members of the outside directors,
will deepen our understanding of the Nippon Seiki
Group, including its corporate culture, and be
conscious of our role in providing fresh awareness tothe management team at the same time. We willcontinue to do our best to fulfill our duties in accordance with the mandate from stakeholders in order toformulate the next medium-term management plan
2024-2026, and further realize our vision for 2030.

02
Nippon Seiki Group's Value Creation Process

03
ESG Initiatives

04
Financial Statements

Q6

Overview of Nippon Seiki Groupto resolve these issues. Particularly, as a company inthe automobile industry, responding to carbon neutrality is important. It is important to connect the current
various measures which have already been formulated
into a more effective action plan, expand and develop
them by adding new measures. We have started
disclosing information based on Recommendations of
the Task Force on Climate-related Financial Disclosures (TCFD) as part of our efforts to achieve ourcarbon neutrality goal, but we need to have further
detailed discussions on this.
Tomiyama: This is related to the request made by the
Tokyo Stock Exchange, Inc., but discussions regarding
our capital policy are also increasing. From now on, it
is necessary to make plans for capital policy andmanagement strategy to be an attractive company forinvestors and shareholders.
Saiki: I agree with you. Up until now, we have been
actively working on business and capital alliances,including an alliance with Alps Alpine and making
Kyoei Engineering a subsidiary, as a strategic use of
cash. The board of directors’ meeting also discusses
matters including capital policy. I believe that moredetailed explanations are required in order to gain theunderstanding of shareholders.
Tomiyama: In future discussions, I also believe it will
be necessary to allocate more time to management
strategy, develop and utilize human resources, andpresent a purpose to stakeholders including employees as to where the company is headed.
Saiki: Concerns about climate change and sustainability are increasing, and we have entered an era
where solving social issues such as the SDGs areurgent matters. Along with these consciousness
changes in society as a whole, companies can nolonger rely solely on economic rationality, but are now
required to create balanced value with ESG (Environment, Society, Governance) in mind. Economic
rationality has become a means rather than a purpose,and it is necessary to have a higher-order way of
thinking or a concept setting to integrate them. This is,
I think, the reason why the purpose management has
been paid attention to recently, so we will deepen our
discussion on it at the board of directors’ meeting.

Toward formulating a new medium-term
management plan05
Company data

Tomiyama: I think we should think of the coming three
years with back-casting thought by foreseeing thefuture of the next five and ten years. As an outside
director, I want to review the business to focus on withthe long-term viewpoint that clarifies what we should
aim for in ten years. I believe that improving employee
engagement and HR strategies are also necessary to

Nippon Seiki Integrated Report52Consolidated Financial Statements
Consolidated Statement of Financial Position(Unit: Millions of yen)March 31,2021

March 31,2022

Cash and cash equivalents

24,79630,043

Other current financial assets

78,001

AssetsCurrent assets

Trade and other current receivables
Inventories

Other current assets
Total current assets
Non-current assets

Property, plant and equipment

Goodwill and intangible assets

Trade and other non-current receivables
Other non-current financial assets
Deferred tax assets

Other non-current assets
Total non-current assets

40,50254,553

55,11469,57792,475

221,870

244,999

67,12568,829

8,991

8,097

455

27,931
3,193

879

107,683

12,8118,667

430

28,4084,371

248

110,955

329,553355,954

Trade and other current payables

40,43242,850

Other current financial liabilities

1,897

1,923

Total assets

Liabilities and equity
Liabilities

Current liabilities

Short-term loans

Income tax payables

Short-term employee benefits
Provisions

Other current liabilities

1,315
4,817

778

1,329

64,668
1,808
5,142

686

1,411

106,618

118,491

Long-term loans

13,084

14,468Long-term employee benefits

4,091

3,875

Total current liabilities
Non-current liabilities

Other non-current financial liabilities
Provisions

3,064
184

3,223
285

Deferred tax liabilities

7,331

8,385

Total non-current liabilities

28,06131,014

Other non-current liabilities

304

775

134,679

149,505

Common stock

14,494

14,494Retained earnings

149,946

149,307

Total liabilities
EquityCapital surplus
Treasury stock

Other components of equity

4,438(1,014)
18,392

4,435
(972)

32,351Equity attributable to owners of the parent

186,257

199,616

Total equity

194,874

206,449

329,553355,954

Non-controlling interests

Total liabilities and equity
53

56,047

Nippon Seiki Integrated Report

8,616

6,832

01

(Unit: Millions of yen)

Year ended
March 31,2022
Revenue

223,621

Year ended
March 31,2023
275,776

Cost of revenue(187,514)(237,151)

Selling, general and administrative expenses(38,362)(36,173)

Other expenses(3,350)(4,276)

2,840

Finance income

3,053

3,913

Profit (loss) before tax(1,399)6,490

Income tax expense(3,143)(4,400)Owners of the parent(5,180)1,380

Profit (loss) for the year

(4,543)2,089(85.88)22.87(4,543)2,089

Gross profit

Operating profit (loss)

Finance costs

Profit (loss) for the year
Profit attributable to:Earnings per share attributable to owners of the parent:
Basic earnings (losses) per share (Yen)

Diluted earnings (losses) per share (Yen)Profit (loss) for the year

1,329

(176)

(4,543)637(85.88)38,625

02

1,163
(774)

(263)

2,089

03
ESG Initiatives

Non-controlling interests

36,107

Nippon Seiki Group's Value Creation Process

Other income

Overview of Nippon Seiki Group

Consolidated Statement of Income

709

22.85

Other comprehensive income

04

Items that will not be reclassified to profit or loss, net of tax:

Remeasurements of net defined benefit liabilities (assets)

140

(8)

1,170

reclassified to profit or loss, net of tax

131

1,282

Foreign currency translation adjustments

15,48013,108

reclassified to profit or loss, net of tax

15,48013,108

Total comprehensive income for the year

11,06916,481value through other comprehensive income

Total comprehensive income (loss) that will not be

Items that may be reclassified to profit or loss, net of tax:
Total comprehensive income (loss) that may be
Other comprehensive income (loss) for the year

111

14,391

Owners of the parent

9,467

15,501

Comprehensive income for the year

11,06916,481

Non-controlling interests

1,601

05
Company data

Comprehensive income attributable to:15,612Financial Statements

Gains(losses) on financial assets measured at fair

979

Nippon Seiki Integrated Report54Consolidated Financial Statements
Consolidated Statement of Changes in Equity
For the year ended March 31, 2022

(Unit: Millions of yen)
Equity attributable to owners of the parent

As of April 1, 2021
Comprehensive income
Profit for the year

Commonstock

Purchase of treasury stock
Disposal of treasury stock

Acquisition of non-controlling interest

Transfer from other components of equity to retained earnings
Other

Total transactions with owners
As of March 31, 2022

Other components of equity

Gains (losses) on financial assets measured atfair value through other comprehensive income

Remeasurements of net
defined benefit liabilities (assets)

4,455

157,449(1,045)

7,542

―

―
―
―

―
―
―

(5,180)―(5,180)

―
―
―

―
(8)
(8)

―
124
124

―
―
―
―
―
―
―
―
14,494

―
14
―
(30)
―
―
―
(16)
4,438

(2,412)
―
―
―
―
124
(34)
(2,322)
149,946

―
―
(0)
31
―
―
―
31
(1,014)

―
―
―
―
―
(0)
―
(0)
7,533

―
―
―
―
―
(124)
―
(124)
―

Total comprehensive income (loss)
Transactions with owners

Share-based payment transactions

Treasurystock

14,494

Other comprehensive income (loss)

Dividends paid

Retainedearnings

Capitalsurplus

Equity attributable to owners of the parent

Other components of equity
As of April 1, 2021
Comprehensive income

Foreign currencytranslation adjustments

Profit for the year

Other comprehensive income (loss)

Total comprehensive income (loss)
Transactions with owners
Dividends paid

Share-based payment transactions
Purchase of treasury stock
Disposal of treasury stock

Acquisition of non-controlling interest

Transfer from other components of equity to retained earnings

Other

Total transactions with owners
As of March 31, 2022

Total

Total equity attributableto owners of the parent

Non-controllinginterests

Total equity(3,672)

3,869

179,2227,307

186,530―
14,531
14,531―
14,647
14,647(5,180)14,647
9,467

637
964
1,601

(4,543)
15,612
11,069

―
―
―
―
―
―
―
―
10,858

―
―
―
―
―
(124)
―
(124)
18,392(2,412)
14
(0)
0
―
―
(34)
(2,433)
186,257

(283)
―
―
―
―
―
(8)
(291)
8,616

(2,695)
14
(0)
0
―
―
(43)
(2,725)
194,874

For the year ended March 31, 2023

(Unit: Millions of yen)
Equity attributable to owners of the parent
Commonstock

As of April 1, 2022
Impact of changes in accounting policies
Beginning balance after restatement
Comprehensive income
Profit for the year

Other comprehensive income (loss)

Total comprehensive income (loss)
Transactions with owners
Dividends paid

Share-based payment transactions
Purchase of treasury stock
Disposal of treasury stock

Acquisition of non-controlling interest
Transfer from other components of equity to retained earnings
Other

Total transactions with owners
As of March 31, 2023

Retainedearnings

CapitalsurplusTreasurystock

Other components of equity

Gains (losses) on financial assets measured atfair value through other comprehensive income

Remeasurements of net
defined benefit liabilities (assets)

14,494―
14,494

4,438
―
4,438

149,946258
150,205(1,014)―(1,014)

7,533
―
7,533

―
―
―

―
―
―

―
―
―

1,380
―
1,380

―
―
―

―
1,170
1,170

―
95
95

―
―
―
―
―
―
―
―
14,494

―
14
―
(42)
25
―
―
(2)
4,435

(2,413)
―
―
―
―
162
(26)
(2,277)
149,307

―
―
(0)
42
―
―
―
42
(972)

―
―
―
―
―
(66)
―
(66)
8,637

―
―
―
―
―
(95)
―
(95)
―

Equity attributable to owners of the parent

Other components of equity
Foreign currencytranslation adjustments
As of April 1, 2022
Impact of changes in accounting policies
Beginning balance after restatement
Comprehensive income
Loss for the year

Other comprehensive income (loss)

Total comprehensive income (loss)
Transactions with owners
Dividends paid

Share-based payment transactions
Purchase of treasury stock
Disposal of treasury stock

Acquisition of non-controlling interest

Transfer from other components of equity to retained earnings

Other

Total transactions with owners
As of March 31, 2023

55

Nippon Seiki Integrated Report

Total

Total equity attributableto owners of the parent

Non-controllinginterests

Total equity

10,858―10,85818,392―
18,392

186,257
258
186,515

8,616
77
8,694

194,874
335
195,210―
12,854
12,854―
14,12014,1201,380
14,12015,501

709
270
979

2,089
14,391
16,481

―
―
―
―
―
―
―
―
23,713

―
―
―
―
―
(162)
―
(162)
32,351(2,413)
14
(0)
0
25
―
(26)
(2,400)199,616

(277)
―
―
―
(2,557)―(6)(2,841)
6,832(2,691)14(0)
0(2,531)―(33)(5,241)
206,449

01（単位：百万円）

Year ended
March 31,2022
Cash flows from operating activities:
Profit (loss) before tax

Depreciation and amortization
Impairment loss

Interest and dividends income
Gains and losses related to step acquisition(Gain)(Gain) loss on sale of property, plant and equipment(Increase) decrease in trade and other receivables(1,399)Year ended
March 31,2023

6,490

11,916

12,068(1,481)(2,669)

3,090
169
―

81

4,063

291

(1,498)

2,428

03

132

(323)

(10,311)(Increase) decrease in inventories(19,577)(19,263)

Increase (decrease) in provisions

(765)

(91)

Increase(decrease) in trade and other payables
Increase (decrease) in retirement benefit liabilities
Foreign exchange losses(gains)
Other, net
SubtotalInterest and dividends received

179
407

(906)

(310)
39

(29)

(3,447)(15,211)

(170)

(286)

1,524

Income taxes paid

(3,284)(4,989)Net cash provided by operating activities(5,437)(18,057)(Increase)decrease in time deposits, net(369)

Other, net

Cash flows from investing activities:

Purchase of property, plant and equipment and intangible assets

Proceeds from sale of property, plant and equipment and intangible assets
Purchase of investment securities

Proceeds from sale of investment securities
Increase in loans receivableCollection of loans(7,473)
(69)

(81)

(7)

(12)

(120)

(1,518)

(2)

(33)

572

1,175
110

(1,334)

Net cash used in investing activities(7,518)Cash flows from financing activities:(Decrease) increase in short-term loans, net
Proceeds from long-term loans

Repayments of long-term loans

Repayments of lease obligations

Dividends paid to non-controlling interests
Net decrease (increase) in treasury stock

Expenses due to redemption of corporate bonds

Net cash used in financing activities

Foreign currency translation adjustments on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

3,000
7,040

597
80

―

19,713
4,100

13,000(10,755)(7,837)

(296)

(402)

(2,075)0(2,411)――(5,498)
1,601(16,853)
41,65024,79604

122(1,856)005(2,413)(2,531)Company data

Expenditures due to acquisition of subsidiary shares without change in scope of consolidation

30,108(9,548)

Payments for investments in associates
Other, net―

Financial Statements

Purchase of investments in subsidiaries resulting in change in scope of consolidation(60)

ESG Initiatives

Interest paid

773

02

263

Nippon Seiki Group's Value Creation Process

Interest expense

Dividends paid to owners of the parent

Overview of Nippon Seiki Group

Consolidated Statement of Cash Flows

(30)

2,028
1,562
5,246

24,79630,043

Nippon Seiki Integrated Report56

Directors

6 Kazuhiko Murayama

4 Yuji Osaki

11 Toshihiko Enomoto

1 Koichi Sato

Representative Director,
President Chief Executive Officer
Apr. 1985
Apr. 2006
Jun. 2011
Jun. 2013
Apr. 2017
Jun. 2019
Jun. 2020

Joined Nippon Seiki Co., Ltd.
Vice President NS International, Ltd.
Director
Managing Director
Senior Representative Director
Representative Director
PRepresentative Director, President CEO(Present)

4 Yuji Osaki

Director/Managing Officer

Mar. 1982
Jun. 2014
Oct. 2016
Apr. 2018
Jun. 2019
Jun. 2020
Jun. 2022
Apr. 2023

Joined Nippon Seiki Co., Ltd.
Operating Officer
Senior Manager of Business Supervison dept. 1,
Business Headquarter
Chief of Sourcing Headquarter
Senior Operating Officer
Director/Manageing Officer (Present)
Chief of Sourcing Headquarter,
In charge of Sourcing, Sensor・EMS・
Parts Business,Consumer Business Headquarter
Region in Charge Japan (Present)

7 Tatsuya Nagai
Director（Auditor）

Mar. 1982
Mar. 2003
No. 2006
Apr. 2014
Jun. 2018
Jun. 20192 Keiichi Nagano

Joined Nippon Seiki Co., Ltd.
Senior Manager Corporate Planning dept.
Senior Manager Business Promotion dept.
Senior Manager Internal Audit Office
AuditorDirector (Auditor)(Present)

3 Masatoshi Azuma

1 Koichi Sato

8 Etsuo Saiki

5 Masahiro Yoshihara
9 Eiko Tomiyama

2 Keiichi Nagano

Director/Senior Managing Officer

Apr. 1989
Nov. 2016
Apr. 2020
Jun. 2020
Jun. 2021
Jun. 2022
Apr. 2023
Jun. 2023

Joined Nippon Seiki Co., Ltd.
Director, Nippon Seiki（Europe）B.V.
Operating Officer Instrument Design Headquarter
Senior Operating Officer
Director, Senior Operating Officer
Director/Manageing Officer
Chief of Automotive System Design Headquarter
In Charge of Engineering Headquarter
Region in Charge：Europe (Present)
Director/Senior Manageing Officer (Present)

5 Masahiro Yoshihara
Director/Managing Officer

Sep. 1985
Oct. 2016
Apr. 2021
May. 2021
Jun. 2022
Apr. 2023
Jun. 2023

Joined Nippon Seiki Co., Ltd.
Shanghai Nissei Display System Co., Ltd.
Operating Officer
Chief of Production Engineering Headquarter
Director/Senior Operating Officer,
Chief of Production Engineering Headquarter
In Charge of Production, Production Engineering,
Quality Assurance Headquarter,
Region in Charge: Americas (Present)
Manageing Officer(Present)

8 Etsuo Saiki

Outside Director（Auditor）

Apr. 1979
Apr. 1979
Apr. 1983
Apr. 2002
Apr. 2003
Apr. 2004
May. 2009
May. 2015
Jun. 2019

Registered as an Attorney
Joined Kiichi Sakai Attorney OfficeOpened Sakai・Saiki Attorney OfficeNiigata University Faculty of Law Affiliate Professor
Niigata Regional Court Civil Mediator
Niigata University Practical Law Associate Professor
Chairperson Asahi Niigata Legal Office (Present)
AuditorDirector (Auditor)(Present)

3 Masatoshi Azuma
Director/Managing Officer
Apr. 1984
Jun. 2014

Jun. 2018
Jun. 2020
Apr. 2021
Apr. 2023

Outside Director（Auditor）

Apr. 1975
Sep. 2000
Jun. 2003
Jun. 2005
Jun. 2007
Jan. 2014
Jun. 201957

Joined Sanden Holdings
Quality Manager Sanden Holdings
Technical Officer Sanden Holdings
Technical Director Sanden Holdings
Director Engineering, IT, Corporate
Management Sanden Holdings
Senior Operating Officer Paramount Bed Co., Ltd.
Director (Auditor)(Present)

Nippon Seiki Integrated Report

11 Toshihiko Enomoto
Outside Director（Auditor）

Apr. 1985
Aug. 2008
Jun. 2013
Jun. 2015
Jun. 2016
Jun. 2021
Jun. 2023

Joined NSK Ltd.
Accounting Senior Manager NSK Ltd.
Operating Officer, Deputy Chief ofFinancial Headquarter NSK Ltd.
Director, Audit Manager NSK Ltd.
Director, Audit Committee Member
Director NSK Ltd.
Director (Auditor)(Present)

Joined Nippon Seiki Co., Ltd.
Operating Officer,
Engineering Headquarter Automotive Instrument
Design Supervision dept. Deputy Senior Manager
and HUD Engineering dept. Senior Manager
Senior Operating Officer
Managing Director (Present)
Chief of Corpoarte Management Headquarter
Region in Charge：ASEAN/Taiwan(Present)
In Charge of Corpoarte Management Headquarter
Region in Charge：ASEAN/Taiwan/India(Present)

6 Kazuhiko Murayama
Director/Senior Operating Officer

Apr. 1985
May. 2015
Apr. 2019
Apr. 2021
Jun. 2021
Jun. 2022
Apr. 2023

Joined Nippon Seiki Co., Ltd.
Managing Officer, Nissei Display Sales andDevelopment Co., Ltd.
Oparating Officer Business Headquarter International
Business Supervision dept.
Chief of Automotive Business Headquarter
Senior Operating Officer
Director/Senior Operating Officer(Present),
Chief of Automotive Business Headquarter
In Charge of Automotive Business, HUD Business,
Instrument Business Headquarter
Region in Charge: Americas (China)

9 Eiko Tomiyama
Outside Director（Auditor）

Apr. 1986
Aug. 1989
Apr. 1994
Mar. 2002
Apr. 2006
Apr. 2010
Apr. 2014

10 Kiyoshi Suzuki

7 Tatsuya Nagai

10 Kiyoshi Suzuki

Jun. 2018
Jun. 2019

Joined Itoman
Niigata Television Translator, Intenational
Communication
Niigata Regional Court Legal Interpreter
Ph.D (Economics) Niigata University Modern Society
Culture Research
Assosiate Proffessor Graduate Institute for
Entrepreneurial Studies
Proffessor Graduate Institute for Entrepreneurial
Studies (Present)
Vice President Graduate Institute for Entrepreneurial
Studies (Present)
AuditorDirector (Auditor)(Present)Integrated Report Review
01
Overview of Nippon Seiki Group

Biography

Nomura Institute of CapitalMarkets Research
Head of Nomura Sustainability
Research Center

Akane Enatsu

Literary works

Japanese Local Government Bonds (Single Author), The Era of
Sustainable Finance - ESG/SDGs, Bonds market (Co-author) etc.

02

As written above, this integrated report clarifies that management that integrates financial and non-financial aspects is
progressing smoothly. On the other hand, there are also somechallenges. Since countries and regions around the world accelerate efforts for transition to a decarbonized society and realize asustainable society, greater disclosure of non-financial information
is increasingly demanded by stakeholders. Simultaneously, in
addition to efforts by the International Sustainability Standards
Board (ISSB) to develop global sustainability disclosure
standards, some countries and regions are also beginning to
make disclosure mandatory.
Needless to say, it is important for Nippon Seiki, which has awide group network not only in Japan, but also in the US, Europe,and Asia, to be even more aware of these trends and to respondaccordingly.
For example, focusing on the environment (E), Nippon Seiki
currently sets CO₂ emissions reduction targets based on Scope 1
and Scope 2. But the number of companies which are aiming to
reduce CO₂ emissions in the supply chain, i.e, Scope 3 is increasing globally. Furthermore, disclosure frameworks are being
developed around the world, not only for climate-related topics,
but also for topics such as biodiversity and natural capital.
Therefore, preparations and responses concerning environmental
issues are required.
Moreover, as ESG investment evolves in the global financial
market, an increasing number of investors are trying to determine
whether ESG-related initiatives by companies truly contribute toincreasing value. In that sense, using data to clearly explain the
logic of how ESG-related initiatives can lead to increased
corporate value, along what path and over what time frame, will
help to bring Nippon Seiki's appeal to the financial market. It is
assumed that this will become increasingly important in communicating correctly.
This integrated report can be said to be a meter for measuring
the progress and direction of the value creation process for
Nippon Seiki. I hope that Nippon Seiki will continue to develop
more and more, and its corporate value will further increase
through information disclosure.

Nippon Seiki Group's Value Creation Process

03
ESG Initiatives

04
Financial Statements

This is the third year that Nippon Seiki has published the integrated report. It aims to strengthen its earnings structure throughmedium-term management reforms and to take an "outside-inbusiness approach" to develop its business by focusing on solvingsocial issues. The company's ongoing initiatives, namely its
commitment to management that integrates financial andnon-financial aspects, are more clearly demonstrated in the reportcompared to the previous ones.
As for finance, in the midst of a period of transformation for the
automobile industry, the company has a system in place tocontinuously run the PDCA cycle by setting KPIs for eachbusiness field and monitoring progress, thereby achieving thecompany's goal of maximizing added value. This indicates steadyprogress towards minimizing fixed costs.
Among non-financial aspects (ESG), in relation to the environment (E), Nippon Seiki announced its support for the TCFD
recommendations in September 2022 and joined the TCFD
consortium. Then, information disclosure based on the four
disclosure items i.e., governance, strategy, risk management,
indicators, and targets by the TCFD Recommendations has beenenhanced. As of the end of September 2023, approximately 5,000
financial institutions and companies around the world and 1,500 in
Japan have endorsed the TCFD. It is expected for Nippon Seiki,
which is expanding its business around the world, that this willcontribute to the expansion and facilitation of future transactions.
In relation to society (S), the company established a humanrights policy in February 2023 while expanding its efforts in humancapital management through human resource development,enriching the workplace environment, health management, etc.
The company is already promoting human rights due diligence,and it is believed that appropriate responses to human rights
issues will help avoid damage to corporate value and maintainand improve it.
In terms of corporate governance (G), the company explainedthat efforts are being made to continue to improve the board of
directors, expand risk management and compliance promotion
systems, ensure the safety of intellectual property and usefulrights, and strengthen the utilization of rights.

She received a Master of Business Administration (Oxford University)and PhD in Economics (Saitama University)
She joined Nomura Capital Markets Research Institute in 2012 afterworking at Goldman Sachs Securities, Nikko Citigroup Securities,
etc. and has been in her current position since December 2019. Her
research interests include national and local finance, credit analysis
and ratings, and sustainable finance. She has served as a committee
member of the government, local governments, etc.

Message | Upon publication of the Integrated Report 2023

Masatoshi Azuma

Company data

Director and Managing Executive Officer
In charge of business management
headquarters

05

Thank you for reading the Integrated Report 2023. We have tried to convey in an easy-to-understand manner of how our group's business activities utilize our "strengths" based upon ourmanagement philosophy and aim to balance business development with solving social issues,or value creation process.
continuing to transform into a more lean or muscular corporate structure, we are drawing up
growth strategies through various challenges and moving forward toward the next medium-term
management plan, which is currently being formulated. We hope that this information will help
you understand the Group's medium- to long-term value creation.
We will continue to value opportunities for dialogue with everyone, strive to disclose information in a timely and appropriate manner, and endeavor to further improve corporate value.

Nippon Seiki Integrated Report58