Sticking to your needs

Nichiban Group

Integrated Report2023

Aim of the Nichiban Group Integrated Report 2023
In line with the “NICHIBAN GROUP 2030 VISION”, the Nichiban Group Integrated Report 2023 summarizes the Nichiban Group’s current
approach and future prospects for the sustainable enhancement of corporate value, including business activities based on the business model
we have created and ESG management initiatives.

Sticking to your needs
Nichiban Group Philosophy
Spirit of Founders
Work together in harmony andtake initiative with enthusiasm.

Basic
Philosophy
Nichiban respects
people’s cooperative
relationship and strives
to foster prosperity andhappiness for all stakeholdersof Nichiban Group.

Corporate Policies
Nichiban continuously strives to contributeto the comfort of people’s lives throughthe value-added technology from its base ofexpertise in adhesive field.

CONTENTS
Value Creation Strategies Message from the President
Nichiban Group History
Nichiban Group Value Creation Process
Nichiban Group Strengths
Financial and Non-financial Highlights
Medium-term Management Plan
Message from the Financial Officer
Business Strategies		 Research and Development		 Domestic Business			Consumer			Hospital Product			Industrial Product		 Overseas Business

2
6
8
10
12
14
16
18
18
20
21
24
25
26

Growth Foundation

Nichiban Group Sustainability
Initiatives for the Environment 
Initiatives for Society
Nichiban Group Human Capital Management 		 Social Contribution Activities
Initiatives for Corporate Governance		Management		 Corporate Governance		 Messages from Outside Directors

28
34
42
42
47
48
48
50
54

Data

56
58

Eleven-year Financial and Non-financial SummaryCorporate Data, Share Information, Others

Editorial Policy
The Nichiban Group Integrated Report 2023 aims to provide all shareholders andinvestors with details on value created by the Nichiban Group, management andfinancial strategies, business strengths, performance reports, and ESG information that
includes initiatives targeting the environment, human capital, local communities, andcorporate governance.

Action Guidelines
Society

Customers

Challenge

Speed

Teamwork

Take actions withsincerity and workwith pride.

Deliver results that aregood and beneficial
for customers.

Seek to accomplish
tasks with confidence
in positive results.

Take actions swiftlyand make necessarychanges rapidly.

Extend cooperation
beyond sections andcarry through to the end.

Organizations Covered in this Report
Nichiban Co., Ltd.
Nichiban Print Co., Ltd.
Nichiban Techno Co., Ltd.
Nichiban Medical Corp.
NICHIBAN (THAILAND) CO., LTD.
NICHIBAN EUROPE GmbH

Explanatory Notes
The Nichiban Group refers to the Nichiban Group on a consolidated basis.
Nichiban refers to Nichiban Co., Ltd.
“®” indicates registered trademarks; “™” indicates trademarks.
* “Paralym Art®” is a registered trademark of The Parents, Inc.
Reporting Period
April 1, 2022–March 31, 2023
In light of the importance of providing up-to-date information, some information onorganizational structure and policies are included for the year 2023.
Reference Guidelines• IFRS Foundation, International Integrated Reporting Framework• Ministry of Economy, Trade and Industry Guidance for Collaborative Value Creation
Date of Publication
September 2023

About Reporting MediaOur corporate mark under the nickname of“N Wing” express Nichiban’s initial N andthe wing for the bright future.

OriginThe logo symbolize our human attitude of “Fostering happiness for all
those concerned with the Nichiban Group” with the soft curves usedthroughout two figures facing each other representing improving therelationship between people themselves, as well as people and theenvironment, through communication.

“NICHIBAN Red”
The corporate color “NICHIBAN Red” is an expressionof the Nichiban Group's challenging spirit, taking on
new domains and ushering in the new era.

Major Information Disclosure Tool

Content

Official website

This website covers all aspects of the Nichiban Group, including product and corporate information and the“NICHIBAN GROUP 2030 VISION”.
https://www.nichiban.com/

Nichiban Group Integrated
Report 2023

Starting in fiscal 2023, in place of Sustainability Reports published previously, we are publishing the NichibanGroup Integrated Report, which integrates financial and non-financial information.

Corporate
Governance Report

In accordance with the Corporate Governance Code, this report describes the objectives, status, and initiativesof Group corporate governance.
https://www.nichiban.com/corp/ir/policy/governance/#nav_anc5 (in Japanese only)

Annual Securities Report

Disclosure for shareholders and investors regarding general Group status, business and financial conditions,and accounting status.
https://www.nichiban.co.jp/corp/ir/library/security_reports/ (in Japanese only)This publication

Nichiban Group Integrated Report 2023

01

Message from the President

Message from the President

Please explain Nichiban’s mechanism of value
creation, along with its features and strengths.

Preserving the corporate

contributes to society globally, and that so long as we are a manufacturer,
we would continue to regularly generate new value and technologies. We
adopted the slogan “Continue to create value that supports a comfortable

quality of trust is the basisof our value creation.

The Nichiban Group’s strength lies in its proprietary adhesive

life, and become a company that contributes globally,” and set a clear

technologies accumulated over more than a century in business.

direction with ratios of 30% new products and 30% overseas sales.

These core technologies have been applied to develop a wide range of

There were some less than positive reactions at first, questioning who

products in the tape and medical fields, and by providing solutions

would be responsible and how to achieve these goals, but now that wefor a wide variety of issues we have achieved stable earnings andhave shared and spread this vision, I feel that we have begun to foster

contributed to society. That is Nichiban Group’s value creation process.

a mindset among employees of making their work their own.

There are also factors that differentiate us from competitors, such as the

The Nichiban Group will steadily implement its
medium-term management plan, now in its final
year, to achieve our vision for fiscal 2030.
Of the five priority themes in the plan,
the Nichiban Group will focus on “Creating
Innovation” and “Global Expansion,” the areas
directly linked to the realization of our
medium- to long-term vision.

Toshiaki Takatsu
President

The current medium-term management plan “ISHIZUE (foundation)

low environmental load of products such as cellulose tape owing to the2023 ~SHINKA (evolution/deepening)·HENKAKU (reform)~” is focuseduse of natural materials. In the medical field, where items are applied toon laying the foundation to bring us closer to reaching our goal for 2030.

the skin, Nichiban products are characterized by functionality that makes

The plan has five priority themes: 1) Creating innovation; 2) Global

them well suited for human skin, such as preventing rashes andbusiness development and expansion; 3) Revision of the businessbreathability to prevent stuffiness. In addition, our products for industrial

structure and profit reform; 4) Active use of AI and IoT; and 5) Humanapplications require a variety of characteristics depending on eachresource development. The first two themes in particular are directly

application, and Nichiban is highly regarded for its adhesive technologies

linked to the realization of our medium- to long-term vision, so we haveand a wide range of support mediums to meet specific needs. A further

positioned them as engines for future growth. In addition, along withstrength is the relationships of trust with suppliers that we have built

profit reform through such means as consolidating unprofitable businessover many years, and our strong customer base. The Nichiban Group isdivisions, rather than simply separating business segments into “medical”

as committed to corporate quality as it is to our product quality. We(products affixed to people) and “tape” (products affixed to things) as we

believe that preserving our corporate quality of trust that has endured forhave up to now, to strengthen business centered on customers, we are

more than a century will continue to be the basis of our value creation.

conducting more customer-focused sales activities, seeking out new
development projects and working to expand our customer base.

When you were appointed president in 2019,
you announced a new medium- to long-term vision,and a medium-term management plan. What was
the background to this announcement?

That is, in terms of medical products, there are healthcare products for

The Nichiban Group celebrated its 100th anniversary in 2018, so 2019,with solutions. Further, we are actively investing in IT and pursuingwhen I was appointed president, marked the start of a medium-term

human resource development to support these activities.

the general consumer (B2C), and medical products for hospitals (B2B).
The same is true for tape products. We have revised our businessstructure to be more customer focused, in line with the Nichiban Group
Philosophy and values of listening to each customer, and providing them

management plan for the next 100 years. Before becoming president,
I had been involved with preparing management plans as team leader,
so when it came to formulating this present medium-term management

This is the first time that the Nichiban Group has
issued an Integrated Report. What is your purpose
and aims?

recognition, but at times we felt that we were not fully communicating
our characteristics as a company, or what we aim to achieve. We decided
that for people to better understand Nichiban, we needed to be moreproactive in our communication. I think it’s particularly important to draw

Our main objective is to enhance non-financial disclosure, such as theconnections between what we are doing now to achieve our goals forcharacteristics and direction of the Nichiban Group, and our sustainability

the future and so I expect communicating this message both within andinitiatives as a listed company in Japan, not only disclosure of financial

outside the company will enhance understanding of the Nichiban Group.

information already provided, and to create a tool for stakeholders. Our

We also hope to use the report as a communication tool to receive

corporate name Nichiban, as well as products such as cellulose tape,

feedback from stakeholders.

CARELEAVES™, and ROIHI-TSUBOKO™ have a certain level of name02

Nichiban Group Integrated Report 2023

The medium-term management plan is in its final
year. What are your thoughts looking back?

plan, I felt that we should first clarify the direction we are heading for the
next five years. Furthermore, since we needed to show the connection

It’s been four years since the start of the plan, and the businessbetween how we want to be in the further and what we should do overenvironment continues to be severe. Along with the impact from thethe next five years to achieve it, we positioned the medium-term

COVID-19 crisis, an event we of course did not anticipate at the time

management plan as the means to realize our medium- to

the plan was formulated, business performance has been hampered

long-term vision.

more recently by supply chain disruptions, and rising material and

The medium- to long-term vision “The NICHIBAN GROUP 2030

energy prices. Nevertheless, although there have been some areas

VISION” began with discussions on what we wanted the Nichiban Group

where we were unable to function fully due to restrictions necessitatedto be in 2030 (12 years from the time of its formulation), and what itby the pandemic, I believe that overall, we have made steady progressshould be. As the domestic market matures, in a bid for sustainablewith each priority theme, laying the foundation for the future.

growth, we decided that we wanted to be a manufacturer that

Nichiban Group Integrated Report 2023

03

Message from the President

For creating innovation, one of our engines for future growth, whilebusiness based on market feedback bodes well for future productstructural issues, such as rising costs stemming from reduced production

we have not yet reached the stage of launching new businesses, we aredevelopment. As for our target overseas sales ratio, despite continuedof the raw material due to environmental measures, or delays in supply.

pursuing various initiatives focused on how to make use of Nichiban

negative external factors, figures are steadily rising, and our sales

Further, a logistics problem in delivering products to customers hasGroup’s core adhesive technology. Especially in B2B areas such as

subsidiaries in Thailand and Germany have already achieved profitability.

become an issue we need to address. We have established Supply Chain

products for hospitals and industrial applications, we have seen the

However, due in part to the impact of restrictions on activities during theDivision to centrally manage these procurement and logistics risks,benefits from revising the business structure. I feel that we havepandemic, we still have not fully established a system for further

aiming to further strengthen communication with suppliers and logistics

established a development system able to directly utilize customer

expansion, and need to increase the number of business bases overseas,

companies, and deepen cooperation.

feedback to determine the type of use and where there is demand, andincluding production and logistics. We will continue to consider M&A as

offer business proposals. Also, in terms of open innovation, we area key strategy to achieve this.

conducted with sufficient deliberation, including opinions and questions

CARELEAVES™ and ROIHI-TSUBOKO™ are currently key sources ofmaking Nichiban technologies openly available to solicit ideas for novel

The Nichiban Group has made steady progress in other areas asfrom various perspectives, as well as advice based on a wide range of

earnings, but considering the various issues in the mobility field, such as

uses, with the aim of finding partners for collaboration, including outside

well, including enhanced productivity with the introduction of IT systems,

experience, including the basis and background for specific decisions.

autonomous driving and weight reduction, I believe there is potential tostart-up firms. There are undoubtedly applications and functions that wehuman resource management utilizing the Workplace Engagement

I often receive advice from outside directors to be “bold yet cautious,”

expand the scope for utilizing the Nichiban Group’s core technologies tohave not recognized, and going forward it will be important to focus on

Improvement Project, and environmental investments

which I think is an apt phrase, as governance should be effective in terms

products for industrial applications, an area in which I had been

co-creation with partners, rather than maintaining the policy of self-

for desolventization.

of both offense and defense. In addition to assessing the effectiveness of

personally involved. There are also sectors we have yet to develop, suchthe Board of Directors through questionnaires and other means, we also

as civil engineering, to address societal issues including solutions for

conduct multifaceted evaluations that include executive officers. Further,aging infrastructure. We plan to explore possibilities through various

we have introduced a system to ensure that every corporate officerroutes such as academic conferences. In medicated products, developing

understands the issues, and the system allows officers to reflect on theirbusiness in fast-growing emerging countries is a major growth

own performance.

opportunity. As standards of living rise, consumers tend to favor products

sufficiency that we have up to now. In the next medium-term

What are the characteristics and effectiveness of
Nichiban’s corporate governance system?

management plan, we will aim to link our activities up to now withcreating new value.
For the other growth engine of global business development andexpansion, in October 2020, we established a sales subsidiary in

The Board of Directors comprises eight members, four of whom are

Dusseldorf, Germany, putting in place a structure with three bases

outside directors. In March 2021, we established the Nomination and(Japan, Thailand, and Germany) covering East Asia, Southeast Asia,

Remuneration Committee, along with other measures to ensure

policies and risk management, but another important theme is

Nichiban Group’s core technologies and commitment to quality will be

Oceania, and Europe. Although Europe is a difficult market, the fact thatindependence and transparency. I am in a supervised position, and I am

sustainability initiatives to support Nichiban Group’s continued growth,major advantages. Returning to Japan, the aging society also presents

we have been able to directly approach local customers and develop

confident that investment projects such as M&A, for example, aresuch as measures to cope with climate change and solutions to societal

an opportunity for medical products. For example, in the field of home

issues. How to preserve corporate quality, which I mentioned earlier,

medical care and nursing care, there is growing demand at home foris a particularly important issue for the Board of Directors. Further, theusing the same items used in hospitals. In the case of the Nichiban

addition of a female outside director since the previous fiscal year has

Group, the fact that we have sales channels for both products usedprovided us with candid comments and opinions regarding such issues

in hospitals and products handled in drugstores will be our strength.

as initiatives for women’s empowerment, human resource development,

As Japan will experience an aging society before other countries, if weand workplace safety, ensuring firm support for our activities andare successful here, we will consider using this as a model case to expand

business foundation.

business overseas.

Considering future changes in the businessenvironment, what do you perceive as the risk
factors and growth opportunities?

Finally, what message do you have for stakeholders?

Developing human capital for sustainable future growthEstablishing driver of medium- andlong-term growth, innovation creation• Developing human resources for future sustainable growth• Strengthening professional skills• Developing the next generation of management

Active use of AI and IoT to promotebusiness strategies• Strategic use of data: Strategic use of information(data) to achieve business objectives• Business process transformation: Business processtransformation to generate added value forthe business• Responding to changes in the business environment:
Flexible response to future changes in the businessenvironment and risk reduction

04

In terms of growth opportunities, medical products such as

Nichiban Group Integrated Report 2023

• Promote innovation creation Create new businesses• Deepen and explore core technologies• Strengthen market customer insight analysis andmarket-oriented development

ISHIZUE
2023
BUSINESSMODELCORPORATEMODEL~SHINKA·HENKAKU~~SHINKA·HENKAKU~

Speedy development and expansion
into global markets• Global business promotion system Establishment ofoverseas business infrastructure• Business alliances as a measure for businessexpansion—use of M&A• Proactive acquisition and development of global
human resources

Review of business promotion structure and profit reform• Business promotion with customers at the core
• Scrap and build products and activities from the perspective of operating income andfuture business potential• Optimum allocation of management resources (capital investment, personnel allocation)

The Board of Directors reports and discusses general managementwith higher quality and functionality. The time will surely come when

The Nichiban Group celebrated its 100th anniversary in 2018. Looking
ahead to the next 100 years, we have renewed our basic philosophy,

Along with the maturation of the Japanese market, the decline in the

adopting the phrase “Nichiban respects people’s cooperative

working population, and geopolitical tensions, one of the risk factors

relationships and strives to foster prosperity and happiness for all

for the Nichiban Group, which consumes resources in its production

stakeholders of Nichiban Group.” We aim to be a company where allactivities, is delay in implementing environmental measures. Most

employees work together to continually create value that supports

recently, rising raw material and energy prices, along with disruptions in

comfortable lives. A wide variety of feedback from customers who use

the supply chain, have had a significant impact on business performance.

our products, and from all stakeholders, will be a major driving force in

In addition, because the Nichiban Group uses materials manufactured

our success. We look forward to hearing your candid opinions, and ask

from naphtha for its products, we need to consider procurement risks as

for your continued support.

Nichiban Group Integrated Report 2023

05

Nichiban Group History

Nichiban Group History

2017
Established NICHIBAN (THAILAND)
CO., LTD., in Bangkok, Thailand

Nichiban has developed a wide range of products from its base of expertise in adhesive fields, its core technology, and has built its brand overa long period of time.
Nichiban was founded in 1918 as Utahashi Pharmaceutical Office in Minami-Shinagawa, Tokyo. With beginnings in the manufacture ofointments, adhesive plasters and other plasters. Nichiban continues to deliver “sustainable products that make people’s lives more
comfortable,” including cellulose tape, which is still widely used today.

Company Developments

1918
Establishment of Utahashi
Pharmaceutical Office
Utahashi Pharmaceutical Office founded in
Minami-Shinagawa, Tokyo.
Launched manufacture of ointments, plasters, andother products.
This factory is the origin of the Nichiban Group.

Ahead of the 100th anniversary, the eight-year
medium- to long-term business plan “NB100” wasformulated and launched in fiscal 2011 to develop avariety of businesses.

25 plaster manufacturers nationwide centeredaround Utahashi Pharmaceutical Office were
integrated into one company. In September 1944,
the trade name was changed to
Nichiban Industry Co., Ltd.

1972
Establishment of the Saitama Factory,
relocated the Tokyo Factory to
the Saitama Factory

1961
Company name changed to
Nichiban Co., Ltd.
State-of-the-art production facilities at both theTokyo and Osaka factories was developed andexpanded, and the company name as changed tothe current Nichiban Co., Ltd.

1967
Establishment of the Anjo Factory

Utahashi Pharmaceutical Office established as acorporate entity from a sole proprietorship in order
to meet increasing demand.

New factory established in Anjo, Aichi Prefecture, toincrease production capacity in response to growing
demand for cellulose tape and other products.

1940—

1932
Launched sales of ROIHI-PLASTER
Pain relief anti-inflammatory patch containing main
ingredients scopolia extract and ichthyol. Sales werebrisk, but production was discontinued during thewar due to raw material shortages.

2018
Commemorated Nichiban’s 100th
anniversary

1944
Company name changed to
Nichiban Industry Co., Ltd.

1934
Establishment of Utahashi
Pharmaceutical Office Co., Ltd.

1910—

Representative Office opened in Bangkok, Thailand,in 2014, then a sales company was establishedin 2017.

2018
Relocated the Osaka Factory, changed
name to the Medical Anjo Factory

The Tokyo Factory relocated to Hidaka, Saitama
Prefecture, as residential development in the areaaround the Tokyo Factory made it difficult for thefactory to expand and add equipment.

As increasing residential development around the
Osaka Factory, a pharmaceutical production base,began to limit factory operations, a new production
facility and a research laboratory were establishedonsite at the Anjo Factory.

1976
Capital participation from
Taiho Pharmaceutical Co., Ltd.

2020
Established NICHIBAN EUROPE GmbHin Dusseldorf, Germany

Financial difficulties due to labor-management
problems stemming from the oil shock andrelocation of the Tokyo Factory resulted in Nichiban
being restructured through capital participation from
Taiho Pharmaceutical.

Representative Office opened in Dusseldorf,
Germany, in 2019, then a sales company wasestablished the following year.

1970—

1948
Launched sales of self-adhesive
cellulose tape

2000—

1978
Launched FAPRO™ (Tabanera™ ) and
FAPRO™ (Tabanera™) Tapes

With a proven track record in the manufacture ofplasters, approached as a supplier of cellulose tapefor sealing envelopes after inspection.

2011
Launched CATHEREEPLUS™

Launched sales of a highly moisture permeable film
dressing for medical use that employs a highly
moisture permeable urethane gel adhesive that isboth gentle on the skin and resists peeling.

Developed from the idea of using tape to bindvegetables, which at that time were bound withstraw and rubber bands.

1966
Launched sales of NICETACK™

2012
Launched CARELEAVES™ Hydrocolloid™

1989
Launched ROIHI-TSUBOKO™

Launched sales of double-sided adhesive tape forthe stationery industry.

The present

Launched sales of plasters that use special material
Moist Pad™ to absorb and retain fluid from wounds
and regenerate skin quickly and cleanly.

Launched sales of small, round, warming plasters in
the pain relief anti-inflammatory patch market,
which until then had been dominated by coolingtype products.

2015
Launched the Dear Kitchen™ brand of
kitchen sundries

1997
Launched CARELEAVES™ plasters

Launched sales of Dear Kitchen™ Waza-Ari™ Tape,a removable water-resistant film material that canbe easily cut by hand.

Commenced development of new products under
the keywords “high quality.” These plasters are
comfortable when applied and feel almost likebare skin.

2016
Launched Atofine™ post-surgery scarcare tape
Launched sales of an adhesive bandage that
protects post-surgical scars and prevents them frombecoming conspicuous.

Product Developments
Global Trends

06

First World War(1914–1918)

Nichiban Group Integrated Report 2023

Second World War(1939–1945)

High economic growth period(1955–1973)

Oil Shock(First: 1973/Second: 1978)

Era name changed to Heisei(1989)

Great East Japan Earthquake(2011)

Era name changed to Reiwa(2019)

Nichiban Group Integrated Report 2023

07

Nichiban Group Value Creation Process

Nichiban Group Value Creation Process
In line with our basic philosophy, the Nichiban Group co-creates new value with stakeholders by leveraging the six types of capital comprising
the source of value creation for our strengths in adhesive technologies. Through this value creation process, we aim to contribute to asustainable society, increase our resilience to global environmental changes, and enhance our corporate value over the medium to long term.

Basic Philosophy
InputsAssessing Risks and Opportunities

Source of Value Creation

Risks

1. Manufacturing capital
Production system comprising mainly manufacturing business
infrastructure and company-owned factories
Manufacturing bases (Domestic factories: 3; Group companies: 3)
Manufacturing capital (fixed asset balance): ¥29.85 billion
Capital investment: ¥4.05 billion

�. Human capital

Promotion of human capital management
Employees: 1,268 people
Outside directors: 50.0%; Outside Audit & Supervisory Board members: 50.0%
DI indicators (non-consolidated)
Female managers: 10.8%
Mid-career hire managers: 9.7%
Male employees taking childcare leave: 66.7%

�. Intellectual capital❶ Sluggish growth of existing products❷ Maturation of existing product lifecycle❸ Heightened need to address climate change❹ Others• Geopolitical risks, product quality risks, and intellectual
property risks

Opportunities❶ Expanded applicability in markets related toenvironmental and social issues❷ Growing new demand in consumer market❸ New markets overseas❹ Advancement of super aged society andgrowing awareness of healthcare-related issues

Accumulation of technologies from its base of expertise in adhesive field
Patents held: 90 items Registered designs: 58 items
Research and development structure

�. Financial capitalSound financial structure
Equity ratio: 58.3%

�. Social and relationship capital

Connections in business development

Bases (Domestic: 16 locations; Overseas: 2 locations)
Overseas exports: Approximately 50 countries
Customer communications infrastructure, local communities

�. Natural capital

Contributions to the environment
Use of naturally occurring raw materials
Environmental value purchased
Green Power Certificates purchased: 11,000,000 kWh contracted in fiscal 2022
Estimated CO2 emissions reduction: 4,995 tons of CO2/year in fiscal 2022

Business Model and Strengths❶ Ability to develop products leveraging
product brands built over a long periodof time❷ Ability to develop high added-value
products based on technologies originatingin the adhesives field❸ Ability to apply and deploy technologies
and functions with a broad business base in
the consumer, medical, and industrial fields❹ Ability to engage in procurement, sales, andchannel connections through a highly
reliable supply chain network and a broadcustomer baseMateriality

08

Nichiban Group Integrated Report 2023

Nichiban respects people’s cooperative relationships and strives to foster prosperity
and happiness for all stakeholders of Nichiban Group.

Outputs

Medium- to Long-term Vision
The medium- to long-term NICHIBAN GROUP 2030 VISION
aims to realize our ideal of being a company based onsolid corporate quality

Results Created through Business Activities<Financial performance>❶ Net sales:❷ Operating income:❸ ROE:❹ New product ratio:❺ Overseas sales ratio:

FY2030Become a company that contributes globally with
continuing to create value of sustaining a comfortable life!
Ratio of new products and overseas sales: 30%

����Contributing to asustainable society

2030

Establishing solid
corporate quality

Medium- to
Long-term Vision¥45.56 billion¥1.61 billion
6.0%
4.4%
10.1%

<Non-financial performance>❶ Reduction rate of CO2 emission volume :-8.4%

compared to FY2021 (includes Green Power Certificate amortization)❷ Health & Productivity Management

Outstanding Organization:

Creating Innovation

Global Expansion• Promote innovation activities tocreate new businesses and major
new products• Deepen core technologies andcreate new technologies• New market development andbusiness promotion forcontribution to SDGs andsustainable society• Improve company-wide
productivity and reform
operations with the participationof all employees• Establish overseas bases(production, sales, logistics)
covering major regions, establish
structures for overseas expansion
strategies• Promote global product strategies
and establish brands• Proactively recruit local humanresources

Certified❸ Oxygen fixed through afforestation activities:

Estimated at 532—937 tons of CO2/year❹ CSR activity initiatives through business: 12❺ Companies endorsing and contributing to
the SDGs with cellulose tape:
117

Outcomes
Created Value

Foundation Supporting Value Creation❶ Corporate governance and internal controls❷ Quality management based on global best practices❸ Customer-centric marketing and development promotion
organization❹ IT systems contributing to strategic data use and businessproductivity improvements❺ Human resources maximally leveraging a wide variety of capabilities❶ Ideal position◆◆◆

Realize Nichiban Group Philosophy and achieve 2030 Vision
Create innovations contributing to the resolution of social issues
Achieve carbon neutrality and next-zero❷ Value to stakeholders
◆
◆

◆
◆

◆

Contribute to healthy and comfortable lifestyles (customers)
Enhance corporate value through sustainable growth(shareholders and investors)
Enhance corporate value with partners (business partners)
Diverse employee growth and improve work-life balance(employees)
Contribute to regional revitalization (regional communities)

Key Sustainability Issues in Management
Climate change and global warming countermeasures/development of products contributing to
the resolution of environmental and social issues/contributing to preventing the spread of infectiondiseases/improving product quality and maintaining safety/enhancing supply chain
management/creating innovations/rapid entry and expansion into global markets

Nichiban Group Integrated Report 2023

09

Nichiban Group Strengths

Nichiban Group Strengths
Today the Nichiban Group has established a business base in a wide range of fields. The Nichiban Group’s strength lies in its ability to expand
using the product brands it has built up over many years, its technology originating in the field of adhesives, and its strong supply chain andcustomers, and it aims to be a company that continues to create value that supports comfortable living and makes a global contribution.

Product Brands Built Up Over
Many YearsBusiness Foundation in a Wide
Range of Fields

Chosen by Customers forMore than

Products:

100 years

Approximately

18,000 items*

Nichiban began with manufacturing and selling ointments,

We provide various product brands that are the “perfect fit” forBased on proprietary adhesive and bonding technologies

continue maximizing our ability to apply and deploy technologies

pastes and plasters, and has been contributing to comfort andcomfortable lifestyles, such as cellulose tape, FAPRO™

accumulated over many years, the Nichiban Group has

and functions with a constant focus on the future aimed atabundance in people’s lives through the provision of “sticky”(Tabanera™), CARELEAVES™, and ROIHI-TSUBOKO™. In 2018,

established a solid business foundation and provides products

contributing to the creation of a prosperous society through tapeproducts in a wide range of fields based on adhesive

we celebrated our 100th anniversary, and will continue to create

offering diverse value in a wide range of fields, from cutting-edge

products that facilitate healthy and comfortable lifestyles while

technologies accumulated through the development of adhesive

new products and cultivate our brands for the next 100 years.

industries such as healthcare, to agriculture and logistics. We willproactively supporting a wide variety of industries.

plasters. Nichiban products are used in a variety of life scenarios.

Robust Supply Chain and Solid
Customer Base

Technologies and Developments
Originating in the Adhesive Field

Overseas exports:

Approximately
Similar to life itself, good technology is always evolving.

development capabilities that create high added value.

50 countries*

Our mission is to “respect people's cooperative relationships andprocurement leveraging an extensive customer base, sales

A technology is born, matures, and produces new technologies

As we look ahead to the future, we are conducting research

strive to foster prosperity and happiness for all stakeholders ofcapabilities and sales channel linkage, as well as market

that are then passed on to the next generation. Nichiban has

daily to realize unprecedented advances in technology. This activity

the Nichiban Group.” We are working toward the rapid

customer insight analysis and a market-oriented development

been refining new technologies since its establishment, withis Nichiban’s lifeline as we aim to be a “trustworthy company.”development and expansion of Nichiban products in Japan andpromotion system. The Nichiban Group will accelerate the taking

technologies originating in the field of adhesives and productWe are embarking on projects that will lead to a new future.

more than 50 countries around the world through our highly

on of challenges in new fields to provide products to all

reliable supply chain network in Japan and overseas,customers throughout the world.
* As of March 31, 2023

10

Nichiban Group Integrated Report 2023

Nichiban Group Integrated Report 2023

11

Financial and Non-financial Highlights

Financial and Non-financial Highlights

Financial Highlights (Consolidated)
Net sales

Non-financial Highlights

Operating income/Operating income margin(Millions of yen)

(Millions of yen)

Operating income (Millions of yen)

Manufacturing (t-CO2)
Logistics (t-CO2)

Operating income margin (%)

47,41744,063

41,52843,13445,560

3,860

3,684

24,712

2021

2022

2018

2019

416,659

15,079

5.7

2020

3.5

2021

2022

(FY)

Net income attributableto owners of parent/ROE

3,411
2018

2019

2020

2021

2022

(FY)

Net income per share/
Dividends per share

2018
(FY)

2,555

2,542

2,355

2,640

2019

2020

2021

2022

2018

2021

2022

2018

Net income per share (Yen)

Total assets (Millions of yen)

Average working years (Years)

Number of male employees who took childcare leave (Persons)

Dividends per share (Yen)Net assets (Millions of yen)

Job turnover (%)

Ratio of male employees taking childcare leave (%)

154.1260,329 59,752 61,214

9.2

38

6.0

2018

2019

2020

18.9

19.0

40,603

4.7

33

8

2.2
1.8

35

30

30

1.3

2022

2018

2019

2020

2021

2022

(FY)

2018

(Millions of yen)

2020

2021

2018

2022

(FY)

Capital investment/
Depreciation and amortization

Free cash flows*1

2019(Millions of yen)

4,369

4,092

2020

2021

1,184
1,067

1,064

1,057

2,844

2,327
2,054

1,764

2,342

2,545

2019

2020

2021

2022

2018
(FY)

*1 C ash flows from operating activities + Cash flows frominvesting activities

Nichiban Group Integrated Report 2023

2021

2019

2020

2021

10.8
8.6

7.6

7.0

8.8

2019

2020

2021

2022

2018

2019

2020

2021

2022

(FY)

(FY)

Employment of persons
with disabilities (Non-consolidated)

Total training expenditures/Training
expenditures per employee (Consolidated)

Number of persons with disabilities

Training expenditures (Millions of yen)

Employment ratio of persons with disabilities (%)

Training expenditures per employee（Thousands of yen）

81.9

2018
(FY)

149

146

2,757

2022

166

14

157

21
174

Total (%)

65.5

2020

159

30.0

1,110

1,455

2019

16

13

Full-time employees (%)

79.7

65.6

82.6

82.8

68.7

69.4

2018

2022
(FY)

2019

20

2021

127

20

18

117

103

94

70.5
2.2

2020

21

80.2

1,166

841

2018

2,352

12

44.4

(FY)

19
2,755

Number of male managers

Ratio of female managers (%)

5.3

2018

2022

Gender pay gap (Non-consolidated)*3

Depreciation and amortization (Millions of yen)

3,981

Number of female managers

18.5

(FY)

R&D expenses

Capital investment (Millions of yen)

2019

2022

Ratio of female managers(Non-consolidated)

6

5

1.3
1

2021

2021

14

2.6

65.15

3.6

18.5

2020

(FY)

66.7
38,961
36,480 37,218 38,078

87.34

84.54

1,350

4.8

17.6

17.0

114.67

1,809

1,751

69,12364,427

2019(CY)

ROE（％）

2,371

12

2020

Ratio of male employees
taking childcare leave (Non-consolidated)

Average working years/
Job turnover (Non-consolidated)

Total assets/Net assets

2019

(FY)

*2 Target scope: Anjo Factory, Saitama Factory,
three domestic group companies
Based on Japanese Act on Rationalizing Energy Use

Net income attributable to owners of parent (Millions of yen)

3,193

30,692 30,741 30,751 30,351

1,748

1,609
4.8

2020

393,369

551,373523,200

2,070

2,000
6.8

2019

509,818

2,561

2,450

2018

22,520 21,811 22,788 23,285

3,095

2,975

7.8

Number of mangrove trees planted

Number of tape cores collected

CO₂ emissions*2

Ordinary income

2022

2018
(FY)

2.2

2019

2.4

2020

2.5

2021

115

100
2.3

2022

82

2018
(FY)

93
74

2019

2020

2021

2022
(FY)

*3 Ratio of female average salary to male average salary (annual
salary) as 100

Nichiban Group Integrated Report 2023

13

Medium-term Management Plan

Medium-term Management Plan
In 2018, the Nichiban Group celebrated its 100th anniversary and now aims for the next step in its of growth. We have formulated the mediumand long-term vision called the “NICHIBAN GROUP 2030 VISION” with the aim of realizing our vision of being a company based on solid
corporate quality.
As a cornerstone of realizing that medium- to long-term vision, we have established a new medium-term management plan “ISHIZUE (foundation)
2023 ~SHINKA (evolution/deepening)·HENKAKU (reform)~” terms that define what we will work on, “evolution, deepening” and “reform.”

Medium-term Management Plan “ISHIZUE 2023~SHINKA·HENKAKU~”

ISHIZUE 2023

2018
Medium- andLong-term Vision

Mid-termmanagement plan

NICHIBAN GROUP
2030 VISIONISHIZUE 2023
~SHINKA·HENKAKU~~SHINKA·HENKAKU~

2030<For achievement of Medium- and Long-term Vision>

Five year plan of “Evolution and Deepening” and “Reform”
to be the base of realizing, NICHIBAN GROUP 2030 VISION

Medium- and Long-term Vision “NICHIBAN GROUP 2030 VISION”
With the Aim of Realizing our Vision of Being a Company Based on Solid Corporate Quality

Basic Strategy: Our Priority Points

FY2030Become a company that contributes globally with
continuing to create value of sustaining a comfortable life!
Ratio of new products and overseas sales: 30%
2018
New products
ratio

6%

Establishing driver of medium- and long-term growth, innovation creation1

Speedy development and expansion into global markets

2030

2023

10% level30%• Promote innovation creation Create new businesses• Deepen and explore core technologies• Strengthen market customer insight analysis and market-oriented development

Innovation
Creating new value

2• Global business promotion system Establishment of overseas business infrastructure• Business alliances as a measure for business expansion—use of M&A• Proactive acquisition and development of global human resources

Business model~SHINKA·HENKAKU~

Overseas sales
ratio

7%

10% level

30%

Global contribution

Review of business promotion structure and profit reform

Promote global contribution company

3• Business promotion with customers at the core
• Scrap and build products and activities from the perspective of operating income and future business potential• Optimum allocation of management resources (capital investment, personnel allocation)

Major Strategy

2018

2030

Establishing solid
corporate quality

Medium- to
Long-term Vision

Creating Innovation• Promote innovation activities to create new
businesses and major new products• Deepen core technologies and create new technologies• New market development and business promotion
for contribution to SDGs and sustainable society• Improve Company-wide productivity achieve business
transformations with the participation of all employees

14

Nichiban Group Integrated Report 2023

Active use of AI and IoT to promote business strategies

Corporate model

Contributing to asustainable society~SHINKA·HENKAKU~Developing human capital for sustainable future growth

Global Expansion• E stablish overseas bases (production, sales,
logistics) covering major regions, establish
structures for overseas expansion strategies

4• Strategic use of data: Strategic use of information (data) to achieve business objectives• Business process transformation: Business process transformation to generate added value for the business• Responding to changes in the business environment: Flexible response to future changes in the businessenvironment and risk reduction

5• Developing human resources for future sustainable growth• Strengthening professional skills• Developing the next generation of management• P romote global product strategies and establish
brands• P roactively recruit local human resources

Nichiban Group Integrated Report 2023

15

Message from the Financial Officer

Message from the Financial Officer
We will continue to invest while maintaining
financial discipline, as we consider expansion of new
business and overseas business, the key themes of themedium-term management plan, to be our future
growth drivers.

Hironori Sakai
Executive Director

Please review the consolidated results for the fiscal
year ended March 2023.
For the fiscal year ended March 2023, we posted higher revenues but adecline in operating income, with net sales of ¥45,560 million (up 5.6%
year on year), operating income of ¥1,609 million (down 34.3%),
ordinary income of ¥1,748 million (down 31.8%), and net income
attributable to owners of parent of ¥2,731 million (up 31.0%). Sales ofsuch mainstay products as CARELEAVES™ and the ROIHI series grewsteadily thanks to strengthening capabilities of our EC business and arecovery in inbound demand. In addition, our overseas business grew inboth Asia and Europe thanks in part to a weaker yen, and the ratio ofoverseas sales reached 10.1% (8.1% in the previous fiscal year).
In terms of profit, however, the main drivers of the significant drop
in operating income were the sharp rises in raw material and energy
prices as well as higher foreign currency-denominated procurement costs
caused by the yen’s depreciation. These led to a substantial deteriorationin the cost of goods sold ratio. These factors had a particularly big impact
on industrial and stationery tape products in general, while the effects ofour price revisions are still in the emerging stages. Net income rosemarkedly due to booking a gain on the sale of land previously occupiedby the former Osaka Factory in Japan, as initially planned.

Please look back on Nichiban’s earnings andfinancial position to date.
Four years have elapsed since the start of the current medium-term
management plan (five-year) in the fiscal year ended March 2020. Bothsales and profits are expected to fall short of the initial plan due to weakearnings caused by the COVID-19 pandemic and higher costs, which we
had not anticipated at the time the plan was formulated. The ROIHI
series, which is a key earnings driver and popular in South Korea andother countries, was particularly affected by the contraction in inbound16

Nichiban Group Integrated Report 2023

demand. The industrial and stationery tape business also faceda challenging situation due to the timing of investments for renewalof aging facilities and environmental measures (e.g., desolventization),compounded by soaring raw material and energy prices and the impact
of production volume adjustments due to shortages of semiconductors.
As such, the downturn in earnings is largely attributable to external
factors. That said, we have been unable to change our profit structure at
the level of innovation, which is still dependent on our existing mainstay
products. We recognize that transforming our business portfolio remains
an issue for the future. On a brighter note, the overseas business, whichis positioned as a growth engine for the medium to long term, has been
growing steadily as its bases in Thailand and Germany are on track.
In financial terms, in line with our initial plan, we have proactively
invested in growth and made environmental investments in anticipationof the future, as well as in maintaining our production capacity andreplacing our enterprise systems. Although total assets are on an
increasing trend, due in part to the need to secure inventory as acontingency for supply chain disruptions, cash flows from investing

activities are within the scope of cash flows from operating activities, andour equity ratio is stable at around 60%. We view our strong financialbase and high level of liquidity on hand as a driving force for sustainablegrowth. However, ROE, which is a measure of capital efficiency, hasremained weak due to slow growth in net income, and we have notachieved our target of 10%.

of materials due to economic recession and supply chain disruptions.
Looking ahead, we may have to pay attention to the risk of impairment
losses on goodwill associated with M&A and on expanded production
facilities and other assets. Our aim is to maintain financial soundness
while making appropriate investment decisions and practicing prudent
risk management.

Please share Nichiban Group’s financial policy andyour views on financial risks.

What are the consolidated forecasts and underlying
assumptions for the fiscal year ending March 2024?

We will continue to invest in growth areas such as medical products,
digital transformation (DX) investment to improve productivity and utilize
data, and environmental investment to reduce the use of solvents, aswell as to achieve the strategies of “Creating Innovation” and “Global
Expansion” as stated in our medium- to long-term vision. In particular,
we are considering capital and business alliances, including M&A withlocal partners to expand our overseas business, as we will need not only
sales but also production and distribution bases.
Let me add that, our financial policy, which has held up undervarious challenges since our founding, is based on maintaining a solid
financial foundation, and we intend to invest while adhering to a set
level of financial discipline, such as ensuring an appropriate equity ratio
and liquidity. We also focus on capital efficiency. In addition to continuing
to enhance shareholder returns, we aim to improve ROE through profit
growth based on sales growth and improvement of operating margin
ratio as KPIs. Therefore, while price revisions to cope with rising raw
materials costs and the growth of high-margin medical products will
support the improvement in profitability for the near term, we believe
new businesses and expansion of overseas businesses will be importantearnings drivers in the medium to long term.
As for financial risks, the downside risk to Nichiban’s earnings isrelatively limited due to the fact that our products are mainly necessities
for daily life. Nonetheless, as with other manufacturers, we need tomonitor the impact of sharp cost hikes and exchange rate fluctuations,as well as concerns about obstacles to debt collection and procurement

We are forecasting an increase in both sales and operating income forthe fiscal year ending March 2024, with net sales of ¥47,000 million (up3.2% year on year), operating income of ¥2,800 million (up 74.0%),
ordinary income of ¥2,900 million (up 65.9%), and net income
attributable to owners of parent of ¥2,100 million (down 11.4%).
We expect sales growth to be driven by continued expansion in thehealthcare products business due to increased inbound demand, an
ongoing shift to EC business, a recovery in the industrial products sector,
and expansion of overseas business. On the profit front, although raw
material prices are expected to remain high, we are projecting an upturnin operating income by as the sales price revisions from the previous
fiscal year gain further traction.

Cash flows from operating and investing activities and cash andcash equivalents

Net sales and operating income margin
Net sales (Millions of yen)

Cash flows from operating activities (Millions of yen)

Operating income margin (%)

Cash flows from investing activities (Millions of yen)

47,4177.8

44,063

41,52843,13445,560Cash and cash equivalents (Millions of yen)

47,000Nichiban’s policy is to continue to pay dividends linked to businessperformance, with a target payout ratio of about 25% (consolidated),
based on the premise of delivering stable dividend payments.
Despite the impact of an unexpectedly high cost of sales, we paid anannual dividend of ¥35 per share (payout ratio of 30.5%) for the fiscal
year ended March 2023, as initially planned. For the fiscal year ending
March 2024, we plan to pay an annual dividend of ¥35 per share(payout ratio of 34.5%), the same as the previous fiscal year.

Equity ratio and ROE
Equity ratio (%)

13,344

13,844

14,752

ROE (%)

11,273
60.5

7,822

6.8
6.0

5.7

Please explain Nichiban’s thinking with regard toshareholder returns.

5,584

5,749

5,911
4,064

4.8

62.3

62.2

60.5

58.7

9.2
2,917
6.0

3.5

4.8

4.7
3.6

-1,153-1,380

2018

2019

2020

2021

2022

2023
(Forecast)(FY)-4,74320182019-3,067-2,898

2020

2021

2022

2019
(FY)

2020

2021

2022

2023
(Forecast)(FY)

Nichiban Group Integrated Report 2023

17

Business Strategies

Business Strategies—Research and Development

Research and Development
Sticking to your needs

Building on the Nichiban Group’s strength in adhesive
technology, we will contribute to a sustainable society andcomfortable lifestyles through the development of technologies
and products that help solve environmental and social issues.

Kazuhisa Okai
Senior Operating Officer
General Manager of Research and Development Division

R&D Policy
The Nichiban Group’s core adhesive technology is required to perform
various functions depending on the application and purpose, such as
appropriate adhesive strength, weather resistance, ease of application
and removal, moisture permeability, and low-irritant properties.
Nichiban’s products are manufactured by combining technologies it
has cultivated over many years, including optimal adhesive design,

selection and fine-tuning of base materials such as films, coating
technologies, and peeling agents and other material technologies.
To contribute to people’s comfortable living on an ongoing basis,
Nichiban will continue to develop and provide high-performance,high-value-added products and take on challenges in new domains.

R&D Flow to Speed Up Processes

B2B & B2C
Manifested problems at the front lines

Speed

Entry into
new business domains
Root cause

Verification of solutions
to problems

Customers’ “silent voices” and “common problems”

Turning ideas to reality
Marketing-driven
product development

Framework for early realization of ideas

Establishment of a theme promotion process to speed up R&D

Utilization of Nichiban’s technology

Nichiban Group Integrated Report 2023

F ormulation of Development Standards that Contribute toSolving Environmental and Social Issues
The Nichiban Group incorporates points of view that contribute to solving
environmental and social issues from the R&D phases. Being mindfulof contributions to the SDGs in the R&D flow leads to the creation of
products with low environmental impact over their entire life cycle since
the environmental impact of a product is determined by its design.
Furthermore, we believe discovering new product ideas in the quest forsolutions to environmental and social issues will contribute to thecreation of a sustainable society. Although these initiatives are unlikely
to yield immediate results, they help us fulfill our responsibility asa manufacturer and marketer of products to realize our vision for the
future. They are also to enable our future customers to choosesustainable products.

 romoting Eco-conscious Development Themes and New
P
Product Development
The Nichiban Group searches for development themes in the pursuit not
only of marketability but also of contribution to environmental and social
issues. We also evaluate the environmental impact of products it hasdeveloped over their entire life cycle, while managing raw materials by
visualizing data on chemical substance content in raw materials andconsideration for depleting resources.
Furthermore, to achieve Nichiban’s target for reducing CO₂
emissions by fiscal 2030, the development organization has participatedin the Sustainability Committee since fiscal 2022. We have also launched
an initiative to develop new products based on eco-friendly
manufacturing methods with the research and production departments
working in unison. The internal Standardization Committee strives forsustainable product development by scrutinizing the R&D flow with an
SDGs lens in all processes from idea discovery, planning, product design,
process design, production, sales, and disposal.

Creating Innovation
Solving social issues

18

Product Development that Contributes to Solving Environmental and Social Issues

Collaboration with Start-ups
We have set “creating innovation” as a focal theme of our medium-term
management plan “ISHIZUE (foundation) 2023 ~SHINKA (evolution/
deepening)·HENKAKU (reform)~.” We participated in collaboration
programs with start-ups in Japan and abroad to explore “N-to-N”
collaboration opportunities (rather than traditional one-to-one
relationships) with start-ups and major corporate partners as well as tofoster and nurture a culture of innovation within the Nichiban Group.
We aim to create new businesses through partnerships andcollaborations with start-ups that possess cutting-edge technologies andinnovative business models that lead to the creation of new value.

Group Internal Proposal System
The Nichiban Group’s internal proposal system was re-launched as“NBrain” in November 2020 adding significant upgrades aimed atdeveloping a customer perspective and improving employee
engagement. NBrain consists of “product proposals,” in which proposals
are made from the workflow system, and an “idea farm,” a forum forexchanging opinions using the in-house social media. Although no new
NBrain products have been developed yet, the system not only raises theawareness of the importance of development among all employees, butalso contributes to the exchange of knowledge and wisdom through the
dynamic exchange of opinions.

Intellectual Capital Initiatives
The Nichiban Group utilizes technologies cultivated through its R&D tocreate a variety of “people-friendly” and “eco-friendly” adhesive products.
Intellectual property is becoming increasingly vital as we move forwardwith the creation of new value. We are building a structure to support
R&D based on the creation of innovations in collaboration with othercompanies. In addition, we promote the acquisition and maintenance ofintellectual property rights. This is done to protect its products andtechnologies and secure profits and is positioned as a key factor insupporting its sustainable growth toward a strong company. We will also
continue to educate our employees on intellectual property and acquire
intellectual property in accordance with our overseas expansion.

Utilization of external resources

Nichiban Group Integrated Report 2023

19

Business Strategies

Business Strategies—Domestic Business

Domestic BusinessWe will create innovations through the roll-out of“development collaboration linked businesses,” and throughthe growth of human resources and organizations based onpractical application, realization, sharing, and empathy, we willrealize social contribution, which is the true added value.

Consumer
We will continue contributing to comfortable and convenient
lifestyles by creating new value and providing safe andreliable products through the strengthening of businessactivities and speedy implementation of strategies based ona customer focus.

Hideaki Hara
Director, Managing Officer
General Manager of Domestic Business Division

Satoshi Fujikawa
Senior Operating Officer
General Manager of Consumer Sales Division

Even though it dramatically changed the economic and social climate,
we view the COVID-19 pandemic as a phase in which the entire
Nichiban Group was able to share a sense of mission to contribute tosociety. We were able to share anew the awareness that the NichibanGroup has been operating businesses that contribute to society andrealize the growth of our human resources and organization. Some
examples of how we were able to accomplish this were activities topromote the environmental appeal of our products through cellulose
tape, the pursuit of hygienic and safe healthcare through our medical

products, and working to ensure a stable supply of products. In fiscal
2023, we consider the cellophane business (cellulose tape), plasterbusiness (CARELEAVES™), and pain relief anti-inflammatory patch
business (ROIHI-TSUBOKO™) as priority brand businesses, and willachieve true added value and social contribution by expanding on“development collaboration linked businesses” backed by digitalmarketing analysis, technological innovation,and evidence.

Organizational Structure of the Domestic Business Division

Domestic Business Division

The Consumer Sales Division is based on three fields: the Healthcare
Product field, which covers medical products under brands such as
CARELEAVES™, ROIHI-TSUBOKO™, and battlewin™; the Office Home
Product field, which covers tape products under brands such as
cellulose tape, NICETACK™, and Waza-Ari™ Tape; and the EC field,
which covers both products through e-commerce and catalog sales.
Through these fields, we are working every day to contribute to the
comfortable and convenient lives of our customers.
Although the pandemic created rigorous market conditions in fiscal
2022, sales were 106% of the previous year’s level, with growth driven
by promoting new initiatives and taking on new challenges, particularly
in brand strategy and response to digital transformation (DX).

Fiscal 2023 has been called a year of further changes in society
as the start of the “the new normal” era after the pandemic. It is also
expected to be a year in which people will be as active as before, withvarious events and functions resuming while inbound tourism revives
with an increase in the number of overseas visitors.
To address this major social change, the Consumer Sales Division
will take on the challenge of new activities by utilizing digitalmarketing with a focus on brand strategy. Through these three fields,
we will continue our initiatives to make Nichiban products available toas many customers as we can.

Consumer Sales Division
Healthcare
Product SalesManagement
Department

EC SalesManagement
Department

Office Home
Product SalesManagement
Department

Hospital Product
Sales
Management
Department

Industrial Product
Sales
Management
Department

Cellulose tape

Brand Marketing Department

The Domestic Business Division is responsible for product sales andoversight in the Japanese market. Reporting to the division are theConsumer Sales Division (Healthcare Product Sales Management
Department, EC Sales Management Department, Office Home Product
Sales Management Department) handling B2C businesses and the20

Nichiban Group Integrated Report 2023

Product Development Department

Hospital Product Sales Management Department and Industrial Product
Sales Management Department handling B2B businesses. The Brand
Marketing Department undertakes product brand strategy, and theProduct Development Department is responsible for product development
based on customer needs.

NICETACK™

CARELEAVES™

Dear Kitchen™
WAZA-ARI™ Tape

CARELEAVES™ Hydrocolloid

battlewin™
Taping Tape

ROIHI-TSUBOKO™

SKINERGATE™

Nichiban Group Integrated Report 2023

21

Business Strategies—Domestic Business

Domestic Business
Consumer
Healthcare ProductFiscal 2022 Results and Fiscal 2023 Plan
In fiscal 2022, expectations for online shopping, which involves less human contact, remained
high as the pandemic continued and demand for office products remained sluggish.
Sales increased over the previous year due to strengthened online marketing for thispurchasing behavior and improvements to the shopping pages to make it easier for customers
to choose and understand.
In fiscal 2023, we will continue to pursue digital promotions to further expand sales, and inparticular, we will speedily implement initiatives to increase medical product sales.

For the OTC drug market, Healthcare Product field offers the high-performance, first-aid adhesive bandage
brand CARELEAVES™ and the ROIHI-TSUBOKO™ series of pain relief anti-inflammatory patch as well as
surgical tapes, dressings, and other hygienic materials.
For sports scenes, Nichiban offers a wide variety of taping products suited to various situations fromdiverse perspectives in its battlewin™ series of sports tapes. We deliver safe and reliable quality to ourcustomers through the sale of these high value-added products with strong brand recognition.
Business field sales trends

Strengths of the Business
The EC field’s strength lies in understanding
market trends by taking advantage of handling
all Nichiban products. Additionally, we create
optimal buying opportunities by incorporating
information centered on customer feedback as itis required.

Business field sales composition ratio(Billions of yen)

14.6

13.0
11.0

2018

2019

2020

11.6

2021

Healthcare
Product

12.5

27.4%

2022

(FY)

Fiscal 2022 Results and Fiscal 2023 Plan
In fiscal 2022, we achieved our annual sales target, partly due to the development ofpromotions to celebrate the 25th anniversary since the launch of CARELEAVES™ and increased
inbound demand for ROIHI-TSUBOKO™, due to the rise in the number of foreign visitors
to Japan.
In fiscal 2023, centering on our three flagship brands of CARELEAVES™, ROIHI-TSUBOKO™,
and battlewin™, we will evolve and transform our Healthcare Product field and achievesustained growth through bolstering our customer-driven business activities, speedy executionof strategies, and by taking on the challenges of growth fields.

Strengths of the Business

Office Home ProductOperating in the stationery and office supplies market, the Office Home field has products, such as cellulose
tape and NICETACK™ double-sided adhesive tape, that have long been customer staples in offices andhomes. While office demand is sluggish due to continued remote working in the pandemic, Nichiban is
striving to increase awareness of the Dear Kitchen™ brand, a home-use product.
We have also begun to address environmental and SDG-related issues through cellulose tape. We willcontinue to contribute to society through our eco-friendly products.
Business field sales trends

Nichiban’s Healthcare Product field is rooted on thequality of products that fit even the user’s feelings.
In the development, manufacturing, and sales of our
products, we pay close attention to the materials andthe fit of the products, and our desire to deliver evenan intrinsic thoughtfulness is reflected in our products.

Business field sales composition ratio(Billions of yen)

9.4

8.9

8.9
5.2*

5.2
Office Home
Product

2018

2019

2020

2021

2022

11.4%

(FY)

* To aggressively expand EC sales, including cross-border EC, we spun off the EC Special Sales Department, which was under the Office Home Sales Management Department (formerly the Tape Business Division),and established the EC Sales Management Department in April 2021.

EC

Fiscal 2022 Results and Fiscal 2023 Plan
Sales in the stationery and office supplies market in fiscal 2022 declined from theprevious year owing to the significant impact of slow demand. Although we
implemented price revisions for stationery products including cellulose tape, thebusiness was also affected by soaring raw material prices. From fiscal 2023 onward, we
will promote digital marketing and encourage product usage scenarios while speedilydeveloping products for the household sundries route.

The EC field’s main business is mail-order and online sales, and we offer a wide range of products for all tapeand medical products. In the mail-order business, as the shift from print to online sales continues, we arefocusing on expanding items on our website and improving product pages.
In our Internet business, we continue to support comfortable lifestyles by creating shopping
experiences where customers can purchase products anytime, anywhere, and by enhancing the optimal
buying places for easy purchase and delivery of our products to more customers.
Business field sales trends

Fiscal 2022

4.1
3.7*
EC

9.0%
2019

Centering on those for cellulose tape, which has beena customer favorite, the Office and Home field features
a myriad of distribution channels, including major
supermarkets and DIY centers, convenience stores,
and stationery specialty stores.

Business field sales composition ratio(Billions of yen)

2018

Strengths of the Business

2020

2021

2022

Topics: Consumer

A version for thumbs was launched in fiscal 2022 as a new series of battlewin™ Finger
Protector. As a sports tape that can be easily and quickly applied and firmly fixed, thisproduct is very useful not only in sports but also in daily life.

(FY)* To aggressively expand EC sales, including cross-border EC, we spun off the EC Special Sales Department, which was under the Office Home Sales Management Department (formerly the Tape Business Division),and established the EC Sales Management Department in April 2021.

22

Nichiban Group Integrated Report 2023

Nichiban Group Integrated Report 2023

23

Business Strategies—Domestic Business

Domestic Business
Hospital ProductIndustrial Product

The Hospital Product field is working to achieve a sustainable society through medical care. We contribute to
the improvement of patients’ quality of life through prevention of infection with our hemostatic bandages
and dressings used when administering vaccinations, and through our surgical tapes and post-operative
total care series that are gentle on the skin and feature low-irritation. In the medical field, we will continue
to pursue reliable quality in consideration of medical safety and work efficiency to contribute to theestablishment of a sustainable medical system.
In the home healthcare field, we will contribute to the development of community healthcare byproviding products that help prevent bedsores and provide care for pressure ulcers. We will continue to workon value-added product proposals and product development that are empathized with and are appreciatedby patients and medical professionals.

The Industrial Product field proposes and provides a wide array of original products by utilizing the adhesive
technology we have cultivated to date. This began with various types of adhesive tape for packaging, where
the full potential of adhesive tape is expressed. In the food packaging field in particular, Nichiban was among
the first to propose and provide vegetable binding tape, in addition to cellulose tape, thereby helping to
improve the efficiency of the distribution site.
Furthermore, our masking tapes for painting used in the manufacturing of industrial products havecontributed to the stabilization of quality at those various work sites. In addition to packaging and coating
applications, where adhesive tapes have traditionally been in high demand, Nichiban has been and willcontinue to work with users to create, propose, and provide products that demonstrate the superior
adhesive functions and that can be used “safely” and “conveniently” by users.

Strengths of the Business
The Hospital Product field offers a wide range of products for hemostasis with low irritationand superior workability. We provide them to blood sample collection rooms and blood
centers in hospitals for use in covering protection after removal of injection needles.
The post-operative total care series is gaining recognition in the obstetrics andgynecology field and will be expanded to the surgical field to contribute to improving
patient quality of life. The low-irritation adhesive technology will also be utilized in thehome healthcare market in the future.

Business field sales trends(Billions of yen)

5.8

2018

Fiscal 2022 Results and Fiscal 2023 Plan
In fiscal 2022, sales of Cesablic™, a series of hemostatic products, fell year on year due
to a decrease in the number of vaccinations versus the previous year. On the other hand,sales of the post-operative total care series Ascablic™ and the dressing material
CATHEREEPLUS™ both increased year on year due to expanding brand recognition,
resulting in higher sales for the field as a whole.
In fiscal 2023, we will continue to address important sustainability issues in
hospital fields. We aim to be a company that continues to contribute to healthcare byconsistently providing new value toward solving issues such as the declining birthrate
and aging population and workstyle reform in the medical industry.

Fiscal 2022

Hospital
Product

13.2%

Topics: Hospital ProductNichiban Group Integrated Report 2023

2019

5.5

2020

5.8

2021

6.0

2022

Business field sales composition ratio

In January 2023, we launched CATHEREEPLUS™ ECHO. This product is the only film
dressing material in Japan that can be used for ultrasound-guided puncture.
The adoption of ultrasound when administering intravenous needles not only
reduces failed punctures and patient discomfort, but also increases the success rate ofpuncture, which in turn eases the psychological burden on the medical professional.
CATHEREEPLUS™ ECHO, which enables a series of clean operations through theuse of ultrasound, is a highly valuable product that makes a total contribution to
improving the quality of life of patients, infection prevention measures, and the work
efficiency of medical professionals.

24

5.7

Strengths of the BusinessIn the Industrial Product field, cellulose tape, which is made primarily from natural
materials, has been popular with companies as a product that can be used forcustomized printing with eco-friendly messages and the company names due to its
unique features. Also, masking tapes used for painting during assembling or repairing
vehicles have long been used by many auto companies and repair companies.

Business field sales trends(Billions of yen)

14.3

13.3

13.1

13.3 13.2

2019

2020

2021

(FY)

Fiscal 2022 Results and Fiscal 2023 Plan
Price revisions were a major issue for the Industrial Product field in fiscal 2022. Although
three price revisions were implemented in fiscal 2022, triggered by soaring raw material
prices and supply concerns, they were implemented as planned, thanks to theunderstanding of many of our customers.
As a result, sales in the Industrial Product field in fiscal 2022 were 98% of theprevious year’s level, despite the significant impact from discontinuation of someheat-resistant masking tapes.
After the price revisions in fiscal 2022, the Industrial Product field in fiscal 2023
will concentrate on building a new business foundation by focusing on new productcultivation and creation.

Fiscal 2022

2018

2022

(FY)

Business field sales composition ratio
Industrial Product28.9%

Topics: Industrial ProductIn the Industrial Product field, we have been promoting“Cellulose Tape Small Action for the Future” since fiscal 2020,
mainly among domestic distributors. This program aims to
reduce CO₂ emissions during incineration of cellulose tape,which is made mainly from natural raw materials. We arepleased to note that as of March 31, 2023, 117 companies andorganizations had expressed their support for this program.

Nichiban Group Integrated Report 2023

25

Business Strategies

Business Strategies—Overseas Business

Overseas BusinessTo achieve our medium- and long-term vision“NICHIBAN GROUP 2030 VISION”, we will deliver NICHIBAN quality
to all people worldwide while considering local needs.

Priority Measures(1) Initiatives aimed at sustainable growth
The Overseas Business Division will expand its four priority products(CARELEAVES™, Cesablic™, Washi Masking Tape, and Panfix™ cellulosetape) and focus on three products for expansion (CATHEREEPLUS™,
Ascablic™, and ROIHI-TSUBOKO™) to develop high-quality products thatare tailored to local needs.
In the division’s sales structure, Nichiban Co. Ltd.’s headquarters
Overseas Sales Department, NICHIBAN (THAILAND) CO., LTD., and
NICHIBAN EUROPE GmbH will conduct sales activities closely tied to theirlocal markets.

Satoru Ito(3) Sales activities suitable for society’s new normal
The Overseas Business Division will effectively execute real and online
business negotiations by transitioning to the “with-COVID” era to deepenties with local customers (users and sales agents). We will establish acycle of sales channel expansion, new route acquisition, gathering local
needs, and exploring new market by implementing a combination ofevidence-based awareness activities and push-pull-type sales.

Managing Officer
Overseas Business Division

Business field sales trends

Business field sales composition ratio(Billions of yen)

4.6
3.2

2018

3.1

2019

Overseas

10.1%

3.5

2020

2021

2022

(FY)

Fiscal 2022 Results and Fiscal 2023 Plan
In fiscal 2022, the transition to a “with-COVID” era led to a significant
recovery in event demand in Europe, and CARELEAVES™ sales for South
Korea were robust. Additionally, we implemented price revisions fortape products, which sparked a temporary upturn in demand prior to
the revision.
Sales composition ratio by area
In addition to these factors,
North America 3% Others 1%
yen depreciation had a positive
Oceania 5%
impact, resulting in net sales of¥4.6 billion, up 32% from theprevious fiscal year. In fiscal 2023,
Europewe will continue to build aAsia
34%
structure for sustainable growth57%
and develop sales activities suited
to the new normal in society bycapturing local needs.

Nichiban Group Integrated Report 2023

Conference for medical materials sales agents in China

2.9

Market Environment, Opportunities and Risks
Overseas markets have been hit by affected by ongoing global inflation,
semiconductor shortages, and the zero-COVID policy in China. Despite
this, the markets continue to recover from the global demand slump
caused by the COVID-19 pandemic due to the transition to a “with-

26

Medical material trade show in Thailand

COVID” era. Further growth will be achieved mainly through high-valueadded products such as CARELEAVES™, a high-performance first-aid
adhesive bandage, Cesablic™, a hemostatic series, and Washi Masking
Tape made from traditional Japanese paper for painting.

EuropeEast Asia
China, South Korea
Central Asia
Base location: Dusseldorf, Germany(2) Contribution to the environment and society throughoverseas business
The Overseas Business Division will contribute to a sustainable society byworking to achieve the SDGs through sales of Panfix™ cellulose tape(cellophane adhesive tape for overseas markets) made of natural raw
materials, building on the Chain of Custody (CoC) certification of theForest Stewardship Council (FSC®) acquired last year. We will also
promote sales of medical products by strengthening compliance withpharmaceutical regulations in various countries.

Speedy Development and Expansion of Global Markets
Strengthening collaborative activities with partners and creating
buying opportunities
To achieve growth in key overseas regions, we are vigorously promoting
activities in collaboration with our strategic partners.
In South Korea and Taiwan, CARELEAVES™ continues to growsignificantly as we work with local distributors to expand sales channels
and aggressively promote the product to users. In addition, we plan to
introduce Washi Masking Tape in China, a massive market, to address
local needs.

Celebrating its fifth anniversary, NICHIBAN (THAILAND) is
strengthening its initiatives in the Indonesian market and launchingan EC shop as a new marketplace in Thailand, which is yielding
positive results.
NICHIBAN EUROPE in Germany, now in its second year ofoperation, also actively engaged in collaborative activities with partners
in Germany and the Netherlands, and achieved significant growth inboth tape and medical products.
T oward further growth
Human resources support our growth. Based on our corporate
philosophy, we will focus on creating a better organization so that ourmembers at the three bases can maximize their potential.
We will also actively consider business alliances and M&A toexpand our sales, production, and distribution bases to achievesustainable and substantial growth.

Base location: Tokyo, Japan

Southeast Asia
Middle East

MEDICA World Trade Fair for Medical Devices in Germany

Base location: Bangkok, Thailand

Oceania

Event to celebrate NICHIBAN (THAILAND)’s fifth anniversary

Nichiban Group Integrated Report 2023

27

Nichiban Group Sustainability

Nichiban Group Sustainability

Nichiban Group Sustainability
Identification of Materiality• Management of carbon dioxide (CO₂) emission reduction
targets and initiatives• Disclosure of information based on Task Force on Climaterelated Financial Disclosures (TCFD) recommendations• Roll-out of health and productivity management policy• Roll-out of human rights and purchasing policies• Development of a sustainable R&D flow

● Measures to counter climate change and global warming● Developing products that contribute to solving environmental and social issues● Contributing to combating the spread of infectious diseases● Improving product quality and ensure safety● Contributing to local communities and society● Appropriate management of chemical substances● Construction for resource depletion● Corporate governance● Compliance● Risk management● Information security● Addressing occupational health and safety as well as employee health● Global expansion● Creating innovation

Importance to the Nichiban Group
Important

Very important

Materiality Identification Process

Management
From fiscal 2022, Nichiban has newly formulated a Human
Rights Policy, a Health and Productivity Management Policy,
and a Purchasing Policy which are related to sustainability
and the SDGs.
These include various measures targeted not only atsociety but also at the attainment of the health andhappiness of Nichiban Group employees.

● Biodiversity conservation● Promoting diversity and inclusion andfostering human resources● Reduction of environmental impact● Strengthening supply chain management

Click here for more information on policies of sustainability initiatives
https://www.nichiban.com/corp/sustainability/sustainability/#anc1
Nichiban Group Ethics, Nichiban Group Human Rights Policy, Nichiban Group
Health and Productivity Management Policy, Nichiban Group Quality Assurance,
Nichiban Group Environmental Policy, Nichiban Group Crisis Management Policy,
Nichiban Group IT Security Policy, Green Procurement Guidelines

Based on the concept of sustainability, we have identified
themes that are particularly critical for management toachieve the “NICHIBAN GROUP 2030 VISION” in three steps.
These themes are chosen based on the Nichiban Groupvalue chain, being mindful of their importance in ourbusinesses as well as of the requirements and expectationsof society.

1

Very highSignificant Matters Considered by
the Sustainability Committee

Important

To live up to the expectations of its stakeholders andthe requirements of society, the Nichiban Group has
established a Sustainability Committee, chaired by the
Director in charge of CSR, to review and deliberate on basic
policies, material issues, risks, and opportunities related tosustainability. Agenda items covered by the Sustainability
Committee are reported to the Board of Directors once per
year, while the Board of Directors provides oversight anddirection. Business continuity risks attributable to climatechange that have been identified by the Sustainability
Committee are reviewed at the BCP Committee for specificcountermeasures.

Importance to stakeholders

Promotion Structure

Very important

Extremely
important● Environment ● Society ● Governance ● Business and innovation

Extremely highsolving environmental and social issues, contribution to
infection prevention measures, and improvement of
product quality and assurance of safety as exceptionally
important for both stakeholders and the Nichiban Group.

Material issues impacted by the Nichiban Group businessactivities were reorganized and mapped along withmaterial issues for stakeholders. As a result, we havepositioned measures to combat climate change and global
warming, development of products that contribute toHighhappy, and then connecting that happiness to all
stakeholders. Sustainability in the Nichiban Group is built
on the realization of a philosophy that has been passed
down continuously since its founding.

The Nichiban Group Philosophy is, “Nichiban respects
people’s cooperative relationships and strives to foster
prosperity and happiness for all stakeholders of NichibanGroup.” Underlying this philosophy is the concept of firstcreating an environment in which employees can feel

Impact on society

Basic Concept

Extremely important

Extraction of issues
Initial evaluation items for social issues were extracted based on evaluation items
and various guidelines from SDGs and ESG evaluation agencies.

Selection of important themes that need to be addressed by the Nichiban Group2

3

Management including directors, auditors, and executive officers from related
departments evaluate important issues for the Nichiban Group. Important themesthat need to be addressed by the Nichiban Group are selected.

Inhouse approval
The Management Strategy Committee and the Board of Directors deliberate andgive approval.

Target KPIs and Actual Results
TopicsMateriality

Environment

Developing products that contribute to solving
environmental and social issues

Reduction of environmental impact

Tangible action points• Formulation of development criteria for products that contribute to solving environmental
and social issues• Promote environmentally friendly development themes and new product development• Contribute to further environmental issues by increasing the proportion of natural materials
in products• Continued operation of ISO 14001 environmental management system and implementationof audits• Reduction of solvent usage through creation of new technologies• Disclosure of environmental information

Actual results for fiscal 2022

• Conducted a survey of energy use within internal processes
as one of the indicators applicable to product development
standards• Engaged in ongoing ISO 14001 certifications, raised the level ofenvironmental awareness among all employees and internal
auditors, and maintained efforts to improve environmental
management system.
• Promoted efforts to reduce solvent use• Actual energy consumed: 5.14 million TJ of calorific value (516
TJ in fiscal 2021)• Scope 1 and 2 CO₂ emissions: 20,710 tons of CO₂ (22,620 tonsof CO₂ in fiscal 2021)

Targets for fiscal 2023

Relevant SDGs

• Establish calculation method for product CO₂ emissions  Promote development themes that address environmental
and social issues• Maintain ISO 14001 certification and improve the leveland quality of management• Eliminate solvent use in current products• Reduce energy consumption during production• Publish Nichiban Group Integrated Report 2023 (Japaneseand English languages)* Figures exclude amount equivalent to Green Power Certificates• Acquired FSC® certification

Appropriate management of chemical substances

28

Nichiban Group Integrated Report 2023

Promote green procurement of raw materials•M aintained appropriate procurement management based on
the Nichiban Group Green Procurement Guidelines• C ontinued to appropriately respond to requests for external
investigation of chemical substances contained Nichiban products• Ongoing promotion of green procurement and response torequests from customers to investigate chemical
substances contained in products

Nichiban Group Integrated Report 2023

29

Nichiban Group Sustainability

Materiality

Actual results for fiscal 2022

Targets for fiscal 2023

• Disclose information based on the recommendations of
the Task Force on Climate-related Financial Disclosures(TCFD) and the results of Scope 1, 2, and 3 calculations in
the June 2023 Corporate Governance Report

Measures to counter climate change and global warming• Reducing CO₂ emissions across the Nichiban Group• Increasing the ratio of green electricity and install solar power generation facilities

Consideration for resource depletion• Reduction of waste through effective use of raw materials• Efficient use of water and management of wastewater treatment• Conversion from thermal recycling to recycling• Continued to achieve “zero emissions” by recycling more than
99% of waste• Water consumption: 687,000 m³ (2% reduction from fiscal 2021)• Launched search for product scrap recycling technologies• Maintain zero-emission plants• Water input → 2% reduction year-on-year• Explore recycling technologies

Biodiversity conservation• Makishin ECO Project tree-planting activities and Gounogawa “forest drop”
conservation activities• Conducted the 13th Nichiban Tape Core ECO Project• Oxygen fixed through afforestation activities: Estimated at
532–937 tons of CO₂/year• Continue implementation of the Nichiban Tape Core ECO
Project, improve contribution and engagement with NGOs

Improving product quality and ensure safety• Continuing operation of ISO 9001 quality management system and implementationof audits• Improving customer satisfaction• Begin introducing new core systems for strategic data utilization and improved
internal business productivity• Promoting company-wide improvement activities• Engaged in ongoing ISO 14001 certifications, and maintained
efforts to improve design quality, manufacturing quality, andcustomer satisfaction• New backbone system: Introduced at Nichiban, three domestic
Group companies, and one overseas Group company topromote operational standardization• Teams engaged in production improvement activities: 55• Maintaining ISO 9001 and improve management leveland quality• Conducting CS surveys• Realizing internal operational efficiency improvement
using the new core system and confirmation of theeffectiveness overview document• Promoting the use of advanced marketing data insales measures• Promoting efficiency, waste reduction and energy
conservation in company-wide improvement activities

Addressing occupational health and safety as well as
employee health

Promoting health and productivity management[Policy 1] P revent the occurrence and severity of diseases such as lifestyle-relateddiseases[Policy 2] P revent the occurrence of stress-related diseases such as mental healthproblems[Policy 3] Raise health awareness[Policy 4] Establish an environment to promote health management• Formulated the Nichiban Group Health Management Policy
and promotion structure, compiled and disclosed issues basedon action guidelines• Certified as a 2023 Japanese Health and Productivity
Management Outstanding Organization

Promoting diversity and inclusion and fostering
human resources• Promoting women's activities and employment of people with disabilities• Promoting initiatives to improve engagement and strengthen organizational
management• Redeveloping of the medium-term human resources development system andimprovement of necessary skills using the technical skills map• Pursued initiatives under the 2nd Action Plan (April 2019–
April 2024) aimed at promoting the active participationof women• Introduced staggered commuting and telecommuting systems• Maintained efforts aimed at revamping “Steps” workplaces forpeople with disabilities• Female manager ratio: 10.8% (non-consolidated)• Used a technical skills map to clarify skills required in eachdivision to achieve the medium- to long-term vision, andprovided training to enhance skills• Implemented a project to improve workplace engagement• Realize and maintain the legally stipulated employment
rate of persons with disabilities• Creating a workplace that grows together with people
with disabilities• At least 10% of management positions occupied
by women• Engagement rating score of 50.0 (B)• Ensuring the implementation of the technical skills map

Strengthening supply chain management• Strengthening engagement with raw material sources and suppliers (human rights
and environmental issues)• Enforcement of our purchasing policy• To formulate purchasing policies and conduct SAQs going
forward, we stipulated the selection of suppliers from theperspectives of thorough compliance, ensuring equal
opportunities and transparence, contributing to the reductionof environmental impacts and sustainable procurement• Inspection visits to suppliers of raw materials for cellulose
tape and understanding of the local natural and working
environment, as well as contribution to improvements• Conducting SAQs of major raw material suppliers• Implementing briefing sessions on our purchasing policy
for suppliers• Communication activities with local communities around our business sites• Educational activities by visiting classes at elementary schools• Support for people with disabilities• Fostering the development of trainers for athletes• Providing support through official suppliers and awareness-raising activities ontaping techniques to prevent injuries• Continued to participate in the Japan Football Association JFA
Youth & Development Programme (JYD) and the SOCCER
MEDICAL CAMP, which aims to train the next generation of
athletic trainers. Also continued to provide seminars on taping
techniques and concepts.
• Conducted cleanup activities at factories in Saitama and Anjo
in Japan• Conducted onsite classes at 25 elementary schools in Japan• Provided SDGs awareness lectures at high schools in Japan• Continuation of educational activities and awarenessraising activities on taping techniques for trainers• Contributing to infection prevention through adhesive plasters, hemostatic products,
and dressings• Manufactured hemostatic products to fulfill supply
responsibility for meeting COVID-19 vaccination demand thatwere rapidly distributed to vaccination sites and medical
institutions across Japan• We also supplied hemostatic products for vaccinations to somemedical facilities in Thailand• Develop timely supply systems for regions (countries) where
infection prevention products are not widely available

Contributing to local communities and society

Contribution to medical care

30

Tangible action points• Disclosed information based on the recommendations of the
Task Force on Climate-related Financial Disclosures (TCFD).
	Continued to target a 40% reduction in Scope 1 and 2
emissions by fiscal 2030 and 100% by fiscal 2050 (comparedto fiscal 2013)• Established calculation methods for Scope 1, 2, and 3 emissions• Solar power generated: 494,000 kWh• Green Power Certificates purchased: 11,100,000 kWh

Society

Environment

TopicsNichiban Group Integrated Report 2023

Relevant SDGs

• Identifying issues from a prevention perspective• Raising health awareness• Establishing an environment to promote health andproductivity management* Details are provided in the Nichiban Group Health and Productivity
Management Policy

Nichiban Group Integrated Report 2023

31

Nichiban Group Sustainability

TopicsMateriality

Tangible action points

Actual results for fiscal 2022

Targets for fiscal 2023

• Developing internal control systems• The Internal Audit Division served as the secretariat for theInternal Control Subcommittee, which met four times to share
Nichiban Group internal control objectives and ensure they
permeate the workplace.
• Engaged in discussions and consideration of improvement plansfor deficiencies in audits and information sharing on follow-up
status after audit reports• Strengthening autonomous internal control and risk
management in each division and group company• Strengthening governance, including from a global perspective• Disseminating compliance (action handbook, education through e-learning)• Enhancement of whistle-blowing contact points• Distributed handbook on conduct within the Nichiban Group andspread awareness regarding employee conduct guidelines.
• Established an internal harassment consultation system andprovided e-learning to employees and harassment prevention
training led by outside lecturers.

• Implementing education and establishing systems tostrengthen compliance throughout the Nichiban Group• Strengthen compliance, including from a global perspective• Establish Global Hotline for overseas reporting• Implement emergency response training• Development of a stable supply system based on BCP/BCM• Conducted a Company-wide emergency headquarters
establishment drill assuming a large-scale earthquake, andestablished an information gathering system to ensure a chainof command between the headquarters, factories, and offices, aswell as centralize and visualize disaster information• Determined and promoted measures aimed at sharing
information and formulating responses across the NichibanGroup to resolve issues in business continuity planning identified
by the BCP Committee (which meets twice annually)• Continue conducting Group-wide emergency response
training in the event of a large-scale disaster• Establish, maintain, and operate a business continuity plan
based on our BCP basic policy• Establishment of IT control systems• Implemented development and operations, appropriate risk
management, and audit responses based on internal IT control
standards• IT strategy meetings are held four times annually, backbone
system commenced operations• Confirmed status of infrastructure development and security
education, and summarized progress toward various issues andfuture measures• Implement corporate activities in accordance with NichibanGroup IT Security Policy as well as making further
improvements to the level of management

Creating innovation• Restructuring our R&D organizations• Promoting collaborative programs for start-ups• Effective use of in-house technology inventory• Making use of the Nichiban Group’s internal proposal system• Conducted proposals for B2B customer issues and efforts focusedon B2B consumer viewpoints, planning, and development.
• Conducted accelerator program with startups: Implemented
demonstration experiments and incorporated some themes• Continued to operate the new in-house proposal system andcollect opinions and information on a wide range of issues,
including “everyday problems,” to generate ideas• Submitted 149 proposals under the Nbrain in-house proposal
system in fiscal 2022

• Promotion of a development system that is both customerand market-oriented• Collaborative development with start-ups• Promoting new business development using open
innovation• Promote product development proposals using the new
in-house proposal system, NBrain, and promote inspirationand information sharing on idea farm (our in-house social
network)

Speedy development and expansion into global markets• Promote new development activities worldwide, including in Nichiban (East Asiaand Oceania), Nichiban (Thailand) (Southeast Asia, ASWAN, and the Middle East)and Nichiban Europe (Europe)• Search and selection of strategic partners in priority regions (business alliances,
M&A)• Increased the number of shops handling CARELEAVES™ andpromoted high-performance plaster that gently protect wounds• Promoted the announcement of Cesablic™, a hemostatic plasterthat can be hygienically applied to puncture sites after injection,and has been adopted in some regions• Education and awareness-raising on products for infectious
disease prevention, expansion of sales• Develop timely supply systems for regions (countries) where
infectious disease prevention products are not widely
available

Corporate governance

GovernanceCompliance

Risk management

Business Innovation

Information security

Important Sustainability Themes for the Value Chain
Developing products that
contributing to solving
environmental and social issues

R&D• A policy of developing products thatshow concern for the environment• A systematic approach to R&D that
focuses on the customer• Collaborations with start ups

Medium-Term Management Plan “ISHIZUE 2023 ~SHINKA·HENKAKU~”• Contributing to infection prevention through adhesive plasters,hemostatic products, and dressings• Contributing to medical care through adhesives

Contributing to environmental issues thanks to cellulose tape being
a product derived from natural materials•Raw materials•Suppliers•Procurement logistics
Appropriate management ofchemical substances

Product manufacturing(Operations)

Sales• Improving product quality and ensure safety• Consideration for resource depletion• Measures to counter climate change andglobal warming

Products in use

Disposal of
products• Developing environmentally friendly products• Reduction of environmental impact• Measures to counter climate change and global warming

Compliance32

Nichiban Group Integrated Report 2023

Medium- andLong-Term Vision

NICHIBAN
GROUP
2030 VISION

Reduction ofenvironmental impact
Continuing to create
value that supports
comfortable lifestyles
and contribute to theglobal community!

Biodiversity conservation

Corporate governanceRelevant SDGs

Risk management

Information security

Promoting diversity and inclusion andfostering human resources

Occupational health and safety

Contributing to local communities
and society

Nichiban Group Integrated Report 2023

33

Initiatives for the Environment

Initiatives for the Environment

Initiatives for the Environment
Environmental Conservation Costs
Classification

Breakdown

Senior Operating Officer
General Manager of Quality Assurance Division

1.1 Pollution prevention costs
1.2 Global environmental
conservation costs
1.3 Resource recycling costs

3. Management activity costs

4. R&D costs
5. Social activity costs
6. Cost for dealing withenvironmental damage

Environmental Management System
Environmental management systems promoting
1. Development, improvement, and provision ofenvironmentally friendly products,
2. Environmental conservation (reduced environmental
impact on surrounding areas),
3. Energy saving (electricity, gas),
4. Effective use of resources and proper disposal of waste(improved recycling rates), and
5. Green procurementin the research and development, manufacturing, and sales of adhesive
products and related business activities.

Effect contents
CO₂ emissions in
Scope 1 and 2
Waste generated
Water usage(product development to
reduce environmental
impact, etc.)

INPUTS
Other 15 TJ

34

Nichiban Group Integrated Report 2023

564,459

665,518
Costs for pollution prevention (air pollution, water pollution, etc.)
Costs for global environmental protection (prevention of global warming,
907,470
energy saving, etc.)
244,962
Costs for effective use of resources and recycling and proper disposal of waste
Green purchasing and green procurement costs
3,595
Recycling costs for product containers and packaging
Costs for operating and maintaining the environmental management
system
40,760
Expenses for environmental information disclosure and environmental
advertising
Costs for monitoring and managing environmental impact
Labor costs for developing environmentally friendly products
169,130
Costs for developing environmentally friendly products
Environmental activity costs for local communities
0
Donations to environmental organizations
Insurance premiums for environmental pollution (air pollution, soil
0pollution, etc.)
2,031,434
Total

172,434

658,677

145,374

129,164

988,731

183,384

234,897

233,033

235,701

24,522

3,595

16,186

131,178

40,760148,477

12,852

169,130

12,852

12,157

0

22,486000717,2032,093,927

764,460

Economic Effects of Environmental Conservation Measures

FY2021environmental
impact22,620 t-CO₂

FY2022environmental
impact20,710 t-CO₂

4,227 t4,041 t701,000 m³

635,000 m³

727 t

538 t

FY2021

Effect contents

Environmental load index
Change and effect ofenvironmental loadon the previous year

Revenue

FY2022

Amount of Money Amount of Money

Revenue from recycling of waste
generated in business activities

1,910 t-CO₂
reduction
186 t reduction
67,000 m³
reduction

Total

5,010

7,279

5,010

7,279

189 t reduction

Reduce environmental impacts through purchase of GreenPower CertificatesEquivalent toEquivalent to2,746 t-CO₂
4,995 t-CO₂

Climate change is an unavoidable and urgent issue for all humanity. The
effects of rising average temperatures, damage caused by heavy rains
and typhoons, and their impact on crops and ecosystems have alreadybeen observed worldwide. It is thought that continued greenhouse gas
emissions in the future will have even more serious effects on nature andhuman society.

The Nichiban Group positions climate change and global warming
countermeasures, product development that resolves environmental andsocial issues, and the reduction of environmental impacts throughbusiness activities as its materiality (key issues), and will promote efforts
to respond to climate change and contribute to a decarbonized society.

Electricity 263 TJ

Capital investments include the amount of investment related toenvironmental conservation. Expenses include labor costs related to theresearch and development of eco-friendly products and environmental
conservation activities, as well as the depreciation of equipment used inenvironmental conservation activities.

The Nichiban Group Philosophy is to “respect people’s cooperative
relationships and strive to foster prosperity and happiness for all
stakeholders.” In line with this philosophy, in order to meet stakeholder
expectations and the demands of society, we have defined materiality in
our “Concept of Sustainability” and have identified climate change andglobal warming countermeasures as our highest priorities.
The Nichiban Group discloses information based on the four pillars
recommended by the Task Force on Climate-related Financial Disclosures(TCFD): Governance, Strategy, Risk Management, and Metrics and Targets.
We will continue to enhance these disclosure efforts going forward.

Risk Management Structure
Board of Directors
Reports

Supervision and guidance

Sustainability
Committees

Climate-Related Disclosure Based on TCFD
Recommendations

FY2022514 TJ

Environmental Accounting
Nichiban has conducted its own environmental accounting since fiscal
1999 to calculate environmental costs and their effects. These efforts
target the Headquarters, three domestic factories, and three domestic
Group companies, covering a period starting on April 1 through March
31 of the following year. Further, environmental costs are tabulated by
dividing them into two categories, capital investments and expenses.

1,880,442

1. GovernanceCity gas

201 TJ

536,494

Toward the Realization of a Decarbonized Society

Solar power
generation 5 TJ

31 TJ

Expenses

1,817,949(Thousands of yen)

Environmental
conservation effects

Other effects

ISO Review

Co-generation

CapitalInvestment

Organization in chargeof risk management

Various environmental impacts from business activities are tabulated forall domestic business sites to determine current conditions, which isuseful for activities aimed at reducing energy consumption and the useof solvents.

Expenses

Environmental Conservation Effects

Emissions of PRTR
substances (total)Internal and External Audits
The Nichiban Group conducts internal and external audits to confirm that the environmental
management system is functioning effectively and that environmental conservation activities are being
implemented effectually.
To ensure that the system functions effectively, we confirm that we are working with anawareness of our responsibilities, and sufficiently monitor implemented actions.
Going forward, we will continue to use the PDCA cycle to work toward a better system.

FY2022

CapitalInvestment

Environmental conservation costs to reduce environmental impact

2. Upstream/downstream costs

In line with the basic philosophy of “fostering prosperity and happiness for all stakeholders of Nichiban Group,” we aim to coexist in harmony
with society and nature through our business activities and promote initiatives that create a sustainable society. These efforts cover a wide
range of areas, including product development that contributes to the resolution of environmental and social issues, the reduction ofenvironmental impacts, the appropriate management of chemical substances, climate change and global warming countermeasures,awareness of resource depletion, and biodiversity conservation. As a manufacturer, all Nichiban Group employees will strive to reduce various
environmental impacts that occur throughout the product life cycle.

Environmental Load Data

Main activities

1. Business area costs

Takemasa Kokubo

Acquisition of ISO 14001 Certification
The Nichiban Group has acquired ISO 14001 certification and isconstantly working to improve its environmental management system.
We will continue to make further improvements while aiming todecrease our impact on the environment by enhancing the skills ofinternal auditors.

(Thousands of yen)

FY2021Aiming to Contribute to the Realization of a Sustainable Society where Future
Generations Can Maintain Lifestyles of Abundance and Peace.

Committees
Departmentsin charge

Climate change risks
Environmental risks

Sustainability Committee
Corporate Planning
Division

Business risks
BCP Committee

Quality & Environment
Management Department

Supply Chain Division
Production Division

Company-wide risk management: General Affairs Department

Corporate Governance Structure

P50• The Sustainability Committee, chaired by the Director in charge of CSR, is established to review anddeliberate basic policies, important issues, and risks and opportunities related to climate change.
• Climate change-related studies are conducted under the auspices of the Sustainability Committee,
which submits and reports its findings to the Board of Directors once a year, with the Board of
Directors providing oversight and guidance.
• Agenda items deliberated and resolved by the Board of Directors are implemented in each divisionand reflected in their respective management plans and business operations.

Nichiban Group Integrated Report 2023

35

Initiatives for the Environment

2. Strategy
Perceiving climate change as one medium- to long-term risk facing the
Nichiban Group, and to consider strategies and organizational resiliencein light of related risks and opportunities, we referred to climate change
scenarios (<2°C scenario and 4°C scenario*) proposed by theInternational Energy Agency (IEA) and Intergovernmental Panel on
Climate Change (IPCC) to consider the long-term impact on Nichiban up
to 2050, and conducted scenario analyses for our domestic medical andtape businesses, which account for a large portion of sales.

Note: The <2°C scenario assumes measures such as tighter regulations and market changes are implemented to minimize temperature increases.
The 4°C scenario assumes rising temperatures will result in extreme weather and other physical impacts.

4. Metrics and Targets
In order to assess and manage the impact of climate-related issues on
management, we use total greenhouse gas (GHG) emissions (CO₂)
falling under Scope 1, Scope 2, and Scope 3, as an indicator.
Targets and results for Scope 1, Scope 2, and Scope 3 are disclosed
for Nichiban and its domestic subsidiaries.
Fiscal 2022 Scope 1 and Scope 2 CO₂ emissions

3. Risk management
Nichiban established a working group on climate change risks to conduct
scenario analysis. To prioritize climate-related risks, we will focus efforts
on key risk factors, taking into consideration the likelihood of occurrence
and magnitude of impact that risks and opportunities have on Nichiban.
The Sustainability Committee will continuously confirm these risk factors
going forward.

In addition to existing efforts, major CO₂ emissions reduction efforts
will be studied and sequentially disclosed in light of cost andeffectiveness in order to contribute to a decarbonized society.

Fiscal 2022 Scope3 CO₂ emissions
Business travel

As a process for managing climate-related risks, the Corporate
Planning Division serves as the secretariat for the Sustainability
Committee, analyzing climate-related risks, formulating and promoting
countermeasures, and managing progress through the Sustainability
Committee.
The details analyzed and reviewed by the Sustainability Committee
are reported to the Board of Directors for Company-wide integrated risk
management.

735 t-CO2

Waste from business operators

Scope 2

8,753 t-CO2

5,815 t-CO2

Disposal of purchased products

Transportation,delivery (upstream)

CO2 emissions
in fiscal 2022:

CO2 emissions
in fiscal 2022:

30,899 t-CO2

20,710Fuel and energy-related activities
not included in Scope 1 and 2

t-CO2

*

Scope 1Non-energy source

Scope 1
Energy source

2,260 t-CO2

12,671 t-CO2

270,233
t-CO2

4,855 t-CO2

1,759 t-CO2

Transportation, delivery (downstream)

1,060 t-CO2

Employee commuting

870 t-CO2

Purchased products and services

209,079 t-CO2

Capital goods

12,223 t-CO2* Excludes amount equivalent to green electricity from Green Power Certificates (4,995 tons of CO₂).

Scenario

Factor2°C (Transition)

Introduction ofcarbon taxes.

Strengthening ofvarious regulations
including GHG
emission regulations.

Change4°C (Physical)

Investor emphasison ESG.

Increased frequency ofsevere disasters.

Decrease in productionof raw materials
derived from natural
resources due toclimate change.

36

Nichiban Group Integrated Report 2023

Degree ofimpactImpact on Nichiban

Nichiban countermeasures
Reduce procurement costs and pass on costs bystrengthening procurement functions throughprocurement conditions and supplier revisions,etc.

Increased procurement
costs for raw materials
and secondary
materials.

Risk

Profits will be squeezed by passing on the costof raw materials and secondary materials suchas FSC®-certified paper, resin, and rubber,which have high emissions per unit.

Increased operating
costs.

Risk

Carbon taxes will put downward pressure on
profits.

Reduce energy consumption by reorganizing
production bases and introducing new
construction methods.

Risk

Increased costs of purchasing certificates, etc.,
will put downward pressure on profits.

Reduce purchase costs through pricenegotiations for environmental value anddiversification of suppliers.
External PR focused on renewable energy
initiatives.

Risk

Increased financial burden due to new capital
investments for decarbonization (achieving
CO₂ emission targets) and restructuring ofproduction bases will put downward pressure
on profits.

Reduce costs by introducing comprehensive
determination criteria for CO₂ emissions andenvironmental impacts.
Level capital investments, etc., based onlong-term investment plans.

Opportunity

We can expect an increase in the domestic
sales of products derived from natural
materials in the fields of home offices,
e-commerce, and industrial products (resultsof impact estimates as of fiscal 2023).

Intend to improve brand value by appealing theenvironmental contribution value of products
made from naturally derived materials (cellulose
tape, etc.)

Opportunity

By quantifying the environmental life cycle
impact from procurement, design, andmanufacturing, we will increase sales bypromoting switching through the development
and strengthening of sales of products withhigh environmental value.

Promote Nichiban initiatives for material
sustainability issues• Promote product development and strengthen
sales of environmentally friendly products• Introduce low environmental impact
evaluation into product development

Increased operating
costs due to purchaseof certificates andother environmental
value.

Increase in facility
upgrade costs.

Growing demand fornatural products.
Growing awarenessof environmental
considerations.

Risk/
Opportunity

Increased demand forenvironmentallyfriendly products.

Delays in disclosing information on efforts to
Maintain implementation of appropriate climate
address climate change, etc., will lead to lower
change initiatives and information disclosure
investor evaluations.

Growing importance ofaddressing climatechange and disclosure

Risk

Increased demand fortapes and sheets fordisaster prevention,
repair, and temporary
fixes.

Opportunity

Increased risk of
temporary production
stoppages due todisasters.

Risk

The results of the Aqueduct floods rcp8.5
Ongoing response through established Businessscenario analysis confirmed that none of theseContinuity Plan (BCP).
scenarios are damaging at this time.

Increased risk of
production stoppages.

Risk

Profits will be adversely impacted byproduction stoppages due to difficulties inprocuring materials necessary for production.

Sales of tape products used for disasterprevention, etc., will increase.

Develop and promote sales of products that
prepare for severe disasters.

CO₂ Emissions Reductions
In the Corporate Governance Report disclosed on June 29, 2022,
we announced Scope 1 and 2 CO₂ emission reduction targets as one of
the critical environmental and social issues that must be addressed,
calling for a 40% reduction in CO₂ in 2030 and a 100% reduction in 2050
compared to fiscal 2013. To this end, in fiscal 2022, research andproduction began working together to develop new products based on
environmentally friendly manufacturing methods. In addition to energy
conservation and yield improvement efforts we have been engaged in forsome time, we will strive to develop new products with low
environmental impact in order to achieve these targets.

CO₂ emissions reduction targets

40% reduction
100% reduction

2013

2030

2050

Renewable Energy Initiatives
To reduce CO₂ emissions through energy reductions, Nichiban Medical
Corp. completed the installation of solar panels on the roof of its factoryin October 2020 and September 2022. As a result, the amount ofelectricity generated in fiscal 2022 amounted to 494,000 kWh.

Green Power
Nichiban purchases Green Power Certificates from Japan Natural EnergyCo., Ltd., for the electricity it uses with the aim of converting 100% of theelectricity used by the Nichiban Group and affiliated companies in the
production of cellulose tape and cellophane-based adhesive tape, theelectricity used at the Headquarters and seven sales offices nationwide,
and the electricity used in the manufacture of CARELEAVES™ producedby Nichiban Medical to green power.

Solar power generation equipment (Nichiban Medical)

Diversify raw material suppliers.

Nichiban Group Integrated Report 2023

37

Initiatives for the Environment

Energy Conservation and Environmental Impact Reductions

Coexistence with Nature

Factory and Office Initiatives
In order to reduce CO₂ emissions and power consumption, we have beenpromoting thorough the air-conditioning management and the LED
conversion of lighting fixtures used in various locations in offices andfactories.
In offices, we visualize the amount of paper and electricity used in
an attempt to achieve reductions. We have also switched to hybrid
vehicles for sales to promote eco-driving.
At our factories, we are striving to reduce energy consumption
through demand management by introducing equipment with highenergy-saving performance when upgrading facilities. Further, byswitching to a non-solvent-based production system, we are reducing
both energy consumption and environmental impacts.

Biodiversity and Conservation Activities
Nichiban corporate activities depend on a variety of natural resources, but
the rapid loss of biodiversity due to deforestation and environmental
pollution is accelerating, with many parts of the world facing serious crises.
Some of our products, such as cellulose tape, are derived from thebounty of natural resources, and we recognize the loss of biodiversity asa serious social and environmental issue.
The Nichiban Group aims to coexist with nature through ourbusiness activities, and we are taking steps to conserve biodiversity,
including the effective use of water resources and afforestation efforts.
We will also maintain efforts to conserve biodiversity and protect
the natural environment through cooperation with local governments
and residents living in the vicinity of our factories and other facilities.

Logistics Initiatives
Nichiban is responsible for a wide range of logistics operations, including
incoming shipments from factories to warehouses, as well as outgoingshipments from warehouses to customers.
We deliver our products to customers “safely, securely, and stably”
while being conscious of energy conservation, the reduction ofenvironmental impacts, and improved logistics efficiency.
Specific initiatives include: (1) improving transportation efficiency,(2) warehousing inventory in appropriate ratios, and (3) reducing
product waste.
We are working to improve transportation efficiency and towarehouse inventory at an appropriate ratio by sharing issues withproduction divisions. In addition, we are working with sales divisions to
reduce the amount of waste by curtailing the amount of immovable andslow-moving items.
Although there are many issues to be addressed, we will work
closely with the relevant divisions to achieve energy conservation andreduce environmental impacts.
Nichiban Selected as an Excellent Energy-saving Business
Nichiban has been selected as an excellent energy-saving business in theJapanese Ministry of Economy, Trade and Industry's Energy Conservation
Act business classification evaluation system since fiscal 2021,
maintaining an S-class rating since the classification system was launched.
Nichiban Medical received an A-class rating in fiscal 2021. Goingforward, the Nichiban Group will redouble efforts to save energy.

Cellulose Tape Eco-Circle
For more than 70 years, Nichiban has manufactured plant-derived
cellulose tape as an environmentally friendly, recycling-oriented
ecological product, with the health and safety of our customers in mind.
We are committed to reducing CO₂ emissions through an eco-circle
centered on cellulose tape and contributing to a carbon-neutral andsustainable future together alongside our customers.
Cellulose Tape Eco-Circle

Purchasing

Environmentally
Friendly cellulose tape
Main raw materials are

Produced withgreen electricity
Green power generation

100%

natural materials

Selection

Gounogawa “Forest Drop” Conservation Activities
The third round of domestic afforestation Gounogawa “Forest Drop”
conservation activities were planned for May 2022, but the project wascancelled between 2020–2022 out of concern over the spread of
COVID-19 and consideration for the health of those participating in
the activity.

ApproachContributing to a
Production sustainable future Production
with Nichiban
cellulose tape
Recovery

Planting mangrove trees with profit
from recovered tape cores, etc.

Cumulative mangrove plantation:Over

Development, improvement, and proposalof environmentally friendly products• Wood chips• Natural resin• Natural rubber

270,000

NichibanSocialissuesEnvironmental Bounty ofpollution
natureDeforestation Biodiversity

Afforestation activities in Japan

Environmental
conservation

trees

Environmental conservation(improve environmental impact on surrounding areas)
Nichiban Tape Core ECO Project afforestation activities

Nichiban Tape Core ECO Project
Since 2010, we have conducted the Nichiban Tape Core ECO Project torecycle the tape cores used for adhesive tape rolls. During the 13thround of this project (September 1—December 27, 2022), 794
organizations from schools, companies, hospitals, and otherorganizations and 348 individuals participated, with 523,200 tape cores(weighing 7,160 kg) collected.
The cumulative total number of tape cores collected since the project
began has reached more than 5,290,000 (approximately 67 tons).
Nichiban also endorses Paralym Art®, an activity supporting theartistic endeavors of people with disabilities. We have used the work ofartists with disabilities for Nichiban Tape Core ECO Project posters,
certificates of appreciation, and flower seed designs.

 wareness Program Conducting Onsite Classes
A
at Elementary Schools
In fiscal 2022, we held onsite classes at 25 elementary schools that applied
for them when participating in the Nichiban Tape Core ECO Project.
Since the 10th round of the Nichiban Tape Core ECO Project in
2019, we have held classes on the subject of cellulose tape. These
classes emphasize the importance of eco-friendly materials that can beeasily sorted when disposed, recycling efforts, and environmental
problems, while brainstorming with students on what we as individuals
can do for a greener Earth.
There are many requests for onsite classes during the first half ofeach school year (May to mid-July), which have been very well received.

Overseas Afforestation Activities
Overseas, Nichiban supports mangrove planting and conservation
activities in the Philippines, conducted by the environmental NGO Ikaw
Ako since 1997.
Nichiban has cooperated in the planting of more than 360,000
trees to date, and in fiscal 2022, planted 35,351 trees.
Note: In fiscal 2023, Nichiban plans to plant 15,079 trees. The cost of seedlings has increased due tosoaring prices accompanying economic development in the Philippines.

Afforestation activities overseas

Contributing to the SDGs with Cellulose Tape
Cellophane, the base material of cellulose tape, is made from wood pulp,
the adhesive is made from natural rubber and resin, and the tape core ismade of recycled paper. Since the main raw materials are natural,
renewable materials, cellulose tape is a product that can contribute to
reducing environmental impacts (certified as a Biomass Mark product by
the Japan Organics Recycling Association).
Nichiban will contribute to the SDGs
through small actions such as replacing plastic
tape, which is made mainly from fossil
resources, with cellulose tape.

Onsite class at elementary school

Number of endorsing companies: 117
Tape cores recovered

38

Nichiban Group Integrated Report 2023

Nichiban Group Integrated Report 2023

39

Initiatives for the Environment

Converting Thermal Recycling to Material Recycling

FSC® Certification

Efforts to Reduce and Eliminate Solvent Usage

Reducing Waste through the Effective Use of Raw Materials

At Nichiban Medical, we have begun the material recycling of liner paper

The Nichiban Group has acquired 2022 Forest Stewardship Council

The Nichiban Group is continuously working to reduce solvent usage byRather than using disposable consumables in manufacturing processes,

used in the manufacturing process. We are also verifying the material(FSC®) and Chain of Custody (CoC) certification (FSC® C183983) for Washi

increasing productivity and changing production conditions. At the Tape

we attempt to reduce waste by repeatedly reusing materials to therecycling of adhesive tape raw material scraps. Going forward, we intend

Masking Tape produced at the Saitama Factory (some of which is for

Anjo Factory, we have introduced a hot melt coater that uses heat toextent that they do not pose any quality issues. We also consult withto expand material recycling to other production facilities to increase theoverseas markets). By manufacturing and supplying Washi Masking Tape

melt glue for the production of adhesive tape. We are engaged in the

manufacturers regarding packaging materials when purchasing raw

type and amount of material recycling and continuously reduce waste.

with liner paper made from properly managed FSC®-certified forests,

research and development of new production methods to further

materials and effectively exploit resources by utilizing returnable rather

recycled resources, and other managed raw materials, companies andeliminate the use of solvents while promoting their application to newthan single use packaging.

users can carry and use our products with confidence.

and existing products.

Water used at factories

Act on the Recycling of Containers and Packaging in Japan(Thousands of cubic meters)

Three domestic factories

35

32

820

2018

Three domestic Group companies

51

54

In accordance with the Act on the Promotion of Sorted Collection andAlthough not subject to this regulation, we voluntarily measure andRecycling of Containers and Packaging, which mandates the recycling ofmonitor wastewater discharged from our factories.

containers and packaging waste generated by households, the NichibanGroup pays a reprocessing consignment fee to the Japan Containers and

Air Pollution Control Act in Japan
We comply with emission standards for volatile organic solvents emitted

801

2019

53

Water Pollution Prevention Act in Japan

721

2020

648

2021

634

2022

(FY)

when drying adhesives. We also voluntarily measure and monitor dust,

Plastic Resource Circulation Act in Japan

nitrogen oxides (NOx), and other emissions at facilities that are not

As a manufacturer, Nichiban strives to design products in accordance

regulated, and appropriately report specified dust.

with design guidelines for products that use plastic. Further, we set atarget for reducing the amount of industrial waste generated from plastic

Hazardous Materials Handling and Management

products in fiscal 2025 by 5% (per unit produced) compared to fiscal

Workers are licensed as hazardous material handlers and are trained
in-house to handle hazardous materials properly. Temperature control
and static electricity countermeasures are implemented to ensure theInitiatives Related to Chemical Substances, etc.
Act on the Regulation of Manufacture and Evaluation of

Based on its environmental policy, the Nichiban Group pursues the

Chemical Substances in Japan

manufacture of products that are safe, healthy, and environmentally

In order to prevent environmental pollution by chemical substances,friendly throughout their entire life cycle (development, manufacturing,

Nichiban manages operations in accordance with laws and regulations,distribution, use, and disposal). As part of these efforts, we promote theincluding the reporting of new chemical substance production andprocurement of raw materials and parts with low environmental impact

production volumes.

of the total in fiscal 2025, among other initiatives aimed at curbing
recycle by material or chemical means is recycled through initiatives

Waste Management

involving thermochemical substances.

In compliance with laws and regulations, Nichiban outsources waste
treatment to subcontractors in accordance with the type of waste. We
separate waste for material and chemical recycling, and conduct thermal
recycling for waste that is difficult to recycle for reuse as raw materials.
Nichiban has achieved zero emissions since 2012.

and the appropriate management of chemical substances. In proactively

2021, and increasing material and chemical recycling rates to at least 7%
emissions and recycling waste. Over 99% of waste that is difficult toproper storage and use of hazardous materials.

Promoting the Green Procurement of Raw Materials

Packaging Recycling Association for appropriate disposal.

Fiscal 2022 industrial waste emissions from productsthat use plastic

3,226 tpromoting these initiatives, we publish the Nichiban Group Green
Procurement Guidelines, which summarize our basic approach andWaste emissions

requests for suppliers, while promoting the reduction of environmental(t)impacts throughout the supply chain.
Disclosure of SDS, RoHS, and Other Information

4,000

on Major Products

4,045

Solvent recovery equipment exterior

As laws and regulations concerning environmentally hazardous

40

Solvent distillationequipment exterior

substances become increasingly stringent each year both in Japan andAct on Confirmation, etc. of Release Amounts of Specificoverseas, inquiries from customers regarding the chemical substances

Chemical Substances in the Environment and Promotion ofcontained in our products are also on the rise. We maintain a close watch

Improvements to the Management Thereof in Japanon the revision of related laws and regulations, and gather information to

The Nichiban Group recovers most organic solvents discharged duringprovide prompt responses to customer inquiries. For major products thatthe coating process and reuses them repeatedly. We also manage thereceive frequent inquires, we make safety data sheets (SDS), RoHS

small amount of emissions not fully recovered, which is reported

directives, and other information available on our website to ensure theappropriately. Further, we strive to reduce emissions by converting toprompt provision of information.

solvent-free production methods.

Nichiban Group Integrated Report 2023

3,860

2,226

4,227

4,041

2,413

2,189

1,000
343

(%)

100

80

60

40

3,081
2,161

0

100

1,884

3,000

2,000

99.7

70.5

Nichiban strives to manage the chemical substances contained in its
products based on the Nichiban Group Green Procurement Guidelines.

99.8

99.2

5,000

32
0.3

2000

Waste emissions
Three factories
Three domestic Group companies

1,634

8
1.2
32.3
2019

1,634

1,852
20

11
0.4
9.2

1.0
0
11.4

1.0

2020

2021

2022

0
(FY)

Final disposal volume
Recycling rate
Three factories
Three domestic Group companies

Nichiban Group Integrated Report 2023

41

Initiatives for Society

Initiatives for Society—Nichiban Group Human Capital Management

Nichiban Group Human Capital Management
The Nichiban Group believes that its people are the most powerful driving force
of corporate activities and promotes human capital management through D&I,
self-directed human resource development, and health and engagement.
Yoshifumi Yamaguchi
Operating Officer
Deputy General Manager of Administration Division and General Manager of Human Resources Department

The Nichiban Group believes the continued practice of its Action Guidelines under the categories Society, Customers, Challenge, Speed, andTeamwork to realize the Nichiban Group Philosophy and Corporate Policies set forth in the Nichiban Group Philosophy by bringing together adiverse group of human resources will lead to creating innovation, global expansion, and sustainable corporate growth aimed for in the “NICHIBANGROUP 2030 VISION.”
We are investing in human resource development and actively promoting Diversity & Inclusion (D&I) to foster a corporate culture thatencourages all employees to broaden their perspectives, be creative and proactive in their behavior, and grow.
We also strive to enhance the physical and mental health of its employees, maintain safe work environments, and conduct fair employment
practices and evaluations with respect for human rights.

Promotion of Women’s Participation
Nichiban has formulated its Second Action Plan (spanning April 1, 2019
- April 1, 2024) to narrow the gap in the ratio of male and female
managers, and we are pressing forward with initiatives to address
this issue.
To achieve diversity and promote women’s participation, we havedeveloped and implemented training programs and measures thatenable all employees to change their mindset and work styles. As of April
2023, Nichiban achieved the target of 10% female managers set in theSecond Action Plan ahead of schedule. We are striving to support diverse
work styles by introducing staggered work schedules and work fromhome programs from fiscal 2022 (Nichiban non-consolidated).
We will continue to aim for a workplace where everyone canparticipate regardless of gender.

Number of male managers

Leadership

Training by
employee rank

Health and Productivity
Management

Employee engagement

Skill development(by speciality, or function)

Next-generation
executives

Work-life balance

Occupational healthand safety

Experience, OJT(on-the-job training)

Retention

Acquisition and formation of a diverse talent pool
(1) Diversity & Inclusion (D&I)
Fostering an organizational culture in which diverse values are respected, and in which
all employees can express their individuality, cooperate, and enhance each other’s skills

21

20

18
2.4

2.2

2.5
2.3

21

16

13

14

159

157

149

174

166

10.8
8.8

8.6

7.6

2019

2018

Attainment of employees’ mental andphysical health and job satisfaction

Employment ratio of persons with disabilities (%)

20

19

2.2

2020

2021

2018

2019

2020

2021

2022

(FY)

Promoting Understanding of LGBTQ and
Related Issues

NICHIBAN GROUP 2030 VISION
Creating Innovation and Global Expansion toward a Sustainable Society

Developing leaders who will lead the next
generation and self-directed human resources
who can maximize their diverse abilities

Number of employees with disabilities

Number of female managers

12

7.0

(3) Health and engagement

Employment of persons with disabilities (non-consolidated)

Ratio of female managers (%)

Enhancing Corporate Value and Creating Stakeholder Value(2) Human resource development

Nichiban is committed to creating a workplace that grows together withpeople with disabilities. The Tape Anjo Factory publishes the “Step
Newspaper,” which includes job descriptions and workplace information,
to promote communication with the families of people with disabilities.
We also endeavor to create an environment in which people withdisabilities can work in a fulfilling manner.

Percentage of female managers (Non-consolidated)

Overview of Human Capital Management

Human Capital Management Practices

Initiatives for Employment and Supportof People with Disabilities

2022

(FY)

Promotion of Male Employees Childcare Leave
We are promoting the use of childcare leave for male employees in
response to the expansion of the childcare leave system in accordancewith the revision of the Act on Childcare Leave, Caregiver Leave, and Other
Measures for the Welfare of Workers Caring for Children or Other Family
Members as well as to assistance for balancing work and childcare forboth men and women. In fiscal 2022, we established a consultation
service and held internal briefing sessions, and the ratio of male
employees taking childcare leave reached 66.7% (non-consolidated).
We will continue to create an environment in which employees canflexibly take childcare leave and that encourages male employees toparticipate in childcare.

The Nichiban Group considers Diversity & Inclusion (D&I) to be one of themost important elements of human capital management and iscommitted to creating an environment in which diverse employees canactively participate. As part of these initiatives, we will promote diversity
training and other initiatives to increase understanding of LGBTQ andrelated issues, with the aim of creating a work environment in which allindividuals can work as their authentic selves with enthusiasm.

Childcare leave, ratio of male employees taking childcare
leave (non-consolidated)
Number of male employees who took childcare leave
Ratio of male employees taking childcare leave (%)

66.7

Diversity & Inclusion (D&I)
The Nichiban Group actively promotes Diversity & Inclusion (D&I), theconcept of respect for a wide variety of lifestyles and values as well as
embracing differences in nationality, race, ethnicity, religion, gender, age,disability, sexual orientation, and other attributes.
We believe it is important for all our employees to express theirdiverse individualities and cooperate with and enhance each other to42

Nichiban Group Integrated Report 2023

create new values. This leads to both their personal growth andsustainable enhancement of the Nichiban Group’s value.
We will continue to promote D&I based on the Nichiban Group
Philosophy, aiming to achieve the innovation that is created by diversity
and a globally dynamic group.

44.4

14

30.0
8

18.5
5.3
1
2018

6
5

2019

2020

2021

2022

(FY)

Nichiban Group Integrated Report 2023

43

Initiatives for Society—Nichiban Group Human Capital Management

Human Resource Development

Health and Engagement
What we seek from our human resources is the embodiment of thefive Action Guidelines (Society, Customers, Challenge, Speed, Teamwork)
set forth in the Nichiban Group Philosophy and become self-driven
individuals who ambitiously explore new fields and grow throughself-improvement to resolve various issues.
We aim to develop self-directed human resources who embody our
Action Guidelines, so that people and the Nichiban Group can grow together.

The Nichiban Group recognizes that its people are the most powerfuldriving force of corporate activities as well as being vital human capitaland stakeholders.
In a rapidly changing business environment, we believe for
Nichiban to continue to grow and contribute to a sustainable society, weneed leaders of the next generation and human resources who can
express their diverse abilities to the fullest.
Human Resource Development System
New graduate
Hierarchy-based
trading

General staff
Leadership training

Core staff training

Induction training

Managerial positions

General managers/
section managers

Officers

Management training

Head of organization training

Director training

Induction training for mid-career employees

Officer training

Sales training / Development and innovation training / Production management training / Quality control training

Function-specific/
specialized education

Language proficiency measurement/Training
Small group activities / Award programs
MBA business skills training

Elective
training

Overseas training / Overseas dispatch
University dispatch/Study abroad
Career Plan Sheet System

Careerdevelopment

Career Design Training

Self-development

Support to acquire qualifications / e-learning / distance learning
OJT (on-the-job training)

In-workplace training

Human Resource Investment andTraining System
We provide education and training programs that aim to develop humanassets with expertise, creativity, and a willingness to take on challenges
in uncharted fields.
Training expenditures per employee (Consolidated)(Thousands of yen)

115
100

82

2018

Executive developmenttraining

93
74

2019

2020

2021

2022

helps employees understand what it takes to continue to be active andcontribute in the workplace and strengthens their mindset and actions totake on further challenges. Many employees extend their employment
after reaching retirement age and continue to play an active role.
Additionally, for new employees and mid-career hires, we have a“Trainer Program” under which senior employees and managers working
in the same workplace act as trainers to help them adjust smoothly to
the workplace and demonstrate their abilities. These trainers
accompanying them toward the goals set in their OJT plans and review
their progress every other month. Nichiban also provides regular
opportunities to meet with representatives of the Human Resources
Department.
Other programs include financial support for distance learning andincentives to acquire qualifications.

The Nichiban Group believes the foremost foundation for realizing its
Philosophy is to improve the work-life balance of its employees, promote
their health and engagement, and ensure their safety. The NichibanGroup will promote the establishment of a workplace environment
where employees can work with peace of mind and vitality.

Work-life Balancemetabolic syndrome and those predisposed. We have created anenvironment in which employees who need health guidance can actively
receive the health guidance programs selected by the Nichiban Health
Insurance Society and strongly encourage their participation, which has
been increasing.

As part of our initiatives to promote work-life balance for its employees,
Nichiban offers a variety of vacation and leave programs in addition to
the legally mandated annual paid leave.
We provide refreshment leave for every 10 years of service andvolunteer leave for social contribution activities. This is in addition to sickleave for personal injury and illness, childcare leave and shorter working
hours for childcare, and nursing care leave and leave for nursing care forfamily members.
Nichiban has also introduced a staggered work schedule and workfrom home program to improve the work-life balance of its employees.
Health and Productivity Management
We formulated the Nichiban Group Health and Productivity Management
Policy in 2022 based on the recognition that the health of our employees
leads to the realization of “prosperity and happiness for all stakeholders”
as stated in the Nichiban Group Philosophy. We have established ahealth and productivity management promotion system headed by the
Chair of the Sustainability Committee and are working on issues basedon the Action Guidelines.
We are also proud to note that the Ministry of Economy, Trade andIndustry in its efforts to promote health and productivity management
has recognized Nichiban as anorganization selected under the large
enterprise category of the 2023 CertifiedHealth & Productivity Management
Outstanding Organizations Recognition
Program in Japan.
Four Action Guidelines for Health and Productivity Management
1. Prevention of occurrence and severity of diseases such as lifestylerelated diseases
2. Prevention of stress-related diseases such as mental health problems
3. Enhancement of health awareness
4. Establishment of an environment that promotes health andproductivity management

Global Human Resources(FY)

Human Resource Retention
We have systems, training, and programs to support careerdevelopment. We run a Career Plan Sheet Program once a year for all
employees. Employees can communicate their ambitions to Nichiban,such as the job or department they aspire to join the future and what
they are working on to achieve this goal.
We also provide Career Design Training for employees who areapproaching the retirement age for their current positions. This training

We are developing global human resources as part of the expansion of
our global business. In addition to subsidizing correspondence courses
and language proficiency
tests, we are also working
to enhance our employees’
abilities to be active on theworld stage throughfriendly rivalry via openly
recruited training programs.

 revention of Occurrence and Severity of Diseases such as
P
Lifestyle-Related Diseases
In addition to encouraging all employees to undergo regular healthcheckups, we conduct specific health checkups and health guidance withthe aim of reducing the population of employees diagnosed with revention of Stress-related Diseases Such asP
Mental Health Problems
We conduct a stress check test once a year for all employees. The results
help employees recognize and address with their own mental andphysical condition, thereby reducing the risk of mental health issues.
The test results are analyzed in the aggregate to improve the work
environment and prevent mental health issues. In addition, ongoingtraining is provided to separate target groups regarding four types ofmental health care, including self-care and line care.
Communication with Employees (Engagement)
To improve employee engagement, we conduct an annual survey andimplement measures to boost engagement based on the results ofthe survey.
In fiscal 2022, a project team consisting of younger employees
within the Nichiban Group conducted activities to revitalize
communication among employee levels (vertical) and departments(horizontal) through engagement training and interactions among
business sites.
Occupational Health and Safety
Nichiban and its labor unions share the status of employee attendance,
operation of sales vehicles, and other information at monthly
Occupational Health and Safety Committee and Health Committee
meetings. In addition, the Central Health and Safety Committee meets
twice a year to promote information sharing throughout Nichiban.
Dialogue with Labor Unions
Nichiban provides various opportunities for dialogue with its labor union,
including biannual Central Management Roundtable Meetings andmonthly Central Labor Council Meetings. These are forums to share
management strategies and discuss improvements in labor conditions
and work styles, in an effort to promote mutual understanding andmaintain and improve sound labor-management relations. Nichiban
employs a union shop system*.
* Collective bargaining agreements that require workers to become members of a specific labor union
when they are employed by a company.

Global Human Resources Training

44

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45

Initiatives for Society—Social Contribution Activities

Social Contribution Activities
Stakeholder Engagement
The Nichiban Group believes in the importance of daily communication
through various means not only with the customers who purchase our
products, but also with our many stakeholders, including employees,
shareholders, investors, suppliers, and citizens in the local communities

where it operates. To continuously improve our corporate value, we will
actively use the feedback we receive to promote the sustainability of the
Nichiban Group.

Respect for Human Rights
Basic Approach to Human Rights
All of our business activities are based on respect for human rights,
and we recognize that appropriate responses to negative impacts onhuman rights are a priority issue that must be addressed by the entire
Nichiban Group.
Therefore, in April 2022, we formulated the Nichiban Group Human
Rights Policy. Based on this policy, we have established key human rights
issues for each of our customers, corporate officers and employees,
business partners, community and society, and all stakeholders.
We also address discrimination, harassment, forced labor, childlabor, freedom of association and the right to collective bargaining,
occupational health and safety, local communities, and high-risksituations as human rights issues related to our business activities.
The Nichiban Group respects the human rights of all people
involved with Nichiban, and we will promote Group-wide measures torespect human rights, including those both directly related to humanrights through our business and those indirectly involved.
Human Rights Due Diligence
To fulfill our responsibility to respect human rights, in accordance with
the United Nations Guiding Principles on Business and Human Rights,
we strive to establish and implement a human rights due diligenceframework. This framework seeks to identify negative human rights
impacts related to our business activities and continuously work toprevent, halt, and mitigate such impacts. We will work to remedy thesituation in an appropriate manner if identified as having caused
negative impacts on human rights.
We will also share our concern for human rights, labor, theenvironment, and anti-corruption with our business partners, demandrespect for human rights, and engage in ongoing dialogue andconsultation with them.

Based on its Philosophy of “fostering prosperity and happiness for all
stakeholders of Nichiban Group,” the Nichiban Group aims to coexist withsociety and nature through its business activities. These include tree

plantings in Japan and overseas, visiting elementary schools nationwide
to hold lectures, and providing sports-related sponsorships, and thus
engaging with stakeholders to contribute to sustainable development.

Contribution to Local Communities
We consider the improvement of the environment around our
production, research, sales, and other business sites and our continued
development together with local communities to be vital for the NichibanGroup to sustain its business activities. We carry out activities at thetiming that is appropriate for each region.
 articipation in Nihongi Federation of Neighborhood
P
Associations Cleanup Activities
We participate in environmental beautification activities in Anjo City, Aichi
Prefecture, where our Anjo Office (the Tape Anjo Factory, the Medical Anjo
Factory, the Advanced and Applied Research Institute) is located.
Twice a year, our employees participate in a simultaneous cleanupof the community organized by the Nihongi Federation of Neighborhood
Associations to deepen exchange with local residents and contribute to
the creation of a better community.


NICHIBAN(THAILAND) Donates CHUSHAVAN™ to Thai
Government Agency
NICHIBAN (THAILAND) visited the Ministry of Higher Education, Science,
Research and Innovation of Thailand to introduce CHUSHAVAN™ plasters
and donated samples to the Ministry to promote vaccination against
COVID-19 infection in the country. We will introduce our products to
hospitals and vaccination centers in Thailand and promote proposal
activities to encourage their adoption.

Donating samples to the Ministry

Nichiban Group Human Rights Policy
1. Introduction
The Nichiban Group Philosophy is “to place great importance on the relationships andbonds between everyone as well as fostering happiness for all those concerned with
Nichiban Group”. Based on this basic philosophy, we recognize that all of our businessactivities must be based on respect for human rights, and we consider appropriate
responses to negative impacts on human rights to be an important issue that should be
addressed by the entire Nichiban Group.
2. Commitment to Human Rights
We support and respect international human rights norms, including the United Nations
International Bill of Human Rights, the core labor standards of the ILO Declaration on
Fundamental Principles and Rights at Work, and the United Nations Guiding Principles
on Business and Human Rights, which set forth fundamental human rights for all
people. We will comply with the laws and regulations of the countries and regions inwhich we operate. In the unlikely event of a conflict between the laws and regulationsof the relevant country or region and international human rights norms, we will pursue
methods that maximize respect for internationally recognized human rights. We willorganize, analyze, and extract negative impacts on human rights throughout the value
chain, and continuously disclose our efforts to manage and appropriately respond tosuch impacts as “key human rights issues” on our company website and elsewhere.

3. Scope
This policy applies to all officers and employees of the Nichiban Group, as well as
temporary employees. We also recognize all counterparts as our business partners, and
we encourage all parties related to our products and services not to infringe on humanrights, and even when the Nichiban Group does not directly cause negative human rights
impacts, we are committed to working together to promote respect for human rights.
4. Human Rights Due Diligence
In order to fulfill our responsibility to respect human rights, in accordance with theUnited Nations Guiding Principles on Business and Human Rights, we will strive toestablish and implement a human rights due diligence mechanism to identify negative
impacts on human rights related to the Nichiban Group’s business activities andcontinuously work to prevent and mitigate such impacts. Where negative human rights
impacts are identified, we will take appropriate steps to remedy them. We will strive tofoster awareness by providing appropriate education on respect for human rights within
our own officers and employees and temporary employees to ensure that this policy is
integrated into and effectively implemented in all of our business activities.
5. Key Human Rights Issues
Based on this policy, we have established a set of Key Issues Concerning Human Rights
at the Nichiban Group and will implement appropriate measures to address theseissues. We will review these important issues from time to time in light of socialchanges and business trends.

Providing Work Experience to Local Junior High Schools
Aichi Prefecture is promoting a “Career Start Project (junior high school
students)” to increase opportunities for youth to learn about theimportance of work and the motivation to work. In cooperation with thisproject, we accept students from local junior high schools for “Career
Start Week (work experience learning)” at the Tape Anjo Factory andNichiban Techno Co., Ltd.

Support for Peacevillage International in Germany
Peacevillage International is an NGO in Germany that supports children
affected by conflict who are unable to receive proper medical treatmentin their home countries. Currently 168 children from Afghanistan, Angola,
and other countries are living at the facility while receiving medical care.
NICHIBAN EUROPE is putting into practice “Society,” an element of
the Nichiban Group’s Corporate Philosophy and Action Guidelines,
through such activities as the free provision of medical products since2019 and donations since 2022.

Accepting junior high school students at Nichiban Techno

Visiting Peacevillage International in Germany

Community cleanup organized by the Anjo Office Nihongi Federation of Neighborhood Associations

Purchasing Policy
In all our purchasing activities, we have formulated and are operating a purchasing policy that also considers human rights
and labor conditions throughout the supply chain based on the Nichiban Group Human Rights Policy.
Click here for the Nichiban Group’s Purchasing Policy
https://www.nichiban.com/corp/sustainability/sustainability/purchasing_policy/

46

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47

Initiatives for Corporate GovernanceManagement

Initiatives for Corporate Governance—Management(As of June 28, 2023)

Directors

Audit & Supervisory Board Members

President

Executive Director

Director, Managing Officer

Director, Managing Officer

Audit & Supervisory Board Member

Audit & Supervisory Board Member

Outside Audit & Supervisory Board Member

Outside Audit & Supervisory Board Member

Toshiaki Takatsu

Hironori Sakai

Hideaki Hara

Yasuhiko Takahashi

Kazunori Takahashi

Kazuhiko Tomioka

Yasushi Kodama

Atsushi Fukuda

Career summary
Apr. 1990	Joined the Company
June 2015	General Manager of Purchase
Department, Business Management
Division
Apr. 2017	General Manager of Middle Japan Sales
Department, Industrial Product SalesManagement Department
Apr. 2018	Operating Officer and General Manager
of Medical Specialty Sales Department
Apr. 2019	Senior Operating Officer, Assistant to
President
June 2019	President, responsible for overall
corporate management (current
position)

Career summary
Apr. 1985 Joined the Company
Apr. 2008	Operating Officer and General Manager
of Administration Department
June 2009	Director, Operating Officer, and General
Manager of Administration Department
June 2015	Managing Director, responsible for CSR
and corporate management
June 2019	Executive Director, responsible for
Promotion Unit and CSR, and General
Manager of Public Relations
Department
Apr. 2020	Executive Director, responsible foradministration and CSR (current
position)

Career summary
Apr. 1984 Joined the Company
Apr. 2011	Operating Officer and General Manager
of Management Department, Tape
Business Division
Apr. 2012	Operating Officer and General Manager
of Tape Business Division
June 2012	Director, Operating Officer, and General
Manager of Tape Business Division
Apr. 2020	Director, Managing Officer, responsible
for sales, and General Manager ofBusiness Management Division
Apr. 2022	Director, Managing Officer, responsible
for sales and development, and General
Manager of Domestic Business Division(current position)

Career summary
Apr. 1986 Joined the Company
Apr. 2011	Operating Officer and General Manager
of Anjo Factory
June 2013	President of Nichiban Techno Co., Ltd.
Apr. 2016	Senior Operating Officer and General
Manager of Administration Division of
the Company
Apr. 2020	Managing Officer, General Manager ofCorporate Planning Division and Public
Relations Department
June 2021	Director, Managing Officer, General
Manager of Corporate Planning Division(current position)

Career summary
Apr. 1985 Joined the Company
July 2012	Operating Officer, responsible foroverseas business and General
Manager of Purchase Department,
Business Management Division
Apr. 2014	Operating Officer and General Manager
of Purchase Department, Business
Management Division
June 2015	Operating Officer and General Manager
of Saitama Factory, Tape Business
Division
June 2017	Audit & Supervisory Board Member(current position)

Career summary
Apr. 1985 Joined the Company
Apr. 2013	General Manager of Tape Business
Division and General Manager of Tape
Special Sales Department
Apr. 2016	General Manager of Administration
Division and General Manager of
Accounting Department
June 2020	Audit & Supervisory Board Member(current position)

Career summary
Oct. 1985	Joined Asahi Shinwa & Co. (currently
KPMG AZSA LLC)
Apr. 1989	Registered as a certified public
accountant
May 2006	Appointed as Representative Partner(currently Partner) of KPMG AZSA LLC
June 2021 Retired from KPMG AZSA LLC
May 2022	Part-time Corporate Auditor of SANYOSHOKAI LTD. (current position)
June 2022	Outside Audit & Supervisory Board
Member of the Company (current position)

Significant concurrent positions
None

Significant concurrent positions
None

Significant concurrent positions
None

Significant concurrent positions
None

Career summary
Oct. 1988 Passed the National Bar Examination
May 1991	Passed the National Medical
Practitioners Qualifying Examination
Apr. 1994	Joined T. HASEGAWA & CO., LAW OFFICES
July 1995-	Joined law offices in Chicago andLondonMar. 1998 Registered as a New York Attorney
June 2004	Specially-appointed Professor at theGraduate School of Medicine of the
University of Tokyo
Apr. 2012	Established Shinsei Sogo Law Offices,
Representative (current position)
Apr. 2015	Director of National Cancer Center Japan(- March 2023)
Dec. 2018	Regent at Tokyo Medical University(current position)
June 2019	Outside Audit & Supervisory Board
Member of the Company (current position)

Number of shares of the Company held
17,200 shares

Number of shares of the Company held
29,800 shares

Number of shares of the Company held
15,400 shares

Number of shares of the Company held
10,600 shares

Significant concurrent positions
None

Significant concurrent positions
None

Attendance at the Board of Directors meetings
15/15 (100%)

Attendance at the Board of Directors meetings
15/15 (100%)

Attendance at the Board of Directors meetings
15/15 (100%)

Number of shares of the Company held
5,700 shares

Significant concurrent positions
Outside Audit & Supervisory Board Member of
SANYO SHOKAI LTD.

Attendance at the Board of Directors meetings
15/15 (100%)

Number of shares of the Company held
15,800 shares

Significant concurrent positions
Representative of Shinsei Sogo Law Offices,
Regent at Tokyo Medical University

Attendance at the Board of Directors meetings
15/15 (100%)

Attendance at the Board of Directors meetings
15/15 (100%)

Number of shares of the Company held
0 shares

Number of shares of the Company held
0 shares

Attendance at the Audit & Supervisory meetings
16/16 (100%)

Attendance at the Audit & Supervisory meetings
16/16 (100%)

Attendance at the Board of Directors meetings
15/15 (100%)

Attendance at the Board of Directors meetings
11/11 (100%)

Attendance at the Audit & Supervisory meetings
16/16 (100%)

Attendance at the Audit & Supervisory meetings
9/9 (100%)

Skills Matrix of Directors and Audit & Supervisory Board Members
Outside Independent Director

Outside Independent Director

Outside Independent Director

Outside Independent Director

Yoji Shimizu

Tatsuo Ishihara

Akihiro Sato

Hiromi Sanada

Career summary
Apr. 1970	Joined the ASATSU INC.*
Mar. 2005	Director, Operating Officer of
ASATSU-DK INC.*
Mar. 2010	Representative Director, President of
ASATSU-DK INC.*
Mar. 2013 Director, Advisor of ASATSU-DK INC.*
June 2014	Outside Director of the Company(current position)

Career summary
Oct. 1977	Passed the National Bar Examination
Apr. 1980	Appointed as Public Prosecutor of Tokyo
District Public Prosecutors Office
Apr. 1987 Registered as an attorney-at-law
Jan. 1989	Established Okinobu & Ishihara Law
Office* (current position)
June 2016	Outside Director of the Company(current position)* Current ADK Marketing Solutions Inc.

* Currently renamed to Spring Partners

Career summary
Oct. 1987 Passed the National Bar Examination
Apr. 1990 Registered as an attorney-at-law
Apr. 1990 Joined Marunouchi Kyoritsu Law Firm
May 1995	Established Akihiro Sato Law Office
Representative of Akihiro Sato Law
OfficeDec. 2016	Outside Audit & Supervisory Board
Member of the Company
June 2019	Outside Director of the Company(current position)
June 2023	Partner at Shinwa Sohgoh Law Offices(current position)

Career summary
Apr. 1979	Internal Medicine Ward, St. Luke’s
International Hospital
Apr. 1980 Kanazawa University Hospital
Apr. 1987	Research Student of Faculty of Medicine,
Kanazawa University (March 1997 Ph. D (medical))Nov. 1998	Professor of Adult Nursing, Kanazawa
University
Apr. 2004	Professor of Gerontological Nursing, The
University of Tokyo
Apr. 2017	Director of Global Nursing ResearchCenter, The University of Tokyo
Apr. 2022	President of Ishikawa Prefectural
Nursing University (current position)
June 2022	Professor Emeritus of The University ofTokyo (current position)
June 2022	Outside Director of the Company(current position)

Name

Positions and responsibilities at
the Company

Toshiaki Takatsu

President

Hironori Sakai

Executive Director

Hideaki Hara

Yoji Shimizu

Outside Director

Tatsuo Ishihara

Outside Director

Akihiro Sato

Outside Director

Hiromi Sanada

Outside Director

Outside Audit & Supervisory
Board Member

Attendance at the Board of Directors meetings
11/11 (100%)

Atsushi Fukuda

Outside Audit & Supervisory
Board Member

Number of shares of the Company held
0 shares

Number of shares of the Company held
0 shares

Number of shares of the Company held
0 shares

Attendance at the Board of Directors meetings
15/15 (100%)

Attendance at the Board of Directors meetings
15/15 (100%)

Attendance at the Board of Directors meetings
15/15 (100%)

Finance/
Accounting

Legal/Riskmanagement

●

●

●

●

●

●

●

●

●

●

●

●

●

●

R&D

●
●

Manufacturing/Marketing/Sales
Technology

●

●

●

●

●

●

Audit & Supervisory Board

Yasushi Kodama

Significant concurrent positions
President of Ishikawa Prefectural Nursing University

Skill
Corporate
management

Kazunori Takahashi Member

Number of shares of the Company held
0 sharesSignificant concurrent positions
Partner at Shinwa Sohgoh Law Office●Yasuhiko Takahashi Director, Managing Officer

Audit & Supervisory Board
MemberSignificant concurrent positions
Representative of Spring Partners●

Director, Managing Officer

Kazuhiko Tomioka

Significant concurrent positions
None

Nomination andRemuneration
Committee●●●

Internationality

●

●
●

●

●

●

●

●
●

●

●

●

•

* The “ ” symbol in the skills matrix are listed based on past knowledge and experience, and do not represent all the knowledge and experience possessed by the subject.

48

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49

Initiatives for Corporate GovernanceInitiatives for Corporate Governance—Corporate GovernanceCorporate Governance
Board Effectiveness Evaluation

Basic Approach
We aim to enhance management soundness and efficiency bydeveloping an internal control system to facilitate the effectivefunctioning of corporate governance. The Board of Directors comprises
eight members, of which four are outside directors. Management
strategy meetings and management execution meetings are also held
for the purpose of strengthening the functions of the Board. The Audit &Supervisory Board liaises with the Internal Audit Division and theaccounting auditor to conduct audits of the management. Also, to ensurethat we are in compliance with laws, the articles of incorporation, andinternal regulations, we have established an Internal Control Committee
and an ethics violation consultation hotline.

Corporate Governance Structure

General Meeting of Shareholders
Election and dismissal[Management]

Election and dismissal

Nomination andRemuneration Committee
Consult

Recommend

ReportSustainability Committee
BCP Committee

Management
and Direction

Management Execution
Meeting

Accounting audit

ReportAppointment and dismissal

ReportPresident andRepresentative Director

Management Strategy
Meeting

Audit & Supervisory Board
4 Audit & Supervisory Board Members(2 of whom are outside Audit &Supervisory Board Members)

Operational audit

Board of Directors
8 directors(4 of whom are outside directors)

Election and dismissal

Cooperation

Accounting auditors

Accounting audit

Internal Control Committee

ReportCooperation

Divisions and business divisions

Business divisions

50

Nichiban Group Integrated Report 2023

Developing a framework to accurately recognize the threats
and risks of cyber-attacks and safeguard critical informationthat forms the cornerstone of our operations
2. M
 ultifaceted feedback training for management personnel
Strengthening the leadership and management capabilities
of managers

Remuneration is linked to shareholder interests so that it functions as anincentive for sustained improvements in corporate value. Our basic policy
is to establish appropriate levels based on responsibilities in order todetermine the remuneration for each director. Remuneration for
executive directors consists of basic remuneration based on position,
responsibilities, and experience, as well as performance-linked
remuneration. The latter includes bonuses (short-term incentives) paid
annually and a medium-to-long-term incentive paid once within acertain period based on the medium-term management plan, provided
in the form of restricted stock (non-monetary remuneration) that is
subject to transfer restrictions on some or all of the shares granted.
Compensation for outside directors tasked with a supervisory roleconsists only of basic compensation in light of those duties. The
individual compensation amounts for directors are deliberated by the
Nomination and Remuneration Committee, which then makes
recommendations to the Board of Directors for approval.

Total amount of
remuneration(¥ million)

Total amount by type of remuneration (¥ million)
Fixed remuneration

Whistle-blowing

Corporate Lawyers
Whistle-blowing

Board of Directors
The Board of Directors consists of eight members (of which four areoutside directors). We have also introduced an operating officer system
for the execution of business operations.
The Board meets once a month to basically ensure that thedirectors perform their duties efficiently. Extraordinary meetings are held
whenever necessary. Management strategy meetings are also held twicea month, chaired by the representative director, to discuss basic
strategies, policies, and various measures related to management inadvance, thereby promoting the swift and efficient implementation ofmanagement activities. Moreover, to further strengthen the functions of
the Board of Directors, a management execution meeting is held once amonth, attended by the directors, managing officers, and senior
operating officers. Basic items and important matters concerningbusiness execution are discussed during the meeting.
Audit & Supervisory Board and Internal Audit Division
We employ a corporate auditor system centering on an Audit &Supervisory Board, which comprises four members, including two outside
auditors. We have also established an Internal Audit Division (comprising
two members) that reports directly to the president.

1. IT security training concerning business operations

Executive Remuneration

Category

Whistle-blowing

Ethics Violation Consultation Desk
(Whistle-blowing System)

Training for executives

Remuneration Amounts for Directors and Audit & Supervisory Board Members

Operational audit

Group companies

General Manager ofGeneral Affairs Department

Cooperation

Internal Audit Division

The Board of Directors assesses, analyzes, and verifies the effectivenessof the Board overall. In fiscal 2022, all directors and auditors weresurveyed about the makeup and operations of the Board of Directors,
and based on the results, deliberations were carried out by the Board of
Directors. As a result, the composition, operations, and deliberations of
the Board of Directors were assessed to be more or less appropriate as aframework for the Board to perform its supervisory functions and that its
effectiveness has been ensured. Going forward, we will continue to workon improving the effectiveness of the Board of Directors, focusing mainlyon the chairperson and the secretariat.

The auditors attend Board meetings and other important meetingsand conduct audits of the execution of duties by directors from an
objective and independent standpoint.
The Internal Audit Division is responsible for auditing all aspects ofmanagement in accordance with the Internal Audit Rules. By conducting
regular audits of accounting, operations, and efficiency, including at
subsidiaries, it aims to detect operational deficiencies that ought to
be avoided in management, enhance management efficiency, andcontribute to the safeguarding of company assets.
Nomination and Remuneration Committee
We have established a Nomination and Remuneration Committee as anadvisory body to the Board of Directors for the purpose of enhancing
corporate governance and the fairness, transparency, and objectivity ofprocedures pertaining to the nomination and compensation of directors.
The Nomination and Remuneration Committee is made up of threeor more directors selected by resolution of the Board of Directors. The
majority of members are independent outside directors, one of which
has been selected to serve as chairperson by resolution of the Boardof Directors.

Number of eligible
officers

Performance-linked bonus
Monetary reward

Non-monetary reward

Directors(of which are outside directors)

110
(28)

86
(28)

18
(—)

5
(—)

9
(4)

Audit & Supervisory Board Members(of which are outside Audit & Supervisory Board Members)

42
(10)

42
(10)

—

—

5
(3)

Notes: 1. The remuneration amount for directors does not include remuneration for directors who concurrently hold a key position in the
Company.
2. The total amount of remuneration includes director bonuses of ¥24 million (for four directors) that were recorded as provisions
for director bonuses and stock-based remuneration during the current fiscal year.
3. The payment of performance-linked remuneration is dependent on the attainment of metrics that measure performance. Thosemetrics are the KPIs important to the Nichiban Group, such as consolidated operating income and consolidated operating
income margin, as well as the indicators directly linked to the achievement of our longer-term vision, including the new productratio, the overseas sales ratio, and the stock growth rate.
Results for the indicators pertaining to performance-linked remuneration for the current fiscal year are shown on the right.

Performance metrics
Consolidated operating income

Results¥1,609 million

Consolidated operating income margin

3.6%

New product ratio

4.4%

Overseas sales ratio

10.1%

Stock growth rate

112.0%Development of Internal Control System

Internal Control Committee

By developing an internal control system for the Nichiban Group basedon a basic policy adopted by the Board of Directors, we are endeavoring
to ensure proper business operations and to establish strong corporate
value by ensuring the reliability of various information, including financial
reports.

We have established an Internal Control Committee as a governing bodyto oversee matters of mainly compliance and corporate governance.
Chaired by the president, it meets every six months to review importantmatters and improvement measures related to internal controls. It also
discusses timely disclosure and Company-wide risk management, andtakes steps to strengthen and improve the internal control system.

Nichiban Group Integrated Report 2023

51

Initiatives for Corporate GovernanceInitiatives for Corporate Governance—Compliance/Risk Management/Information Security

Compliance

Risk Management

Approach

Basic Policy

We have established the Nichiban Group Ethics to foster a shared compliance mindset among all employees.

We take predictive and preventive measures in advance to avoid any kind of major crisis that could jeopardize business continuity. However, in the eventa crisis does occur, we manage it properly and ensure business continuity/stable development by keeping the damage to a minimum and taking steps toprevent a recurrence.

Nichiban Group Ethics

Risk Management System

We recognize that corporations are public instruments for the benefit of society and we will fulfill our social responsibilities by undertaking activities basedon the following action guidelines.
Action Guidelines

4. Thoroughgoing information management and disclosure

1. Compliance with laws and regulations

We will properly manage and protect all information related to theWe will abide by the law, adhere to social norms, and engage in fair andNichiban Group and will disclose corporate information in a timely andtransparent corporate activities.

appropriate manner.

2. Providing useful, safe, and reliable products

5. Strict adherence to ethics

We will place the utmost emphasis on quality, safety, and theManagement will lead by example to establish an internal frameworkenvironment, and by improving customer satisfaction through ourand ensure it is widely understood and implemented in keeping with the

products, we will build the trust of customers and contribute to society.

spirit of the Nichiban Group Ethics.

We will take a firm stance against antisocial behavior that threatens theorder and security of civil society.

Ensuring Compliance
We have produced a Nichiban Group Action Handbook anddistributed it to all Group employees as a way of providing
concrete guidance on how the Nichiban Group’s ethics
should be put into practice. The handbook is reviewed
every year so that it is always up to date with evolving social
conditions and changes in laws and regulations. We also

make sure employees have a thorough understanding of it
during training sessions and meetings.
Also, in an effort to raise awareness of compliance, weoffer numerous e-learning programs related to compliancethat employees can access anytime and from anywhere.

List of e-learning compliance training modules

Nichiban Group Action Handbook• Proper disposal of industrial waste• Risk management• Learning from recent cases: Personal information protection• Food safety and security compliance: Food labelling and false advertising• Considering organizational culture: Corporate ethics and compliance• Insider trading regulations• Introduction to subcontracting laws
• Introduction to truth-in-advertising laws
・Introduction to intellectual property: Copyright, trade secrets,
trademarks, and company names
・Introduction to anti-trust laws
・Preventing consumer disputes: Introduction to specified commercial
transactions laws

risks and reports its findings to the Board of Directors. Also, we haveestablished a BCP Committee chaired by the General Manager of the
Supply Chain Division for the purpose of addressing risks related tobusiness continuity.

Risk Management Structure

Board of Directors
Reports

Supervision and guidance
Climate change risks

Sustainability
Committees

3. Standing firmly against antisocial behavior

Risks that need to be managed on a Company-wide level are handled by
the General Affairs Department, while climate change and environmental
risks are addressed by the Sustainability Committee. Chaired by the
director in charge of CSR, this committee analyzes and examines these

Organization in chargeof risk management

Basic Policy

Committees
Departmentsin charge

Environmental risks

Sustainability Committee
Corporate Planning
Division

Quality & Environment
Management Department

Business risks

BCP Committee
Supply Chain Division
Production Division

Company-wide risk management: General Affairs Department

Emergency Response Drills
We have established a set of Emergency Response Rules so that the rightdecisions can be made swiftly in the event of an emergency situationthat poses a threat to the lives and well-being of employees and otherparties or an emergency that could significantly impede or affect ourbusiness activities. Once a year, based on the scenario that a disaster has
occurred, we run a training drill to practice setting up and operating

emergency response units for the entire organization and at eachbusiness site with the aim of minimizing harm to employees anddamage to Company property, and the impacts on the safety andenvironment of the areas around our business sites. In addition, we
conduct emergency response training using a safety confirmation systemand emergency radios.

Establishment of BCP-driven Stable Supply Structure
In the Nichiban Business Continuity Management Regulations, we haveprescribed guidelines for the kinds of actions and measures that shouldbe implemented during each stage; namely, when a disaster has
occurred, when business has resumed, and when business is continuing.
In light of climate change and heightened geopolitical risks in recent
times, the BCP Committee is studying risks across the entire supply chain

and focusing on measures to ensure we can make good on our productsupply responsibilities. For example, it is mapping manufacturers of raw
materials, assessing the risks associated with procuring specialized andrare materials, and responding to the risks identified in TCFD scenario
analyses.

Information Security

Enhanced Whistle-blowing
We have set up two consultation channels through which
employees can report ethical violations and instances ofharassment. The ethical violations hotline is staffed by theGeneral Manager of the General Affairs Department, corporate
auditors, and external legal advisors. It serves as a general pointof contact for compliance-related concerns with the aim ofidentifying instances or potential cases of legal violation.

52

Nichiban Group Integrated Report 2023

For the harassment reporting channel, a dedicatedhotline has been established at each business site, thus
making it easier for employees to report issues. Moreover,in order to deepen the understanding of harassment, werun training sessions to improve the skills of the personnel
that man the reporting channel.

Development of IT Controls
Information technology has become indispensable to business strategy
and the quality of information systems achieved with the use of IT now
has a significant impact on management. By developing and deploying
IT controls, we can carry out appropriate self-assessments and audits
around IT strategy, development, and operations. This is reinforcing IT

governance throughout the Nichiban Group, whilst also properly
controlling risks pertaining to information systems. We have establisheda Group IT Liaison Committee to facilitate the sharing of information
between Group companies and to monitor how the proprietary systemsof each company are being operated.

Nichiban Group Integrated Report 2023

53

Initiatives for Corporate GovernanceInitiatives for Corporate Governance

Messages from Outside Directors
Our four outside directors were asked to share their messages from the perspective of the role that outside directors should play in the NichibanGroup’s continued growth, management in general, issues facing the Board of Directors, and committee activities.

1 How do you see your role as an outside director in light of your professional history and knowledge?
2 What issues do you see facing management in general and the Board of Directors in particular, andQuestions54

what is your response?
3 What are some issues related to the effectiveness of the Board of Directors and the governance system?
4 What activities do the Nomination and Remuneration Committee engage in?
5 What are your expectations for the Nichiban Group in the future?

Outside Independent Director

Outside Independent Director

Outside Independent Director

Outside Independent Director

Yoji Shimizu

Tatsuo Ishihara

Akihiro Sato

Hiromi Sanada

1  I was with the advertising agency ASATSU-DK INC. for more than

1  After being appointed a public prosecutor of the Tokyo District

1  As an attorney, I have been involved with companies in various

1  I recognize that I must contribute to creating innovation and global

40 years starting in 1970, working my way up from employee todirector and engaging in corporate management. I believe it isimportant to continue to exercise supervision over Nichiban Groupmanagement and make recommendations to improve profitability
and enhance corporate value.
2  There are specific systems in place regarding knowledge and theprovision of information related to agenda items, with the Board
operating in an atmosphere that encourages free and vigorous
discussions. The materials used at the Board of Directors are often
based on new buzzwords and values, and as the concept ofsustainability itself is changing rapidly, it is important to input
information in advance and see eye to eye at the Board of Directors.
3  In order to enhance the effectiveness of outside directors, including
myself, after ensuring their definition, evaluation, fairness,transparency, and speed, improvements are being made based on
the Nichiban Group's Diversity and Inclusion Policy. We formulated
the medium- to long-term vision “NICHIBAN GROUP 2030 VISION”
and the medium-term management plan “ISHIZUE (foundation)
2023 ~SHINKA (evolution/deepening)·HENKAKU (reform)~” toachieve effective strategic themes and enhance corporate value,
while at the same time, we check the progress of the current
medium-term management plan every six months to monitor
degree of achievement, and encourage and supervise thesustainable enhancement of corporate value.
4  The Nomination and Remuneration Committee deliberates therules governing remuneration (short-, medium-, and long-term
incentives) for duties performed by senior management and theBoard of Directors from the perspective of strengthening
governance. To ensure objectivity and transparency in theseprocedures, Board members, mainly outside directors, consult on
and determine the amount of officer remuneration. The majority of
the Board of Directors are outside directors, which ensures sufficient
objectivity, transparency, and fairness.
5  I look forward to the further
development of the Nichiban Groupnot only through the pursuit of profits,
but also through contributions toa sustainable society, creating
innovation, and global expansion.

Public Prosecutors Office and working at various prosecutors'
offices, I registered as an attorney and have spent more than 40
years as a legal professional. As a prosecutor, I had to decidewithin a certain time frame whether or not to prosecute a wide
range of cases, and through this experience, I naturally acquireda sense of balance in matters. As we constantly encounter a wide
variety of situations and interests in the course of business,
I believe that I can provide insight to help determine whether there
are any problems with the decisions that need to be made in
specific situations.
2  Although Board of Directors are conducted in an open atmosphere,
it would be better if, in addition to monthly results, the Company
would introduce concepts and other information that emphasize
future business developments.
3  The Board of Directors has been functioning effectively for sometime, and the addition of a female outside director with expertise inhealth and nursing has further improved the effectiveness of theBoard from the perspective of diversity. The medium-term
management plan “ISHIZUE (foundation) 2023 ~SHINKA(evolution/deepening)·HENKAKU (reform)~” considers thedevelopment of human resources to be the most important factor
for sustainable growth in the future, as the ability to retain anddevelop excellent human resources is essential for achieving thelong-term enhancement of corporate value.
4  The Nomination and Remuneration Committee meets as needed,
but because outside directors have limited knowledge andinformation about the organization, the Committee receives
proposals from the President and other Company officers, andconfirms that these proposals are objective, transparent, and fairthrough a question-and-answer session focused on their reasoning
and rationale, before passing resolutions at Board meetings.
5  As a centennial company, the Nichiban Group has earned a solid
reputation in society alongside its
signature products, and I expect the
Nichiban Group to continue to growand advance through the developmentof new products that are sensitive tothe needs of society, while proactively
promoting its business overseas, where
there is great potential for growth.

industries in the field of business legal affairs, focusing on corporate
law including M&A, and have served as an outside director of othercompanies. The Nichiban Group expects me to utilize knowledge
based my backbone and experience to provide a wide range ofappropriate and reasonable advice and recommendations from an
independent and objective standpoint.
2  At the Board of Director, various issues related to overallmanagement are generally brought up in a timely manner anda lively exchange of opinions takes place.
3  In addition to the foundational cellulose tape business, theNichiban Group’s healthcare business has grown significantly inrecent years, but the business environment is changing rapidly and
we are increasingly required to make difficult business decisions inboth of these areas. I believe the Board of Directors must adopt
a global perspective and make proactive and bold decisions witha cautious yet risk-taking approach in order to enhance corporate
value over the long term.
4  The medium-term management plan “ISHIZUE (foundation) 2023
~SHINKA (evolution/deepening)·HENKAKU (reform)~” sets
appropriately high goals that we expect will be communicated toall employees so that they work together as one. The Nomination
and Remuneration Committee also discusses this plan to ensuretransparent and fair personnel and remuneration assessment.
5  As a traditional company with a distinctive product lineup utilizing
adhesive technologies represented by adhesive bandages, there is
still potential for growth. Going forward, I expect Nichiban to bea Company that proactively promotes human resources withdiverse backgrounds and expertise, while all employees proactively
take on challenges, sometimes without fear of failure, to develop
new products and explore new fields, including expansion into
global markets and e-commerce.

expansion, which are key themes in the medium-term
management plan “ISHIZUE (foundation) 2023 ~SHINKA(evolution/deepening)·HENKAKU (reform)~.” As a professor at theGraduate School of Medicine and Faculty of Medicine, The
University of Tokyo, and as former President of the JapaneseSociety of Pressure Ulcers among other academic societies, I havebeen involved in research and development in the medical andnursing fields for more than 30 years, and will provide expert
advice on creating innovation in the healthcare business. The new
product CATHEREEPLUS™ ECHO, an echo-guided puncture fixation
dressing, is the result of a collaboration with The Society for Nursing
Science and Engineering, where I served as chairperson. I have also
conducted many joint projects with Asian and European
universities through the establishment of the Global Nursing
Research Center at the University of Tokyo. Drawing on thisbackground, I intend to support the establishment of a foundationfor overseas business.
2  Many women play active roles in the healthcare and medical fields,
including nursing positions. In developing products in these fields,
ideas from a woman's perspective and a working environment
viewed from the standpoint of female employees are important.
I will strive to ensure that female opinions, proposals, and otherperspectives are reflected in senior management decision-making.
3  As the Nichiban Group is committed to management that values“people,” it has been certified as a 2023 Japanese Health &Productivity Management Outstanding Organization by the
Ministry of Economy, Trade and Industry. I would like to apply myknowledge and networks to assist these innovation efforts ofhuman resource management.
5  I will continue contributing to market expansion through support
for the creation of new products by promoting creating innovationand global expansion, which will become the engine ofsustainable growth.

Nichiban Group Integrated Report 2023

Note: The response to Question 4 has been omitted,
as Ms. Sanada is not a member of theNomination and Remuneration Committee.

Nichiban Group Integrated Report 2023

55

Eleven-year Financial and Non-financial Summary

Eleven-year Financial and Non-financial SummaryYears ended March 31(Millions of yen)

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

Financial summary
Results of operations
Net sales

38,50240,22539,892

42,46144,145

46,23447,41744,063

41,52843,13445,560Operating income

1,773

1,789

2,161

3,360

4,057

4,419

3,684

2,975

2,000

2,450

1,609

Ordinary income

1,801

1,858

2,267

3,490

4,274

4,626

3,860

3,095

2,070

2,561

1,748

988

989

1,311

1,827

3,107

3,132

3,193

1,751

1,350

1,809

2,371

Capital investment

2,747

2,495

1,818

3,586

5,818

6,489

2,054

1,455

2,755

3,981

4,092

Depreciation and amortization

1,741

1,787

1,385

1,603

1,792

1,960

2,327

2,352

2,342

2,545

2,757

993

1,004

1,008

1,108

1,153

1,241

1,184

1,067

1,064

1,057

1,110

Cash flows from operating activities

3,075

2,666

2,547

4,406

3,899

3,228

5,584

5,749

5,911

4,064

2,917

Cash flows from investing activities(3,008)(1,242)(1,948)(1,963)(5,349)(5,039)(4,743)(1,380)(3,067)(2,898)(1,153)

Cash flows from financing activities

(439)

(469)

(468)

(589)

(636)

(934)

(979)

(916)

(772)

(691)

(867)

67

1,424

599

2,443

(1,450)(1,811)

841

4,369

2,844

1,166

1,764

9,879

10,832

10,95912,802

10,713

7,963

7,822

11,273

13,344

13,844

14,752

Net assets

24,79225,54826,88528,14030,76633,31736,48037,21838,07838,96140,603

Interest-bearing debt

2,000

2,000

2,000

2,000

2,000

2,000

2,000

2,000

2,000

2,000

2,000

Total assets

45,801

47,21347,94352,89056,12060,75560,32959,752

61,21464,427

69,123

Net assets per share (Yen)*1

1,196.22

1,232.70

1,297.26

1,357.84

1,484.70

1,607.89

1,760.54

1,796.15

1,837.64

1,880.25

1,969.94

Net income per share (Yen)*1

47.70

47.75

63.30

88.18

149.95151.17154.12

84.54

65.15

87.34

114.67

Net income per share—diluted (Yen)

—

—

—

—

—

—

—

—

—

—

114.65

Dividends per share (Yen)

12

12

16

22

36

40

38

33

30

30

35

Equity ratio (%)

54.1

54.1

56.1

53.2

54.8

54.8

60.5

62.3

62.2

60.5

58.7

Return on equity (%)

4.1

3.9

5.0

6.6

10.6

9.8

9.2

4.8

3.6

4.7

6.0

Ordinary income / total assets (%)

3.9

4.0

4.8

6.9

7.8

7.9

6.4

5.2

3.4

4.1

2.6

Price-earnings ratio (Times)

15.3

14.5

14.5

14.9

12.3

23.1

15.2

17.7

29.4

19.5

16.8

Number of employees

1,145

1,150

1,160

1,180

1,204

1,241

1,258

1,266

1,260

1,255

1,268

Number of average temporary staff

(258)

(234)

(227)

(206)

(195)

(151)

(146)

(133)

(113)

(130)

(143)

Number of male managers

156

156

155

156

159

160

159

157

149

166

174

Number of female managers

9

10

11

10

11

11

12

13

14

16

21

Female manager ratio (%)

5.5

6.0

6.6

6.0

6.5

6.4

7.0

7.6

8.6

8.8

10.8

Employment of persons with disabilities (%)

1.4

1.2

2.0

1.8

2.0

2.1

2.2

2.2

2.4

2.5

2.3

Net income attributable to owners of parent

R&D expenses

Free cash flows
Cash and cash equivalents
Financial position at year-end

Per share information*1*2

RatiosNon-financial summary

Notes: 1. Figures for the fiscal year ended March 31, 2013 through the fiscal year ended March 31, 2017 were calculated using the number of shares after the share consolidation implemented in October 2017.
2. Dividend per share for the fiscal year ended March 31, 2018 was ¥40, including the ordinary dividend and the 100th anniversary commemorative dividend of ¥2.

56

Nichiban Group Integrated Report 2023

Nichiban Group Integrated Report 2023

57

Corporate Data (As of March 31, 2023)
Company Name
Headquarters

Nichiban Co., Ltd.
2-3-3, Sekiguchi, Bunkyo-ku Tokyo, Japan,
112-8663
FoundedJanuary 1918
Telephone+81-3-5978-5601
President
Toshiaki Takatsu
Capital¥5,451 million
Consolidated Net Sales ¥45,560 million
Number of Employees Consolidated: 1,268

Nichiban Websites
Consolidated Subsidiaries

Affiliated Companies

Nichiban Print Co., Ltd.
Nichiban Techno Co., Ltd.
Nichiban Medical Corp.
NICHIBAN (THAILAND) CO., LTD.
NICHIBAN EUROPE GmbHUNION THAI-NICHIBAN CO., LTD.
Daito Chemical Co., Ltd.
Hanyo Kako Co., Ltd.

Share Information (As of March 31, 2023)
Share information

Corporate History

Nichiban Group’s
Value Creation Process

Major stockholders

Total number of authorized shares 70,000,000 shares
Total number of issued shares
20,738,006 shares
Number of shareholders
15,466

Shareholder composition
Treasury stock 0.61%
Foreign institutions
7.66%

Individuals andothers

25.56%

Securities corporations
0.64%

Financial institutions

Domestic
corporations

28.57%

36.97%

Medium-Term Management
Plan

Number of shares held

Percentage ofshares held (%)

TAIHO PHARMACEUTICAL CO., LTD.

6,758,000

32.79

The Master Trust Bank of Japan, Ltd.
(trust account)

1,482,100

7.19

Nichiban Supplier Shareholding
Association

1,198,300

5.81

MUFG Bank, Ltd.

1,000,000

4.85

Mizuho Bank, Ltd.

Name

Medium- and Long-Term Vision

1,000,000

4.85

Custody Bank of Japan, Ltd.
(trust account)592,100

2.87

Aioi Nissay Dowa Insurance Co., Ltd.

499,500

2.42

Resona Bank, Ltd.

288,500

1.40

Dai-ichi Life Insurance Co., Ltd.

277,500

1.35

NORTHERN TRUST CO. (AVFC) RE IEDPAIF CLIENTS NON TREATY ACCOUNT

268,000

1.30

Related Policies

Sustainability

IR Information

Editorial Structure of the Nichiban Group Integrated Report 2023

Notes: 1. Percentage of shares held is calculated excluding treasury stock (126,347 shares).
2. Shareholder names represent registered names as of March 31, 2023.

Nichiban Group Philosophy
Management

Stock price and trading volume
(Yen)
4,000
3,000

Members for
the Nichiban Group
Integrated Report

Sustainability
Committee

Group companies

Nichiban Group Sustainability

2,000

Environment

1,000

SocialGovernance(Shares)
2,500,000
02,000,000
1,500,000

500,000

58

General supervision	Corporate Planning Division
Issuing department	Public Relations Department,
Corporate Planning Division

Contact

1,000,000

0Apr. 2018

Production organization

Jan. 2019

Nichiban Group Integrated Report 2023

Jan. 2020

Jan. 2021

Jan. 2022

Jan. 2023

Forward-looking statements
This integrated report contains forward-looking statements about Nichiban’s management
plans, forecasting, strategies, and performance. These statements are based upon current
beliefs in light of the information available on the issuing date of the report.

Public Relations Department, Corporate Planning Division
Nichiban Co., Ltd.
2-3-3, Sekiguchi, Bunkyo-ku Tokyo, Japan, 112-8663
Telephone: +81-3-5978-5601

Nichiban Group Integrated Report 2023

59

Nichiban Co., Ltd.
2-3-3, Sekiguchi, Bunkyo-ku Tokyo, Japan, 112-8663
https://www.nichiban.com/corp/