Thorough Compliance and Corporate Ethics

Basic Concept

The Nisshinbo Group is working to establish corporate governance based on its corporate philosophy to ensure sustainable growth and enhance corporate value.

Also, the Nisshinbo Group included "Thorough-Going Compliance" in its Business Conduct Guidelines, which clearly states that the Group will act in constant fairness and sincerity across a broad range of issues, respecting social norms and corporate ethics, and in addition to establishing a system, will provide education to all employees.

Promotion System

Nisshinbo Holdings Inc. has adopted an organizational structure in which each functional division is headed by a Managing Officer with the aim of establishing a system to lead and oversee transformation with a sense of urgency. Under the leadership of the Managing Officer in charge of the Legal & IP Department, the Legal Group now leads activities to promote thorough compliance and corporate philosophy. In addition, based on the "Nisshinbo Group Code of Corporate Ethics," the Company has established a "corporate ethics committee" as an organization directly under the president and the director, with the president as the chief officer for corporate ethics, to handle matters related to compliance throughout the Nisshinbo Group. Business Ethics Committee members are appointed from among managers at the level of section chief or above.

Moreover, the Nisshinbo Group also established a "Corporate Ethics Reporting System" for the purpose of early detection of suspected violations of laws and regulations and the prevention of recurrence of such violations and has put in place a system to receive reports from both inside and outside the company. The Group employees can file reports directly with internal Corporate Ethics Committee members as well as to outside counsel. The Group strictly protects the confidentiality of whistleblowers and takes care not to cause any disadvantage to whistleblowers. The Corporate Ethics Committee takes appropriate action in response to the content of the report.

For an overview of our organizational structure for promoting sustainability, please see "Promotion System for Sustainability Activity".

• Promotion System for Sustainability Activity

Specific Initiatives of The Nisshinbo Group

6th Sustainability Promotion Plan (to be achieved by FY2027)

• ① Rate of compliance training participation by management-level personnel, 100%
• ② Response rate to corporate ethics reporting system, 100%

In the 6th Sustainability Promotion Plan, which targets FY2027, the Nisshinbo Group focuses on ensuring thorough compliance and sets the above two goals to achieve Raising awareness of compliance and operating the corporate ethics reporting systems.

The Group promoted activities such as compliance education, thorough confidentiality measures, and the establishment of a corporate ethics reporting system, achieving a participation rate of 99.8% for ① and appropriate responses (100%) for ②.

Nisshinbo will enhance its activities through regular compliance training to raise awareness of the importance of compliance and by continuing to respond appropriately to reports.

Please refer to "Sustainability Promotion Plan and KPIs" for details regarding of the "Sustainability Promotion Plan."

• Sustainability Promotion Plan and KPIs

Compliance Training

In order to ensure fair and honest business practices, the Nisshinbo Group conducts a variety of compliance training, such as training for different employee levels and work sites and training for employees who will receive assignments abroad.

New educational videos are released and repeated every year through the Learning Management System. In FY2025, the Nisshinbo Group conducted two compliance training sessions and released new videos to further strengthen governance and raise ethical awareness.

• ・For all group employees: Basic knowledge of compliance, importance of preventing misconduct and examples of fraud, the corporate ethics reporting system, etc.
• ・For all group managers: Compliance framework, the role of compliance officers, and global compliance, among other topics

In addition to the Japanese version, the Nisshinbo Group prepared educational materials in the five languages of English, Chinese, Thai, Indonesian, and Portuguese for distribution to all overseas group companies.

In FY2025, Nisshinbo distributed 3 videos as part of its export control training. One was an educational video for general employees, which was updated in line with the latest laws and regulations to ensure that all employees of the Group in Japan have a basic understanding of export control. The other three videos were specialized training videos for export control personnel, which were also updated in line with the latest laws and regulations, focusing mainly on points to note when determining whether an item is subject to export control and when applying special measures.

Furthermore, in response to the growing global focus on economic security, which has led to strengthened export control regulations both domestically and internationally, Nisshinbo compiles and distributes monthly updates on regulatory information and other relevant topics through each business company within the group.

Anticorruption Efforts

In recent years, international legislation on bribery and corrupt practices have been strengthened, and detection has grown more rigorous. Nisshinbo Holdings Inc. formulated the "Guide to Prevent Corruption" in response to related legislation in other countries. The Group has rolled out the guide across the Group, including all subsidiaries in other countries. This guide encompasses Article 18 of Japan's Unfair Competition Prevention Act (Prohibition to Provide Illicit Gain, etc. to Foreign Public Officers, etc.), the United Nations Convention against Corruption (UNCAC), the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, the United States Foreign Corrupt Practices Act (FCPA) and related guidelines, and the United Kingdom Bribery Act, Unfair Competition Prevention Law of the People's Republic of China, and other international anti-corruption treaties and laws, including criminal laws and anti-corruption laws in Asian countries. The Nisshinbo Group uses these measures across the entire group to prevent bribery.

Adhering Strictly to a Policy of Confidentiality

The Group has entered into confidentiality agreements with its partners to prevent leaks of intellectual property, technology and expertise disclosed throughout the supply chain from the design and development stages. To ensure appropriate trade secrets management, the Group conducts annual internal audits.

Corporate Ethics Reporting System

Guided by its Corporate Philosophy, the Nisshinbo Group endeavors to instill and firmly establish corporate ethics among all employees in all aspects of its business activities. The Group has established a "Corporate Ethics Reporting System" with the aim of promptly discovering and preventing violations of laws and regulations and alleged violations of corporate ethics.

This system accepts reports not only from employees of the Group but also from a wide range of stakeholders inside and outside the company. Employees who become aware of any violation of laws or corporate ethics by the Group, or of any conduct that raises suspicions of such violation, are advised seek consultation and report the matter. The Group will respond appropriately after investigating the facts. Concerned parties are free to consult and report anonymously; however, if they leave a name and contact information, the Group will contact them with an outline of countermeasures.

Group employees can file reports directly with internal Corporate Ethics Committee members as well as to outside counsel. The Group strictly protects the confidentiality of whistleblowers and takes care not to cause any disadvantage to whistleblowers.

Compliance-related matters for the entire Nisshinbo Group are addressed by the "Corporate Ethics Committee," which reports directly to its president. The Board of Directors receives and reviews periodic reports on important matters related to corporate ethics, including whistleblowing matters.

In the future also, through such sincere efforts, the Nisshinbo Group will strive to fulfill its social responsibility as a company and further enhance its corporate value.

Number of Compliance Violations and Corporate Ethics Reports

The number of reports made to the Corporate Ethics Reporting Desk of Nisshinbo Holdings Inc. in the past three years is as follows. The Corporate Ethics Committee responds to all reports appropriately, while ensuring that confidentiality is strictly maintained and that the whistleblower is not disadvantaged. If a violation is found, the whistleblower will be punished in accordance with the Company's employment regulations.

Corporate Ethics Reporting Desk Number of Reports

* The number of reports in parentheses is the number of confirmed violations and other specific facts.

Specific Activities of the Group Companies

Conducting Compliance Training

Every year, Japan Radio Co., Ltd., provides training for compliance officers and compliance leaders (CPLs) appointed from each department as part of its compliance education program.

In December 2025, Japan Radio invited a lawyer to conduct a roughly two-hour training session on the Freelancer Protection Act and the Act on the Fairness of Contract Transactions for Small and Medium-Sized Enterprises (SME Contract Fairness Act). The training session covered both past and current cases of legal violations. In particular, since the SME Contract Fairness Act is set to undergo significant revisions in 2026, the lawyer provided a detailed explanation of these changes. Since the company’s employees rarely have the opportunity to speak with lawyers in their daily work, a Q&A session was held at the end of the training session, and participants felt it was a highly productive session. Additionally, for personnel involved in work related to the SME Contract Transactions Fairness Act and the Promotion Act, e-learning courses and comprehension tests were provided wherein they were divided into sessions for general staff and management. Significant results were confirmed for each group based on their respective roles.

Japan Radio will continue to offer regular training sessions and will strive to prevent compliance risks.

Implementation of Training for All Employees to Prevent Misconduct

To foster a healthy corporate culture, JRC Tokki Co., Ltd., continues to provide harassment and compliance training twice a year. In addition to these efforts, the CSR Promotion Office led a fraud prevention training program using real-life misconduct cases for all employees in FY2025 with the aim of further strengthening corporate governance.

For this training session, JRC Tokki adopted audio-based educational materials developed in-house by the CSR Promotion Office based on recent cases of inappropriate billing that have become major social issues. By adopting a style where employees can concentrate on learning at their desks during breaks, each participant was able to view the background and risks of these scandals as a personal concern, thereby deepening their understanding. Additionally, JRC Tokki conducted interviews following the training to evaluate its effectiveness and to confirm changes in employee awareness. By consistently implementing this process, the company is ensuring the effectiveness of its training programs.

JRC Tokki will continue to closely monitor social trends, enhance its organizational integrity and risk awareness, and rigorously prevent misconduct. Through these efforts, the entire organization is committed to earnestly meeting the trust and expectations of our customers.

Corporate Ethics Month Initiatives

The KOKUSAI DENKI Electric Group designates an annual Corporate Ethics Month to foster a strong sense of ethics and compliance, which is the foundation of its business activities, and carries out Group-wide initiatives during this period.

In October 2025, the President and Representative Director of KOKUSAI DENKI Electric Inc. issued a message to all group employees regarding the mindset required to remain a company trusted by society and the importance of making honest judgments in daily operations. That same month, Goyo Electronics Co., Ltd., held group discussions at the department and section levels using case studies to deepen employee understanding of ethical issues that may arise in the workplace and to exchange views on appropriate conduct. All 394 employees participated in these initiatives, which served as an opportunity to reaffirm corporate ethics as a personal responsibility.

Going forward, the group will continue to deliver sustainable growth and uphold public trust through fair and transparent business practices.

Initiatives to Strengthen Its Compliance Framework

KOKUSAI DENKI Electric Linear S/A in Brazil provides regular compliance training for its employees with the aim of raising compliance awareness and ensuring strict adherence to corporate ethics. In addition, every October, the CEO issues a compliance message to all employees to ensure that top management consistently emphasizes the importance of legal compliance and ethical conduct.

The company has also established an internal reporting channel to ensure that employees are comfortable discussing and reporting any concerns they may have. This channel allows for both real-name and anonymous reporting, and employees can use it to report unethical behavior, such as misconduct or harassment.

Through these initiatives, KOKUSAI DENKI Electric Linear aims to maintain and improve a healthy and transparent corporate culture.

Cybersecurity Drill Simulating a Ransomware Attack

Nisshinbo Micro Devices Fukuoka Co., Ltd., conducts information security tabletop exercises to ensure an appropriate initial response in the event of a cyberattack.

In November 2025, 20 participants, including all section chiefs and former members of the IT Innovation Section, took part in a training exercise based on a scenario simulating a ransomware infection originating from spam email. The training used information aligned with the cybersecurity incident response checklist for information systems published by Nisshinbo Micro Devices Inc., and participants reviewed each step of the response process in a tabletop exercise. The company has been conducting these scenario-based drills continuously since 2024, and this drill was the second such session. By allowing participants to experience firsthand the specific actions required in the event of an incident, the drill heightened employee awareness of ransomware attacks as a personal concern. Furthermore, the drill identified challenges related to the development of our business continuity plan (BCP) environment, and Nisshinbo Micro Devices Fukuoka is currently implementing systematic improvements.

Nisshinbo Micro Devices Fukuoka will continue to work on improving its cybersecurity capabilities through annual training exercises.

Holding of the EHS (Environment, Health, and Safety) Planning Meeting

Nisshinbo Saeron (Changshu) Automotive Co., Ltd., in China conducts thorough reviews of regulatory compliance during its monthly EHS (Environment, Health, and Safety) planning meetings.

This meeting serves as a vital forum where senior management and 12 on-site supervisors gather to share the current status and challenges of regulatory compliance with the aim of early detection and appropriate response to EHS risks in business operations. In the first half of the meeting, Nisshinbo Saeron (Changshu) Automotive gathers information on new and amended EHS laws and regulations and assesses their impact. The company constantly monitors trends in legislative amendments at the national and local levels, analyzes their potential impact on business in advance, and plans the necessary organizational preparations, capital investments, and training programs prior to the enforcement of new laws and regulations, thereby enabling an immediate response once the amendments take effect. In the latter half of the meeting, Nisshinbo Saeron (Changshu) Automotive rigorously verified that the issues identified the previous month had been resolved, ensuring that the check phase of the PDCA cycle was effectively implemented. Through this monthly review system, the company has shifted from a reactive to a proactive approach to EHS management, thereby minimizing the risk of regulatory violations and ensuring sustainable business operations.

Nisshinbo Saeron (Changshu) Automotive will continue to respond swiftly to changes in laws and regulations and fulfill its responsibility for the safety of all employees and environmental conservation.

Activities to Strengthen Internal Controls at Overseas Offices in FY2025

Nisshinbo Mechatronics Inc. implemented internal control enhancement initiatives across all seven of its overseas subsidiaries with the aim of strengthening governance and reducing the risk of fraud at its overseas group locations.

The company identified petty cash management, bank transfer approval procedures, centralization of authority, and supplier selection as key management priorities and worked to inspect and improve management practices at each location. In addition, Nisshinbo Mechatronics held regular meetings (once every six months) with management and administrative department heads at each location; the first meeting focused on reviewing the management status, refining regulations, and identifying challenges, while the second meeting was dedicated to sharing progress on improvement initiatives. This effort helped identify variations in control standards across locations as well as common challenges and led to concrete improvements in the streamlining of approval processes. Furthermore, the company has implemented a monitoring system at Nisshinbo Mechatronics (Shanghai) Co., Ltd., in China to strengthen controls by monitoring transactions requiring special attention and reversed entries.

Nisshinbo Mechatronics will review its priority areas again in FY2026 and continue to pursue continuous improvement.

Initiatives to Mitigate Regulatory and Intellectual Property Risks

Nisshinbo Chemical Inc. systematically assesses risks related to legal regulations and intellectual property from the early stages of development in order to ensure compliance with laws and regulations and to mitigate the risks associated with its business.

From a compliance perspective, Nisshinbo Chemical appropriately verifies compliance with the variety of environmental, occupational safety, and health regulations pertaining to products, raw materials, facilities, and operations; confirms compliance with the chemical substance regulations of the RoHS and REACH; determines whether items are subject to export controls; and verifies compliance with logistics-related laws and regulations. Furthermore, from an intellectual property perspective, the company conducts prior art searches and verifies the status of its own intellectual property rights. It then assesses the risk of infringement and works to identify and avoid such risks during the design specification and raw material selection stages. The relevant departments collaborate to systematically and continuously review these matters across departments at each stage of design and development. In addition, the company conducts appropriate reviews and improvements as necessary to ensure proper operations.

Through these initiatives, Nisshinbo Chemical is steadily promoting business activities that are honest and reliable, based on strict compliance with laws and regulations and corporate ethics.

Implementation of Ongoing Compliance and Corporate Ethics Training for Managers

Since 2024, the Chiba Plant of Nisshinbo Chemical Inc. has been providing ongoing training for managers with the aim of ensuring strict compliance with regulations and corporate ethics.

The training topics cover a wide range of areas, including safety and health, the environment, legal compliance, and labor management, as well as marketing and intellectual property. As a general rule, these sessions are held once a week. Managers from each business unit take turns serving as instructors. After reviewing the relevant laws and internal regulations pertaining to their specific duties and areas of expertise in advance, managers then provide explanations, share past case studies, and review compliance requirements. Through this initiative, Nisshinbo Chemical is working to enhance each manager’s understanding of the subject matter, while also fostering a shared understanding by discussing internal rules and regulations and revising them as necessary. In FY2025, in addition to the 11 managers on staff, the company expanded participation to include frontline staff, depending on the topic, and implemented such measures as sharing educational materials, managing training records, and conducting follow-ups.

Through this initiative, Nisshinbo Chemical aims to instill a culture of compliance and high ethical standards throughout the organization, with the goal of achieving sustainable business operations that earn the trust of society.