Sustainability ESG Management: Social Issues / Human Capital

Our Approach to Human Resources Strategy

Since its founding, Nippon Thompson has, based on the conviction that a company depends on its people, emphasized creating an environment that encourages each and every one to take on challenges confidently. With utmost priority on the health and safety of employees, nurture a well-ventilated working environment and create new values beyond the expectations of the society and customers—this is our people-centered management. In IKO VISION 2030, which we formulated in 2023 aiming for growth that is one step ahead, we positioned human resource development, appropriate placement of personnel, and diversity as the three pillars of our human resource strategy.

Human resource development
—forum for learning and deepening of dialog

Even in an era of rapid changes, each employee must keep brushing up his or her knowledge and skills. We will review the current training by level and opportunities to participate in external seminars. We also utilize e-learning materials and have frequent internal workshops to offer more diverse learning forums. We will also strengthen OJT and education by senior employees and pursue the creation of a mechanism that allows employees to note things and gain feedback in their daily operations.

Appropriate placement of personnel
—grasping the situation using data and dialog

In order to accurately grasp employee strengths and aspirations, we collect information regarding their various qualifications and history of trainings and their roles in past projects in the human resources system. The data are used in periodic interviews and career counseling. In FY2026, we may introduce a tool to measure the level of efficiency of the management method to strengthen information sharing between departments. We will ensure that assignment decisions and follow-up measures are based on objective data and not reliant on instinct.

Diversity
—developing an environment of acceptance and respect

The foundation than can truly leverage diversity in an environment where employees from differing backgrounds with different values learn from each other and demonstrate their strengths. We carry out new hire training at the manufacturing floor from April through mid-July. The employees who joined the same year strengthen their bonds while deepening the understanding of the field.

As human resources-related measures, we reviewed the qualifications system and clarified the career paths corresponding to the employees’ growth stage. Also, as part of the measures to develop a workplace where women can play active roles, we held social gatherings to offer opportunities for interaction from diverse perspectives. We also revised the senior employee system as a way to leverage the experiences and insights of a wide range of generations. In hiring, we changed the briefing material content for new hires to make it more attractive and introduced an employee referral system for mid-career hiring. We will aim to become an organization where all employees can demonstrate their individualities and capabilities as we accept more diverse human resources through multifaceted hiring channels. The Personnel and General Affairs Department will firmly implement these three pillars.

Human Resource Development

Current state of human resource development

We are committed to human resource development from a medium- to long-term perspective with high retention as our strength, and we are working on measures to enable each employee to gain various experiences based on our human resource development philosophy that “there is no better way to develop human resources than through experience.”

Specifically, OJT is the pillar of our human resource development. We encourage steady growth through an education system that carefully attends to each individual at each workplace, which embodies our sincere and earnest corporate culture. Given the nature of our business, which prioritizes solving social and customer issues, we are accelerating our growth by overcoming daily challenges. In addition, we strive to develop leaders by providing various types for different levels of employees, and also conduct practical training activities for each department.

We also focus on supporting self-development from the perspective of employee “autonomy.” We not only have an incentive system for public qualifications, but also encourage the acquisition of national qualifications such as technical skills tests, which results in the creation of many qualified employees every year. This helps in cultivating our ability to propose solutions to society and customer issues and to respond to technical issues.

Developing and producing the next generation of leaders

Global Talent Training We organically connect these separate talent training measures in order to create a whole of our talent management. In doing so, we aspire to train our employees as global human resources to lead the next generation over the medium to long term. To this end, we are working to enhance our talent development functions. More specifically, we strive to develop strategic personnel rotation based on the definition of “employees we look for,” and to train our employees to become talent for DX capable of making fundamental changes to our operations to create new value.

In addition, in FY2026, we launched the Global Talent Exchange Program as a measure for global talent development. The program provides short-term international training in Japan and overseas for eligible employees. It offers opportunities for participants to not only receive training through various experiences but learn about diverse values, which we hope will create the culture of collaboration across the Group.

Indicators	FY2023	FY2024	FY2025
Percentage of employees receiving training by job level [%]	13.6	12.6	9.5
Number of national qualifications holders [persons]	1,453	1,513	1,528

Appropriate placement of personnel

Talent management

In terms of human capital initiatives, we place great importance on developing the capabilities of each employee, while also positioning personnel allocation with the aim of maximizing organizational functions and strengthening future growth areas as key issues. Since we have employees with diverse attributes, we will maximize organizational functions by building a human resource portfolio based on a balance of human resources. We believe that in order to achieve this, it is essential to implement precise talent management, and we progressed with a project to introduce an integrated human resources system in 2025 with an eye toward introducing talent management in the future. The introduction of the system will not only lay the foundation for talent management, but will also improve the strategic functions of the HR Department by radically streamlining the HR Department’s operations.

Talent acquisition policy

We place importance on strategies to acquire new talent in anticipation of declining birthrates, aging population, and shrinking labor force. Our hiring policy is based on the awareness that diversity is a key word for our talent portfolio in terms of types of employment, skills, age, and gender, among others. We focus particularly on hiring new graduates with a view to training them over the medium to long term by leveraging our high retention rate, which is our strength. In our recruitment activities, we are keen to find applicants who meet the requirements for employment at the Company and who identify themselves with our management philosophy. What we especially look for is an emotional connection that inspires us and the applicant to work together.

We also create opportunities to communicate with job seekers through a variety of media, and motivate them to join us by developing a full mutual understanding through our selection process, so that applicants will not decline our job offers, or that new employees will not resign soon after they join us. In making these efforts, we stably acquire talent while companies fiercely compete for human resources. We will continue to work to acquire talent who will create and lead the Group’s future.

Diversity

Diversity & Inclusion (D&I)

In order to respond to the diversifying needs of society, the Group considers it a key issue to secure diversity in our human resources. We are working to develop human resources by providing fair opportunities for skill development to all human resources regardless of gender, age, nationality, work experience, etc., and to support their individual work styles. In particular, we focus on preventing career discontinuation due to childcare, and support the balance between childcare and work. We work closely with the departments that have employees taking childcare leave and the HR Department to address individual concerns as much as possible.

In FY2026, we held the workshop “Women’s Group Discussion” open to all female employees. The workshop aimed to create opportunities for participants to develop an environment where employees with different attributes feel comfortable working, and to interact with the other employees, thereby laying a foundation of leadership training for diverse talent. Through these activities, we will make further efforts to achieve the goals of increasing the number of female managers by fivefold (compared to the end of March 2022) and increasing the percentage of male employees who have taken childcare leave to 85% by FY2031.

A Male Employee's Paternity Leave Story and A Female Manager's Comments on Diversity（Integrated Report 2025）

*The above is on a non-consolidated basis. On a consolidated basis, the ratio of female employees is 39.1%, the ratio of female supervisors is 18.8%, and the ratio of female managers is 11.0% (as of March 31, 2025).

Indicators	March 31, 2023	March 31, 2024	March 31, 2025
Percentage of female employees [%]	12.8	13.3	14.5
Percentage of female supervisory positions [%]	11.9	13.1	13.2
Percentage of female managers [%]	1.5	1.9	2.8
Percentage of new female graduates hired [%]	25.8	30.8	28.6
Number of female managers (compared to the end of March 2022)	Doubled	Tripled	Quadrupled

*Wage gap between male and female employees is calculated as the average annual salary of female workers divided by the average annual salary of male workers, multiplied by 100%.
*Among non-regular employees, part-time workers' salaries are calculated by converting the actual amount paid to a full-time equivalent.

Indicators	FY2023	FY2024	FY2025
Wage gap between male and female employees (All employees) [%]	51.6	52.5	54.6
Wage gap between male and female employees (Regular employees) [%]	79.4	79.8	80.6
Wage gap between male and female employees (Non-regular employees) [%]	70.7	66.5	64.8
Male childcare leave utilization rate [%]	51.9	65.5	75.0

Engagement

The Company's human resource goal regarding diversity is not limited to D&I, but is positioned as “a corporate culture that fosters mutual recognition of value regardless of nationality, gender, or age, and a group of talent in which all employees feel motivated and are embracing change.” We are making progress with our initiatives to build a collaborative system that transcends departments and nationalities and to improve engagement.

We consider engagement to be a particularly important issue for the Company. The Company aims to develop human resources from a medium- to long-term perspective. We believe that an environment in which employees can work with peace of mind is essential to achieving this goal. In order to foster a sense of security among employees, we place great importance on employee benefits. In order to increase employee satisfaction, we work in cooperation with the labor union, with whom we maintain a good relationship, to improve various systems, such as providing housing and meal assistance. In addition, we are working to improve employee engagement by fostering individual growth aspirations and realizing career plans through interviews based on a self-assessment system and a target management system. In addition to these efforts, we will conduct engagement measurement in the future to understand our actual situation and to further improve the value of our human resources and organizational strength.

Metrics and Targets related to human capital

1. Plan period

April 1, 2025 to March 31, 2030

2. Metrics and targets related to diversity-inclusive talent development policies

[Metrics] The percentage of female employees among all full-time hires and the number of female employees in managerial positions and above

[Target 1] Steadily increase the percentage of women among all full–time hires to 20% or more

From April 2025: Hold company information sessions or internships that give priority to women at least twice a year.
From April 2026:　Conduct proactive publicity activities for job seekers to promote the workplace as one where women can thrive.

[Target 2] Increase the number of women in management positions to more than five times the number in March 2022 (approximately 1.7 times the number in March 2025).

From April 2025: Exchange opinions about women's activities for management.
From April 2026: Review the training curriculum for developing managers.
From April 2027: Provide training for women who are candidates for managers.
From April 2028: Conduct interviews about career plans for women who are candidates for managers.

3. Metrics and targets related to internal environment improvement policies

[Metrics] Annual paid leave utilization rate and childcare leave utilization rates for men and women

[Target 1] Maintain the annual paid leave utilization rate at a sustained 70% or higher for all employees, including fixed-term contract workers.

From April 2025: Communicate to managers to promote planned leave-taking.
From July 2025: Conduct awareness activities in the company newsletter to encourage the planned use of annual paid leave.
From April 2026: Continue the above initiatives.

[Target 2] Achieve childcare leave utilization rates of 85% or higher for both men and women.

From July 2025: Publicize the company's childcare leave and other support systems in the company newsletter.
From September 2025:　Revise the materials outlining the company’s childcare leave and other systems, and inform employees about them again.
From March 2026:　Confirm the status of acquisition of childcare leave, etc., and introduce examples of such acquisition to employees.
From April 2026: Continue the above efforts.

Implemented systems

Support name	Contents
Infant care leave system	Can be used up until a child reaches 2 years old.
Reduced working hours system for childcare	Work can be shortened up to two hours a day up until the end of March of a child’s third year of elementary school.
Childcare leave system	Childcare leave for when a pre-school-age child is sick or injured. Up to 5 days a year for 1 child and up to 10 days for 2 or more children. Can be used in half-day units.
Family care absence system	Up to 186 days can be used for one family member.
Reduced working hours system for family care	Working hours can be shortened up to two hours a day for one family member up to two times within a period of three years.
Family care leave system	Up to 5 days a year for 1 family member and up to 10 days for 2 or more family members. Can be used in half-day units.

External evaluation

Certified as a “Seki City Approved Workplace for Women”

NIPPON THOMPSON’s main factory at the Gifu Factory complex was certified as a “Seki City Approved Workplace for Women” by the Seki City Hall. This indicates that the Company meets 13 specific conditions including preparing and stipulating rules for child/nursing care, maternal health management for female employees, and protection for mothers.

At the Gifu Factory complex, there are currently around 500 female employees. We will make efforts to improve the environment so that employees who are raising children receive consideration at each workplace, and make it easy for them to use leave for school events and when children are sick.