Enhancing Employee Engagement

Last updated: September 2026

Initiatives to Enhance Employee Engagement

We consider “employee engagement” an important factor in improving employee retention and maximizing productivity and added value. First, through Purpose Fastening, we strengthen the connection between individual employees and the Company, and we review our personnel systems and working styles as needed in order to create a workplace where every employee can thrive.
As for the personnel system, we introduced the “Nifco-style Job-Based Personnel System” at Nifco Inc. on a non-consolidated basis in FY2024, thereby clarifying the role of each managerial position and revising the system to appoint individuals capable of fulfilling each role, regardless of age or experience, and to treat them according to their roles. At the same time, we reviewed the compensation system and levels to strengthen market competitiveness, reduce attrition among talented employees, and promote hiring from the outside. Globally as well, the Group periodically revises compensation in each country and region to maintain sufficient market competitiveness.
With regard to working styles, we are promoting the creation of a workplace environment that supports the sustainable development of our business while maintaining high levels of employee engagement. To this end, we are expanding working-style options and enhancing our leave programs, including more flexible flextime arrangements, expanded leave programs and a telework program that allows employees to choose to work either at the office or from home. In addition, the effectiveness of these various measures to improve employee engagement is checked periodically in the Global Employee Engagement Survey conducted every other year.

• *

  “Sustainable Engagement” is a metric within the framework developed by WTW (Willis Towers Watson), measured by responses to multiple questions about support for the Company’s management goals, pride as an employee, and motivation, a sense of fulfillment and vitality in their work.

---

Promotion of Internal and External Branding Initiatives

The Company promotes a variety of internal and external branding initiatives with the aim of raising awareness of its corporate value both inside and outside the Company, expanding its business, and securing high-quality human resources over the long term.
“Town Hall Meetings,” which provide opportunities for direct dialogue between the President and employees on the front lines, were held at 13 sites in Japan in FY2026, with a total of 886 employees participating. They were held with the aim of deepening understanding of and buy-in to our long-term vision for 2035 (NIFCO GROUP VISION 2035) and our medium-term management plan (NGS2029), and the President personally shared the new medium-term management plan. A total of 166 questions were raised across all venues, making for lively dialogue.
This was the first time such a meeting was held at our Group company Simmons Co., Ltd., and a meeting was also held in Korea (Nifco Korea) in July 2026.
In July 2025, the Company concluded a league sponsorship agreement with Japan’s professional baseball Pacific League, and is actively promoting branding activities such as commercials at the six Pacific League ballparks, sponsorship of probable starting pitcher announcements, and tie-up videos on YouTube. In 2026, as a strategic sponsorship project, we set up special booths at the six Pacific League ballparks from April to May, providing a good opportunity for many people to learn about Nifco as a company and about our products.

Meiji University Rugby Football Club, with which we concluded an official partner agreement in September 2025, is a traditional powerhouse team founded more than 100 years ago. We decided to sponsor the club in agreement with the spirit it upholds: “commit fully to fair play,” “face everything sincerely and head-on,” and “give your all without hesitation and fulfill your responsibilities.” At the 62nd All-Japan University Rugby Championship held in January 2026, the club won the championship and became the top university team in Japan.

We are also working on recruitment branding by placing advertisements at stations near universities and in university cafeterias. Since December 2025, we have displayed a poster near Exit 4 of Tsurumai Station, a major station on the Nagoya Municipal Subway Tsurumai Line. The area around Tsurumai Station is one of Nagoya’s leading cultural and educational districts, home to a large library and university campuses. To give students who use the station a reason to take notice of Nifco Inc., the poster pairs the catchphrase “We live on ideas” with an illustration of a bento box packed with a variety of Nifco products, aiming to convey Nifco’s corporate philosophy and business visually.

In addition, since April 2026, we have placed stickers of the same design on cafeteria trays at three universities in the Kanto region, using two-dimensional barcodes to direct users to our corporate website, recruitment website and other pages.

Initiatives Aimed at Reducing Total Working Hours

With regard to working styles, we continue to pursue initiatives aimed at reducing total working hours. We are also expanding flexible working styles and leave programs globally, including a more flexible flextime system and a telework program that allows employees to choose whether to work from the office or from home, both of which have been introduced for employees other than production line workers and certain others. Through these initiatives, we seek to create workplace environments that support the sustainable development of our business while maintaining high levels of employee engagement. Each subsidiary and site also works to improve its internal environment according to its own needs, and information is shared for mutual understanding at the Global HR Meeting and other forums.

---

Introduction of a Telework Program

In line with new working styles in the new normal era, we have established a telework program company-wide. Employees who wish to telework do so for a set number of days after consulting with their supervisors. At present, nearly half of the employees in indirect departments telework.
Telework is limited to a maximum of three days per week, and a telework allowance of 200 yen per day is paid to help cover utility costs and other expenses incurred while teleworking.

Encouraging Employees to Take Annual Paid Leave

To improve employees’ work-life balance, we have advanced initiatives that support flexible working styles, such as reviewing the scope of use of the accumulated paid leave system and the refresh leave program. We continue to work on promoting the use of these systems and improving their operation.
In FY2025, the rate of annual paid leave taken was 76.6% against a target of 80% or higher. We achieved 100% compliance with the statutory requirement for employees to take at least five days of annual paid leave per year, which came into effect in April 2019.

Status of annual paid leave taken (target: 80% or higher)

(As of the end of March 2026; the Company on a non-consolidated basis in Japan)

* Definition of the rate of annual paid leave taken: days of leave taken in the fiscal year ÷ days of leave granted in the fiscal year (covering regular employees, contract employees and post-retirement re-employed employees)

Employee and officer stock ownership plans

The Company introduced an employee stock ownership plan in 1979 for the purpose of fostering employees’ awareness for
management participation and motivation to build assets. It was expanded to cover employees of our Group companies in
Japan in 2011.
The following table shows the incentive rate and the percentage of participants among eligible employees at each company.

As of March 31, 2026

The Company also introduced an officer stock ownership plan in 1991 with the aim of enhancing officers’ motivation to
improve performance and increase corporate value over the medium to long term, while further aligning their interests with
those of shareholders. It was expanded to cover officers of our Group companies in Japan in 2011.
During FY2025 (April 2025 to March 2026), 243,160 shares were acquired by the Employee and Officer Stock Ownership
Associations.
The Company granted stock to employees through a scheme using special incentive grants four times in from 2022 to 2025.
The number of shares acquired above includes 98,250 shares granted under this scheme in 2025.

Other Systems and Employee Benefits

So that all employees can thrive, Nifco has established a variety of systems. For all employees, including non-regular employees, we have introduced prenatal and postnatal leave (from eight weeks before the expected date of childbirth until eight weeks after childbirth), childcare leave (until the child reaches the age of two at the longest), childcare sick leave (up to five days a year per child until the end of the third year of elementary school), family care leave (up to one year per family member), a shortened working hours system (from FY2025, expanded to cover employees with children up to the end of the sixth year of elementary school, from the previous third year), and a system for moving start and end times earlier or later (until the end of the sixth year of elementary school).
In addition, we offer conversion to regular employee status, a post-retirement rehiring system, enrollment in various types of insurance, various social insurance programs, a defined benefit pension plan, a defined contribution pension plan, a savings accumulation plan, an employee stock ownership plan, membership-based employee benefit services, and a scholarship repayment support program. In FY2026, we were certified as a Hataraku Yell Welfare Promotion Corporation in recognition of our various initiatives.

---