Materiality and KPIs

Review of Material Topic

In March 2025, we conducted a comprehensive review and update of our materiality assessment to better reflect the social issues we recognize and ensure greater relevance amid the changing external environment. This review was necessary as significant changes had occurred in the external environment since we first identified our materiality in June 2021. We also need to strengthen alignment with our medium-term business plan, which was modified in May 2025. Moving forward, we will advance our sustainability initiatives based on the seven newly identified material topics that emerged from this updated assessment.

Material Topics Identification Process

STEP.01 Identifying Social and Internal Issues
Based on international external sustainability guidelines such as GRI, SASB, SDGs, and other global trends, we extracted societal issues. Through internal interviews with the members of various subcommittees, we identified internal issues and organized them into 43 items: 8 environmental, 22 social, and 13 governance-related.

STEP.02 Evaluating Issues
The extracted issues were evaluated against two axes: the first is a company axis encompassing key values, strengths, management strategy, medium-term business plan, performance and reputation; the second is a stakeholder axis covering patients, medical professionals, business partners, employees, local communities, shareholders, and investors.

STEP.03 Prioritizing and Categorizing Issues
The items with high evaluations on the two axes of "importance to our company" and "importance to stakeholders" were grouped based on relevance, and seven materiality candidates were selected.

STEP.04 Finalizing Material Issues
The new material topics were approved by the Board of Directors following confirmation by the Sustainability Committee.

Identified Materialities

ESG Classification Material Topics Major Themes KPIs Medium-Term Targets
(to be achieved by FYE3/2028)
Philosophy
Realizing a Healthier Society
Social Issue Resolution through Innovative Medical Devices Customer Needs Response System Development Needs Collection System Enhancement System Establishment and Needs Response
Research and Development and Technological Innovation Patent Count Domestic: 41 Patents / Overseas: 20 Patents
Healthcare Worker Workload Reduction Healthcare Worker High-Burden Task Identification Issue Resolution and Effectiveness Verification
Appropriate Marketing and Labeling Implementation Appropriate Marketing and Labeling Training Enhancement Promotion Code Compliance
Environmental
Consideration for the Global Environment
Environmental Impact Reduction GHG Emissions Reduction CO2 Emissions Energy Conservation Advancement / Scope 3 Emissions Reduction Effort Enhancement
Circular Economy Advancement Circular Economy Advancement Metrics Recycling Rate Maintenance / Reuse Initiative Advancement / Water Resource Optimization and Reduction
Social
Creating a Rewarding Workplace
Supply of Safe and Reliable Products
Technology Utilization
Diverse Talent Workplace Creation Diversity Advancement Personnel Systems Development and Optimization New Personnel System Implementation and Enhancement
Job Satisfaction and Work Ease Initiative Advancement Issue Identification and Measure Implementation
Corporate Competitiveness Enhancement through Talent Development Human Resource Development for Sustainable Growth Management Personnel and Young Leader Development New Training Framework Implementation and Verification / Individual Training Program Effectiveness Assessment and Review
Global Talent Development Overseas Assignee Training Implementation and Enhancement / Global Talent Development Program Implementation and Enhancement
Product Quality Assurance and Supply Systems Enhancement High-Quality and Safe Product and Service Supply Global Expansion Certification Acquisition and Maintenance Domestic and International Regulatory QMS Compliance Maintenance
QMS Maintenance Educational Program Development and Implementation Educational Program Implementation
Core Product Group Yield Rate Monitoring, Maintenance, and Improvement Yield Rate Monitoring and Improvement Measure Implementation / CSR Procurement Guidelines Development
Supply Chain Management Enhancement CSR Procurement Guidelines Development CSR Status Survey Implementation
Supply Chain Enhancement Initiative Advancement Inventory and Logistics Management Improvement Plan Development and Execution
Digitalization Advancement New Technology Adaptation AI Usage Rate Improvement AI Usage Rate: 80%
External AI Training Session and Lecture Count Semi-Annual Frequency
Document Digitization Count Order Processing Paper Usage Reduction: 20% (vs. FYE March 2025)
Governance
Acts as a Responsible Company
Governance Enhancement Stakeholder Engagement Stakeholder Engagement Enhancement Business Partner Reporting Hotline Operation and Enhancement / Stakeholder Engagement Implementation
Discrimination and Harassment Prevention Human Rights Risk Reduction Initiative Enhancement Second Human Rights Due Diligence Implementation and Risk Reduction Effort Advancement
Risk Management Systems Development Risk Management Advancement Continuous Risk Management Implementation / System Verification and Review
Compliance Systems Enhancement Compliance Enhancement Effort Advancement Continuous Fair Competition Regulation Explanatory Session Implementation / Anti-Bribery System Enhancement

Material Topics and KPIs

Solve medical issues through innovative medical devices

Our mission is "Contributing to a healthier society through cutting-edge medical technologies," and the continuous delivery of innovative medical devices to medical professionals forms the foundation of our value creation.

We will secure our technological competitive advantage by developing new proprietary technologies through focused investment in R&D and patenting the results. We would like to meet the needs of medical professionals by introducing overseas advanced medical devices in Japan,applying our proprietary technologies to the development of products in other fields besides cardiovascular diseases.

Improve technology for in-house products

KPIs Major Medium-Term Targets (to be achieved by FY3/2025) FY3/2023 Results FY3/2024 Results FY3/2025 Results
R&D expense Bring about increases in R&D expenses R&D expenses (non-consolidated) of 2,316 million yen
(year-on-year increase of 7.3%)
(Non-consolidated) R&D expenses 2,358 million yen, up 1.8% YoY (Non-consolidated) R&D expenses 2,851 million yen, up 20.9% YoY
Number of patent applications Number of patent applications: 100 (total for FY3/2023-FY3/2025) 34 patents (non-consolidated) 41 patents
(Cumulative total of 75 cases from FY3/2023 to FY3/2024)
33 patents
(Cumulative total of 108 cases from FY3/2023 to FY3/2025)
Exploring new areas of business from Intellectual Property Planning and implementation of measures Continued implementation The introduction of a system to propose the needs of the medical field.

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≫ Research and Development

Introduce medical devices with high clinical value

KPIs Major Medium-Term Targets (to be achieved by FY3/2025) FY3/2023 Results FY3/2024 Results FY3/2025 Results
Introduction of user-friendly products
Application and Expansion of proprietary technologies to other fields
・Identify needs of the medical field and develop products that meet those needs
・Explore highly novel products
Continued implementation Creation and Utilization of a User-Friendly Checklist
Regular implementation of development project inventory meetings

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Reduce environmental impact

The impact of environmental problems on sustainability, such as an increase in natural disasters due to global warming and marine pollution caused by plastic waste, has become a major social issue.

We are actively working to reduce our environmental impact over the medium to long term by establishing policies and systems for environmental preservation. We will contribute to the preservation of the global environment by reducing CO2 emissions and improving the industrial waste recycling rate through our business activities.

Use resources efficiently

KPIs Major Medium-Term Targets (to be achieved by FY3/2025) FY3/2023 Results FY3/2024 Results FY3/2025 Results
Establishment of an environmental policy and promotion system ・Establish an environmental promotion system Formulation of Environmental Conservation Policy Establishment of Green Procurement Standards Formulation of chemical substance management procedures

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≫ Environmental Management
≫ Harmony with Nature

Reduce greenhouse gases

KPIs Major Medium-Term Targets (to be achieved by FY3/2025) FY3/2023 Results FY3/2024 Results FY3/2025 Results
CO2 emissions ・Reduce CO₂ emissions by 50% by FY3/2031
(compared to FY3/2021 levels)
・Scope 1 & 2 Emissions (consolidated): 6,612 t
(year-on-year decrease of 1.6%)
(Consolidated) Scope1 and 2 emissions 5,866 tons, down 11.3% YoY (Consolidated) Scope1 and 2 emissions 5,810 tons, down 0.9% YoY

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Reduce waste / Process waste properly

KPIs Major Medium-Term Targets (to be achieved by FY3/2025) FY3/2023 Results FY3/2024 Results FY3/2025 Results
Industrial waste recycling rate ・Achieve 90% industrial waste recycling rate 96% (non-consolidated) (Non-consolidated / R&D & Manufacturing Headquarters) 97% (Non-consolidated/R&D & Manufacturing Headquarters) 99%

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Create a workplace where employees can work with comfort

Employees are an important management resource supporting our business activities, and an environment in which all employees can work while making the most of their diversity is important for the sustainable growth of the company.

We are committed to creating an environment where each employee can work with vitality and enthusiasm by improving work-life balance and promoting understanding of diversity. In addition, we will formulate policies to respect the human rights of all stakeholders involved in our business and promote educational activities.

Create a comfortable work environment

KPIs Major Medium-Term Targets (to be achieved by FY3/2025) FY3/2023 Results FY3/2024 Results FY3/2025 Results
Assessment on the current status and implementation of measures to improve work-life balance Monitor and improve of actual working hours Grasped the actual working hours per person per year (1941.7 hrs.) (non-consolidated) Grasping the actual working hours per person per year(1828.6h) Analysis of hearing results for long-working-hour employees and consideration of measures

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≫ Employee Health and Safety

Respect human diversity

KPIs Major Medium-Term Targets (to be achieved by FY3/2025) FY3/2023 Results FY3/2024 Results FY3/2025 Results
Ratio of female managers ・Achieve a female manager ratio 15% by FY3/2031
・Increase ratio of female employees
・Study and implement measures to support women
2.6% (non-consolidated) (Consolidated)4.5% (Non-consolidated)3.6% (Consolidated)4.5% (Non-consolidated)3.1%

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Respect human rights

KPIs Major Medium-Term Targets (to be achieved by FY3/2025) FY3/2023 Results FY3/2024 Results FY3/2025 Results
Reinforcement on efforts to reduce human rights risks ・Conduct risk assessments on human rights Formulation of human rights policy Training on human rights risks
Implementation of human rights due diligence
Revision of the Human Rights Policy
Formulation of the Anti-Bribery Policy

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Develop human resources and provide opportunities for them to play an active role

Employees are important management resources that create the company's competitive advantage, and their growth through new challenges will enhance the company's corporate value over the long term.

We will continue to actively invest in human resources by establishing policies and systems for human resource development. By implementing measures to improve employee satisfaction and providing training opportunities that promote growth, we will continue to create an environment in which each employee can work with a sense of fulfillment.

Support employees to achieve specialized skills and personal goals

KPIs Major Medium-Term Targets (to be achieved by FY3/2025) FY3/2023 Results FY3/2024 Results FY3/2025 Results
Formulation of human resources policy and establishment of human resources development promotion system Formulate a human resources policy and promote human resources development Establishment of human resources development promotion system Establishment of human resources development promotion system Consideration of Human Resource Policy
Improvement of employee satisfaction Improve employee satisfaction ・Conducted employee satisfaction surveys
・Analyzed survey results and formulated measures to improve employee satisfaction
Analysis of survey results
Formulation and implementation of action plans
Implementation and follow-up of the Action Plan

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≫ Human Resource Investment

Strengthen education and training

KPIs Major Medium-Term Targets (to be achieved by FY3/2025) FY3/2023 Results FY3/2024 Results FY3/2025 Results
Education and training expenses per employee Increase education and training expenses per employee by 5% year-on-year Education and training expenses per employee (non-consolidated): 97,142 yen (year-on-year increase of 39.8%) (Non-consolidated) 79,108 yen, down 18.6% YoY (Non-consolidated) 83,986yen, up 6.2% YoY

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Secure product quality and stable supply

The medical devices we handle include many products that may affect the lives of patients.Therefore, ensuring the reliability of their quality is an important management issue. We will promote efforts to continuously improve the quality of our products by complying with not only Japanese domestic standards but also global regulatory requirements.

The medical devices we handle include one-of-a-kind products, and it is our social mission to continue to provide a stable supply of products to the medical field. We will strengthen our product supply chain system by promoting supplier risk management and the duplication of production lines.

Strengthen the quality control system

KPI Major Medium-Term Targets (to be achieved by FY3/2025) FY3/2023 Results FY3/2024 Results FY3/2025 Results
Compliance with global regulatory requirements (Acquire MDSAP certificate) ・Obtain MDSAP* certificate
・Improve our surveillance evaluation
Completion of MDSAP application Acquisition of MDSAP certification Expansion of the scope of 13485 certification
Expansion of the scope of MDSAP recognition
Maintain and improve the quality of our in-house products Analyze complaint reports and conduct surveys for doctors Questionnaire survey for physicians 1 item Implementation of quality improvement and preventive measures

*Medical Device Single Audit Program
MDSAP is a program that verifies the conformity and adequacy of a manufacturer's QMS to the regulatory requirements of regulatory authorities in five countries (the United States, Australia, Brazil, Canada, and Japan) in a single survey by an accredited survey organization.

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≫ Product Quality Management and Stable Supply

Secure stable supply of products

KPI Major Medium-Term Targets (to be achieved by FY3/2025) FY3/2023 Results FY3/2024 Results FY3/2025 Results
Promotion of production line duplication ・Promote the use of multiple production lines
・Promote multifunctional workforce
Commenced production line duplication work for multiple items Continuation of double-tracking of core in-house products Continuation of double-tracking of core in-house products
Diversification and internalization of outsourcing of critical components and subcontracted processing Increase coverage of multiple production lines and in-house production by 5% (compared to FY3/2024 Results) Selection of important components
Considering the priority of double-track members
Implementation of supplier BCP surveys and creation of a BCP map

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Strengthen corporate governance

In order to achieve sustainable growth in the midst of a drastically changing external environment, it is necessary to establish a corporate governance system that increases management transparency and ensures prompt decision-making and its execution and supervision. We aim to enhance our corporate value by steadily promoting compliance with the Corporate Governance Code.

In recent years, the diversification of risks surrounding companies has made risk management more important than ever. We will strive to reduce risks by reassessing and deciding on measures to address company-wide risks and by strengthening information security measures.

Strengthen auditing and supervisory functions
Execute management decision and operation with objectivity and transparency

KPI Major Medium-Term Targets (to be achieved by FY3/2025) FY3/2023 Results FY3/2024 Results FY3/2025 Results
Implementation of measures to comply with the Corporate Governance Code Comply with the Corporate Governance Code • Appointment of one additional outside director to the Nomination and Remuneration Advisory Committee Revision of Composition and Calculation Methods of Executive Compensation Disclosure of "Measures for Realizing Management Aware of Capital Cost and Stock Price"
Publication of Integrated Report
Implementation of training for board members
Enhancement of information disclosure

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≫ Corporate Governance
≫ Directors

Strengthen risk management initiatives

KPI Major Medium-Term Targets (to be achieved by FY3/2025) FY3/2023 Results FY3/2024 Results FY3/2025 Results
Promotion of risk management Reassess company-wide risks, determine countermeasures, verify and implement reviews continuously ・BCP development at all sites
・Creation of company-wide risk list
BCP briefing for all employees
Review of Company-Wide Risk Assessment
Implementation of exercises based on the BCP
Updating of the risk list
Reinforcement on information security measures Create and implement a five-year roadmap based on the results of company-wide risk analysis Conducted training for all employees (2 times) Training for employees (2 times)
Implementation of vulnerability diagnosis and preparation of a two-year roadmap based on the results of the diagnosis
Execution of the first year of the roadmap

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Promote compliance

As a company that handles medical devices that can affect the lives of patients, we recognize that each of our employees is required to not only comply with laws and regulations, but also to have a higher sense of ethics in their actions.

We believe that practicing compliance means meeting the expectations of all stakeholders involved in our business, and we aim to be a company that continues to be trusted by society through compliance awareness activities.

Ensure fairness and transparency in corporate activities

KPI Major Medium-Term Targets (to be achieved by FY3/2025) FY3/2023 Results FY3/2024 Results FY3/2025 Results
Strengthening of the compliance system Implement various training programs and raise awareness of compliance Conducted various training programs designed for employees as well as job-specific training programs Conducting various training programs for all employees and job-specific
Strengthening the scholarship donation screening system
Implementation of various training programs for employees and by job type
Commencement of donation review operations
Promotion of efforts to improve understanding of the whistleblower system ・Establish a whistleblower system that complies with the Whistleblower Protection Act
・Ensure that the whistleblower system is known throughout the Company to promote its appropriate use
・Established a whistleblower system that complies with the Whistleblower Protection Act
・Conducted whistleblower system-related training programs and awareness surveys for employees
Conducting a survey on the level of awareness and understanding of the whistle-blowing system
Briefings on the whistle-blowing system for subsidiaries (Malaysia, South Korea)
Implementation of training for personnel involved in handling public interest whistleblowing
Addition of the Indonesian language to the whistle-blowing system for subsidiaries (Malaysia)

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≫ Compliance
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