Human Resource Management

Overall Strategy

At our group, in order to achieve the "optimization of our business portfolio" outlined in our Medium-Term Management Plan 2030, we recognize that it is essential to shift away from the traditional stable and company-led career development and stability-oriented approach, and instead "optimize our talent portfolio" to create an organization where each employee autonomously acquires skills and demonstrates value. To cultivate individuals who build their careers with their own aspirations and lead business transformation as professionals, we have made it the core of our human capital management to "ensure that each individual working at Niterra grows through their work and continues to shine in society. And that this growth becomes the driving force for the sustainable development of the Niterra Group, thereby aiming to improve corporate value." We will strongly promote "Niterra Talent Management" globally, centered on four key elements: "Aspiration," "Professionalism," "Diversity," and "Incentives." Specifically, in order to support the timely, appropriate, and appropriate placement of talent in growth areas, we will deepen discussions through talent meetings and concretely implement these into recruitment, training, and promotion measures. At the same time, by clarifying internal jobs and openly presenting career paths, we will realize "talent recruitment that respects individual aspirations," "fair opportunity provision," and "equal job assignment." Diverse talent will collaborate across barriers under the shared values of the "Niterra Way," and as individual engagement increases, it will lead to the creation of innovation on the ground. And this will connect to enhancing corporate value as a "company that shines a light on the Earth," a vision embodied in the English company name "Niterra."

Niterra's Approach to Human Capital Management

In our group's transformation into a "company that makes the world shine," our greatest management resource is none other than "people." The reason we are developing "Niterra Talent Management" globally is the importance of breaking away from our previous stability-oriented culture and transforming into an organization that creates new value by combining diverse individuals.
In our Medium-Term Management Plan 2030, we have prioritized "having diverse and proactive talent embody the Niterra Way." To foster a transformation into a group of professionals who "possess aspirations, take initiative, and persevere," "aim to be a professional and enhance their own value," "collaborate with diverse talent," and "Embodying the shared values," we aim to achieve the "engagement score of 3.56 or higher" set forth in our Medium-Term Management Plan 2030 and become a "company that makes the world shine." This will be achieved by drawing out the desire for individual growth and building a robust relationship globally that allows employees and the company to continue growing together.

Governance

Our group has established a governance system for management that maximizes the value of our human resources.

1. Decision-making and oversight structure

The Board of Directors clarifies the authority and responsibilities in human resource management by selecting and appointing representative directors and executive officers based on recommendations from the Nominating Committee and the Compensation Committee. Important matters and medium- to long-term strategies related to human resource management are deliberated and decided at the Management Meeting, and the Board of Directors receives regular reports on their progress and oversees them.

2. Strategy Formulation and Monitoring

The Human Resources Strategy Dept. is established within the Global Strategy Div. and formulates overall human capital management strategies and basic policies that are closely linked to the management strategy. Based on the overall strategies and policies, the department monitors the Group as a whole to ensure that appropriate human capital management is being conducted, confirms strategic alignment, and identifies risk events.

3. Implementing human resource management functions in line with the strategy

The Human Resources Department within the Business Operations Division serves as the organization that executes our strategy. This department is responsible for providing and implementing a range of talent management functions—including recruitment, training, systems, evaluation, placement, organizational development, and data analytics—to our business companies and domestic and international group companies, in line with our strategy.

4. Execution and collaboration optimized for business characteristics

Business companies and Group companies in Japan and overseas possess functions to autonomously consider and implement human resources measures optimized for their respective business characteristics and regional needs. To maintain consistency with the overall policies of the Group, we regularly confirm alignment with strategies and policies, monitor the progress of measures, review KPI trends, and communicate management's intentions through multi-layered committees and other bodies led by the Human Resources Strategy Dept. and the Human Resources Dept. of the Business Operations Div.

Four key elements of human resource management

Our group recognizes that employees are our greatest asset and promotes human capital management. By supporting the autonomous growth of our employees, we aim to build a relationship where both employees and the company can continue to grow, and where each individual can maximize their potential. In our Medium-Term Management Plan 2030, we have identified four key elements to achieve this and are implementing human resource management measures based on them.

The first is "ambition." It is the source of each individual's ability to act autonomously, and having ambition encourages employees to create their own future through their work. To that end, we will go forward to providing more broad and equitable opportunities for each individual to have ambition and realize it.
The second point is "professionalism." We expect employees to understand what is necessary to take on the challenges they desire and to enhance their own value as professionals. Furthermore, through revisions to our personnel system, we will ensure that there is healthy rigor and that employees receive fair evaluations as professionals.
The third point is "diversity." In order to continue to demonstrate corporate value even amidst rapid changes in the external environment, we believe it is important for people with diverse backgrounds to come together and multiply the strength of the team many times over.
Going forward, we will promote the development of an organizational culture where diverse talent, encompassing not only differences in gender and nationality, but also a broader range of lifestyles, personalities, and values, can thrive.
The fourth point is "incentives." By providing a clear distinction between compensation based on roles and results, and offering fair opportunities, we create a healthy competitive environment and encourage motivated individual growth. As a result, we continue to attract top talent from both inside and outside the company, leading to sustainable development.

Niterra Talent Management

In our Medium-Term Management Plan 2030, we have established Niterra Talent Management as the cornerstone of our human capital management, with the aim of "enabling each and every employee at Niterra to grow through their work and continue to shine in society, and for that growth to become the driving force for the sustainable development of the Niterra Group, thereby enhancing corporate value."
Within Niterra's talent management, we are particularly focused on supporting each individual's autonomous career development by clarifying jobs within the company and outlining career paths. Specifically, we implement "Global Grading," which measures core positions within the group using common indicators, and "Global Job Posting," which makes internal positions public based on grading and enables employees to proactively request transfers.
In addition, we will reaffirm the shared values of the "Niterra Way" throughout the entire group and encourage actions in line with them, thereby creating a hub that connects individuals with diverse backgrounds.

Global Grading

As of the fiscal year ending March 2026, our group has 58 overseas locations, with overseas sales accounting for over 80% of our total sales, and over 40% of our group employees are located in overseas subsidiaries. In this internal environment, we will introduce global grading as part of our human capital management. By setting common grading standards for core positions in our domestic and international group companies, we aim to clarify the value of jobs and further strengthen the placement of the right people in the right positions across the entire group. Specifically, by identifying core positions in our domestic and international group companies and the key personnel associated with them, we will strengthen strategic training plans and promotions, and contribute to the sustainable improvement of corporate value by making succession plans function effectively.

Global Job Posting

To support the autonomous career development of each individual, we will introduce a new global job posting system during the 2030 period of our medium-term management plan. This system will make job descriptions for core positions both domestically and internationally public within the company, allowing employees to express their desire to transfer to a new position. After a selection process, the official appointee will be determined.
While we have previously implemented an internal job posting system, there have been challenges in its company-wide use, such as the disclosure and utilization of positions being limited to certain departments.
Going forward, we will further expand the disclosure of target positions domestically, strengthening the infrastructure for fair and transparent opportunities for challenges. During the period of our Medium-Term Management Plan 2030, we aim to expand this to include key positions across the entire group, including overseas positions, and evolve into "Global Job Posting" that ensures the optimal placement of the right person in the right place.

The Niterra Way: Spreading Shared Values

In 2017, our group reorganized the principles that had been cherished since the founding of Morimura-gumi, the foundation of the Morimura Group, and established them as the "Nittoku Way (now: Niterra Way)." Now, approximately 10 years after its establishment, we recognize that we are still only halfway there in terms of disseminating these principles to our group companies both domestically and internationally.
As we actively pursue business diversification, global expansion to acquire talent with diverse backgrounds, and the creation of an environment where diverse talent can thrive, we believe it is crucial that the Niterra Way's shared values are deeply ingrained and embodied by each employee, serving as a foundation for connecting these diverse individuals. At the core of our efforts to disseminate these values are dialogue sessions on shared values. In fiscal year 2025, we first held dialogue sessions with management, where employees shared their interpretations of the connection between management strategy and philosophy, and how to apply it to their own work, in their own words. Moving forward, we will gradually expand this circle of dialogue to each workplace, building a culture where shared values can be discussed on a daily basis. As a result, we will foster a sense of unity within the group and cultivate talent with strong will and the ability to take action.

Further contributions from current personnel

The three elements of the career design cycle

To support employees' proactive career development, autonomy, and willingness to take on challenges, we have established a system that implements a "career design cycle."
in particular,

• WILL: Through "My Career," an annual dialogue with supervisors about one's career, employees articulate and concretize what they want to achieve and the person they aspire to be.
• CAN: Use the "skill map" to identify your current strengths and the skills you need to develop to take on the next challenge (stretch).
• MUST: Connect your expected role with your own will and capabilities.

Through regular meetings and daily one-on-one sessions, we go beyond mere goal setting. Workplace supervisors support each individual's growth, engaging in dialogues that deepen their understanding of the significance and value of their work, thereby driving the cycle forward.
To help each employee realize their designed career, we are systematizing educational content and making recommended training programs visible, enabling them to proactively learn and take on challenges. Beyond company-led training, we are creating an environment and culture that supports autonomous skill development and growth.
Furthermore, we have established a career counseling service so that employees can consult with us at any time if they encounter any daily work or career-related concerns during the career design cycle. Employees with career consultant qualifications provide one-on-one counseling, supporting employees in finding their own answers and maximizing their potential.

Recruiting diverse talent

To respond quickly to changes in the business environment and transform our talent portfolio, we are promoting mid-career recruitment, including for management positions.
Furthermore, in order to respond to further globalization and enable diverse talent to thrive, we are actively recruiting foreign national employees. We continue to hire foreign national employees in our new graduate recruitment program, and in recent years, in addition to international students studying at Japanese universities, we have also focused on recruiting individuals who have acquired specialized skills at overseas universities.
Furthermore, we are promoting an increase in the hiring rate of female employees and people with disabilities, and by enabling diverse talent, including mid-career hires and foreign national employees, to thrive in each workplace, we are contributing to the advancement of diversity, equity, and inclusion (DE&I) throughout the company.

Performance management and job grading systems

Our company employs a highly fair personnel system that rewards achievements and challenges, regardless of attributes such as age or gender. We have implemented a system where employee compensation reflects the performance of their respective departments, and we expect each employee to be strongly aware of producing outputs that contribute to the business and performance, thereby driving their work more efficiently.

Performance Management

At the beginning of the term, individual goals are set in line with organizational objectives. Progress is monitored daily through one-on-one meetings and progress reporting meetings, and mid-term meetings are held to review the first half of the year and discuss how to proceed in the second half. Finally, performance is evaluated in the end-of-term meeting.
Furthermore, by providing feedback on performance evaluation results and advice from evaluators, we aim to improve performance and support future career development.

Job grading system for core positions (management positions)

For management positions, we employ a job grading system, setting job grades and compensation levels according to the scope and responsibility of the job. Job descriptions (JDs) and job grades (GGs) are established as globally consistent standards, creating a system that ensures compensation aligns with the actual roles performed, resulting in a sense of fairness and satisfaction.
Even at the staff level, we have eliminated the seniority requirement for promotion, encouraging the early appointment of talented individuals regardless of their seniority, across all management and staff positions.
Furthermore, core positions are divided into two categories: Management positions (M positions), which are responsible for organizational development, performance improvement, and revitalization through organizational management and the execution of tasks requiring high-level judgment; and Specialist positions (SP positions), which are responsible for impacting business operations and performance by leveraging high levels of expertise. By allowing M positions to focus on management and SP positions to focus on the application of expertise, we promote more efficient business operations. By clearly defining individual roles, we will achieve rapid innovation and the right people in the right places, thereby accelerating the achievement of organizational goals.

Initiatives to improve employee engagement

Our group recognizes that respecting the diverse individuality of each person and drawing out their motivation and abilities is essential for the sustainable growth of our employees and organization. Based on this belief, we have positioned improving employee engagement as a key management issue and are working to promote it throughout the company. Through the engagement survey conducted annually, we quantitatively and qualitatively visualize the "state of our employees and organization," clarify current challenges, and consider and implement specific measures to achieve a better state. In this process, the Human Resources Department takes the lead in aligning company-wide understanding through discussions with executives and sharing of initiatives with department and section managers. At the same time, each workplace takes the lead in holding workshops in which all members take ownership and think about initiatives to create a better workplace.
As a result of these activities, employee engagement has steadily improved, from 3.30 points at the end of fiscal year 2022 to 3.50 points at the end of fiscal year 2025.
We will continue to work together as a group to enhance employee engagement in order to promote the growth of our talent and organization.

In our Medium-Term Management Plan 2030, we will set employee engagement as the Key Goal Indicator (KGI) for our human resources strategy. Until now, we have measured overall satisfaction by combining hygiene factors such as ease of work and motivational factors such as job satisfaction. However, compared to the improvement in overall satisfaction through environmental improvements such as health management, the score for items related to job satisfaction has been low, which has been a challenge. Therefore, going forward, we will promote human resource management that places the right people in the right positions and focus on items related to job satisfaction (job satisfaction, sense of adaptation, loyalty to the company, etc.). We aim to raise this score from a company-wide average of 3.42 points at the end of FY2025 to 3.56 points or higher at the end of FY2030. We will achieve these goals by implementing various measures of Niterra Talent Management.

Furthermore, while we have been using the results of the engagement survey as one of the indicators for calculating executive bonuses since fiscal year 2022, we will also be introducing "employee engagement" as an indicator for executive performance-linked stock compensation starting in fiscal year 2025. This will clearly position improved engagement as a key management indicator and accelerate human capital management toward the sustainable growth of the entire group.

• Remuneration for Director

Received an Excellence Award at the Platinum Career Awards.

Our company received the "Excellence Award" at the 6th Platinum Career Awards (organized by Mitsubishi Research Institute, Inc.), which recognizes initiatives related to supporting employees' autonomous career development.
A "Platinum Career" is a career model characterized by three features: a long-term perspective (career development that allows one to continue to thrive regardless of age), autonomous learning (a career in which one proactively learns and gains experience), and solving social issues (career development with the aim of solving social issues through business). The "Platinum Career Award" recognizes companies that support the development of their employees' platinum careers, with the aim of spreading this philosophy throughout society.
Our company received an Excellence Award from among 116 applicants, based on our "high participation rate (99%) in DX literacy training," "visualization of employee skills and provision of learning opportunities for lacking skills," and "fostering awareness of career autonomy and information disclosure."

• Return to the Human Capital