Nippon Light Metal GroupNIPPON LIGHT METAL GROUPINTEGRATED REPORT 2021

Nippon Light Metal GroupCONTACT INFORMATION

Nippon Light Metal Holdings Company, Ltd.
Central Planning Office Public Relations
Urbannet Uchisaiwaicho Building, 1-1-13 Shimbashi, Minato-ku, Tokyo 105-8681 Japan
TEL:03-6810-7100
https://www.nikkeikinholdings.com

環境に配慮した FSCⓇ認証紙を使用しています。

Basic Information

The NLM Group’s Management Policy

Value Creation

Foundations of Value Creation

Editorial Policy

Three Pillars of the NLM Group

Introduction

disclosures on the foundations supporting value creation have been

Starting this year (2021), the NLM Group will publish an integrated report.

prepared with reference to the Environmental Reporting Guidelines (2018

The report is designed to communicate the Group’s vision for value

edition) of the Ministry of the Environment and Global Reporting Initiative

creation in both financial and non-financial terms to all stakeholders,(GRI) standards.

including shareholders and investors.

1. Mission of the NLM Group (Management Philosophy)
Be forever committed to the development of new applications for aluminum and aluminum-related materials
and thereby contribute to the improvement of people’s quality of life and environmental protection.

2. Principle of conduct

As we promised in CSR Report 2020, we have given additional

Period covered

consideration to the previously disclosed draft material issues and identified

Data for the report was collected between April 2020 and March 2021.

issues that are material to the businesses of the NLM Group while accepting(Note) Data collected before or after this period is also used in some sections of this report.

feedback from outside experts. Based on the information shared in thisExcite employees, impress customers, gratify shareholders, and be gentle to the Earth.

3. Management methods for achieving the mission
Develop products and create businesses based on a matrix organizational team structure.
Implement a single Create-Make-Sell process by consolidating the formerly separated processes ofdevelopment, manufacturing and sales.
Manage the operating profit on a product-by-product basis.
Create a workplace where everyone assumes responsibility for and takes pride in his/her work andwhere everyone can fully develop his/her abilities as freely as possible.

report, we will engage in dialogue with stakeholders while striking a balance

Scope of the report

between winning back the trust lost through quality issues and creatingThis report describes the activities of and facts about Nippon Light Metal

value. We look forward to receiving frank opinions from stakeholders

Holdings Co., Ltd. and its 77 consolidated subsidiaries (a total of 78

regarding this report.

companies) unless otherwise specified.

Reference guidelines

Period of issuanceThis report has been prepared with reference to the International

October 2021 (next report: October 2022, previous reports: (annual

Integrated Reporting Framework advocated by the International

report) August 2020 (CSR report) September 2020)

Integrated Reporting Council (IIRC), the Sustainability Accounting

Basic Policies
Group Management
1. The Group shall be managed from the Group’s point of view to maximize our consolidated income.
2. All Group members shall make an effort to work in close cooperation with each other by sharing and using all groupproperties and resources, in order for the Group to maintain growth.
3. All business units of the Group shall define visions that match their characters and traits, implement the visionary
management system in which every member participates, and thereby strengthen each organization’s effectiveness.
4. The Group shall take a market-in point of view, aim to develop advanced, innovative technologies, and proactively
seek out new business opportunities.
5. The Group shall develop and make use of all necessary human resources from a long-term and global perspective.
6. The Group shall create healthy, safe workplaces, and aim to achieve zero-accident operations.

Standards Board (SASB), Sustainable Development Goals (SDGs),

Independent assurance

ISO 26000 and the Guidance for Collaborative Value Creation from the

A ★ symbol indicates that a third party, KPMG AZSA Sustainability Co., Ltd.,

Ministry of Economy, Trade and Industry. In addition, information

has provided independent assurance regarding the reliability of the data.

Reporting Media
Further details and past initiatives are available on our website.
Financial information

Non-financial information

Corporate Social Responsibility and Corporate GovernanceIntegrated Report 2021
NIPPON LIGHT METAL GROUP INTEGRATED REPORT 2021

7. The Group shall manage group companies in harmony with shareholders, suppliers, customers, employees, andlocal communities and aim to be a corporate group highly regarded by the society.
8. The Group shall comply not only with the laws and regulations of the countries and regions in which it operates but
also with relevant international standards and their spirit, doing business in a fair and transparent manner.
9. The Group shall provide socially useful, safe, and secure products and services to satisfy and win the loyalty ofcustomers.
10. For environmental issues, the Group shall not only comply with the relevant laws and regulations, but also establish
our own environmental policies, and work to realize a sustainable society in an active and proactive way.
11. Recognizing the importance of reliable financial reporting, the Group shall ensure that the accounting standards arecomplied with and internal control systems are established.
12. The Group shall manage corporate information in an appropriate manner, strive to maintain effective communications
with the public, and disclose information in a timely and appropriate manner.
13. The Group shall assess various risks accurately and implement activities for reducing these risks.

Websitehttps://www.nikkeikinholdings.co.jp/csr/
https://www.nikkeikinholdings.com/csr/ (English)

Nippon Light Metal Group

Websitehttps://www.nikkeikinholdings.co.jp/ir/ir-data/

NIPPON LIGHT METAL GROUPINTEGRATED REPORT 2021

Nippon Light Metal GroupCONTACT INFORMATION

Nippon Light Metal Holdings Company, Ltd.
Central Planning Office Public Relations
Urbannet Uchisaiwaicho Building, 1-1-13 Shimbashi, Minato-ku, Tokyo 105-8681 Japan
TEL:03-6810-7100
https://www.nikkeikinholdings.com

005_0600787912110.indd

環境に配慮した FSCⓇ認証紙を使用しています。

1-3

2021/12/07

Fact Book

14:46:43

Annual Report	Shareholders’Newsletter(Revised on January 30, 2019)

CONTENTS
Basic Information
01
03
21
49
53

01

The NLM Group's Management Policy
Corporate History
Financial and Non-Financial Highlights
Data
Independent Assurance Report

Integrated Report 2021

Value Creation
54
61
65
67
68

Initiatives to Support People with Disabilities
Operating Results and Financial Analysis
Consolidated Financial Statements
Company Information and Share Information
Global Network

05
09
11
13

Message from CEO
Material Issues of the NLM GroupThe Value Creation Process
Segment Overview

Foundations of Value Creation
23
25
27
31
35

Compliance
Risk Management
Quality
The Environment
Health and Safety

37
39
41
43
47

Human Resource Development
Labor Management

55
59

Governance
List of Officers

Supply Chain Management
Local Communities
Information Security

Integrated Report 2021

02

Basic Information

Value Creation

Foundations of Value Creation

Corporate History

As a corporate group that has been around for a century,
Team NLM continues to grow sustainably
into a groundbreaking innovator of aluminum and beyond.

Net sales

The technology for smelting aluminum was invented in the early 19th century.
(billion yen)Over a history spanning some two centuries since, aluminum-related products have come to be used in every facetof our daily lives.
Since the beginning of the 20th century the NLM Group, with its diverse origins, has also been contributing toenriching people’s lives and the sound development of society by engaging in a wide variety of businesses dealing
with aluminum and related materials, from materials to processing.
6,000
By passing down this history while engaging in more sustainable business activities, the NLM Group will help
improve people’s lives and protect the environment going forward.

1903年

1939

1950s

1960s

1970s

1980s

1990s

2000s

2010s

1903年 Nasu Aluminium Instrument Factory (later
known as Nikkei Aluminum) is founded.

Nippon Light Metal Co.,
Ltd. is established.
Aluminum smelting
operations are started.

Rapid and widespread
adoption of daily
necessities made fromaluminum

Aluminum sashes,
truck mountings

Industrial refrigeration
panels, public
landscaping productsElectrode foil, wheels
and heat exchangers forvehicles, memory disks

Secondary alloy business(recycling)
Automotive parts

Foil, powder and paste
business

Overseas expansion(China, Southeast Asia,
India, North America)

1931年 Sumitomo Aluminium Co., Ltd. (later known as
Toyo Aluminium K.K.) is established.

Net sales(billion yen)

6,000

5,000

5,000

4,000

4,000

1934年 Special Light Alloy Co., Ltd. (later known as
Nikkei Aluminium Rolling Co., Ltd.) isestablished.
1937年 The Shizuoka Plant of the Riken Foundation(later known as Riken Light Metal Industry Co.,
Ltd.) is founded.

1903:

1952~:

1974~:Development phase

Founding phase2003~:

Business expansion phase

Overseas expansion phase
3,000

3,000

History and Significance of Business Activities

1903

1939

1952

1974

1999

2012

Aluminum ware manufacturer Nasu
Aluminium Instrument Factory is founded.

Nippon Light Metal Co., Ltd. is establishedwith the aim of launching an aluminum
smelting business through joint investment
from Tokyo Dento Company (later known as
TEPCO) and Furukawa Electric Co., Ltd.

A capital and technological alliance isagreed to with Canada-based Aluminium
Limited (later known as Alcan, now Rio Tinto)

Through merger with Nikkei Aluminium Co.,
Ltd. and takeover of sales business from
Nikkei Aluminium Rolling Co., Ltd., a total
integrated production system for aluminumproducts is established.

NLM merges with Toyo Aluminium K.K.

Holding company system

By connecting the final manufacturing process foraluminum foil, diversification of the Group business
was achieved, enabling the development of ecofriendly products such as solar power generation.

Business groups that suddenly emerged and grew
during the business expansion phase were
integrated, and by strengthening coordination
2,000
through a cross-functional structure, Team NLM wasborn, with the ability to serve users in moresophisticated and detailed ways.

Household items such as pots and teapots bearing
the “nigiri arrow” trademark greatly contributed todeveloping demand for Japanese aluminum during
the early days.

Nippon Light Metal Co., Ltd.
1903

03

1903

Integrated Report 2021

NLM Group

The birth of an aluminum smelting manufacturer possessing
large-scale hydroelectric power generation capacity significantly
contributed to the stable supply of aluminum, whose applications
across industry and people’s daily lives continued to expand.

The world-class cutting-edge technologies brought
through an alliance with a major worldwide
aluminum manufacturer became the basis for the
new products and technologies that followed, andsupported the explosive rise in demand during
Japanese high economic growth period.

Due to the sharp rise in electricity rates due to the Oil
Shock, the business was rapidly switched fromaluminum smelting to focus on aluminum processing.

2,000

1,000

1,000

2020（年）

2020（年）※Due to the lack of accurate data, figuresprior to 1948 are not listed.

1952

1952

1974

1974

2003

2003

Integrated Report 2021

04

Basic Information

Value Creation

Foundations of Value Creation

Message from CEO

As Team NLM, we will strive
to be a groundbreaking innovator ofaluminum and beyond.

The Issue of Revocation of JIS Certification and Request to
Cease Using the JIS MarkWe recently became aware that some of our business sites
had been shipping products bearing JIS labels even thoughthose products did not meet the standards set forth in the
Ministerial Ordinance on Certification of Conformity to
Japanese Industrial Standards relating to mineral andindustrial products and their processing technologies, anddetermined that our quality control system was lacking.
Based on these revelations, we received notification of therevocation of JIS certification and a request that we cease
the use of the JIS mark from the Japan Quality Assurance
Organization, the body responsible for JIS certification.
We regard this improper conduct and our failure toprevent it as an organization to be truly unacceptable for acompany engaged in the manufacturing business, and aretreating the matter with the utmost of seriousness.
We deeply regret that the revocation of JIS certification
and request for suspension of use of the JIS mark has
greatly inconvenienced our customers and society, andresulted in serious damage to the credibility of the NLMGroup as a whole.

At present, we are making a Group-wide effort to fully
clarify the nature of the situation, and are working tosincerely explain the situation to our customers while
verifying the performance of the products we have alreadydelivered. Additionally, on June 9 we established a fivemember Special Investigation Committee made up of threeoutside attorneys with no vested interest in the Company,
one independent outside director and one independent
outside auditor. The committee will use its external insight toinvestigate the cause of the issue from an objective
standpoint, and make recommendations to prevent
recurrences.
The NLM Group has pursued its business activities under
its corporate philosophy to “be forever committed to thedevelopment of new applications for aluminum andaluminum-related materials and thereby contribute to theimprovement of people’s quality of life and environmental
protection.” Each officer and employee of the NLM Group
recognizes this problem as their own. We understand thatthe starting point of everything we do is to accept the harsh
criticism with sincerity and humility, and accordingly takeconcrete actions in order to recover and restore trust.
I would like to again express our deepest apologies forcausing this situation.

As Team NLM, we will work to be a groundbreaking innovator of aluminum and beyond.
Our current mid-term management plan that was formulated
in 2019 and runs from FY2019 until FY2021 embraces theslogan of “becoming a groundbreaking innovator ofaluminum and beyond as Team NLM.”
We have continued to emphasize the “Team NLM” and“groundbreaking innovator of aluminum and beyond”
approaches both internally and in public since I took up thepost of president, and as they also represent importantelements of the value creation process, the central theme ofthis report, I would like to give you a brief overview of them.

Ichiro Okamoto,President and CEO

The feature and strength deeply rooted in a history ofself-improvement

Introduction
On this occasion, the NLM Group has decided to issue an“Integrated Report” in place of its previous CSR Report andAnnual Report. In this report, we hope to speak in detailabout the external environment that surrounds the NLMGroup and the Group’s internal management resources,
sharing our vision in terms of how we perceive these05

Integrated Report 2021

aspects, how we will provide value as a member of society
and how we wish to take part in the creation of a better
future with a focus on the so-called “value creation process.”
However, before getting into this main topic, I would first
like to address the following matter.

The NLM Group is a complex business entity that ties
together a wide range of businesses with the exceptional
material of aluminum at its core, covering everything fromthe material itself to its processing. I believe that this point istruly our greatest feature and strength. To put it anotherway, instead of having a business structure that is overly
reliant on a specific business or specific field, it is precisely
this comprehensive capability and diversity to broadly

cover many fields which is the source of ourcompetitiveness and differentiation.
This also describes the history of the NLM Group itself.
Nippon Light Metal Co., Ltd., one of the major companies
in the NLM Group, was once a company whose main
business was aluminum smelting. But since aluminum
smelting consumes large amounts of electricity, the sharp
rise in the cost of electricity triggered by the oil shocks ofthe 1970s severely compromised the international
competitiveness of aluminum ingots produced domestically,
and in the mid-1980s, the company was forced toeffectively withdraw from this business. When facing a crisis
where the very survival of the company was at stake,
Nippon Light Metal Co., Ltd. made the monumental changeof shift the core of its business to the field of aluminum
processing.
Over the years, the NLM Group has grown into a
corporate group made up of a wide range of businesses,
including those that boast high competitiveness and a
global reach in processing fields that make use of aluminum.
Those companies include Toyo Aluminium K.K., which
operates aluminum foil and paste businesses, and Nippon

Integrated Report 2021

06

Basic Information

Fruehauf Co., Ltd., which manufactures body-related parts
for trucks and other vehicles.
The feature and strength of the NLM Group is deeply
rooted in this history of self-improvement, and the basis
for this is in our greatest asset: people. People truly arenothing less than “human assets.”

Responding to the external environment and creatingsocial value
The concept of Team NLM also contains a sense of
expectation that, if the Group companies possessing thiswide range of knowledge and their constituent members(human resources) each combined organically more thanever before, even greater synergies would be created.
The NLM Group has promoted organization-spanningcross-functional collaboration that is not restricted to theframeworks of companies and divisions, and created a hostof new products. Our efforts to consolidate the various
Group company sites as much as possible when we moved
our head office functions to Shimbashi at the end of 2019were truly rooted in this idea. To further accelerate andstrengthen these moves while continuing to produce
concrete results, we will keep thoroughly promoting theTeam NLM approach.
Being a “groundbreaking innovator of aluminum andbeyond” is truly the ultimate form that embodies Team NLM.
“Groundbreaking” is not simply a matter of expanding scaleor volume; it means to address customer needs based on
the Team NLM approach, to create products and services
with high added value and competitiveness utilizing thestrengths of the Group by integrating the knowledge of each
person, to create new needs and markets, and to compete
in new and unique fields. In other words, groundbreaking
means being an entirely new type of company and group.
This is also an idea and a goal of continually changing inpursuit of that vision.
Our slogan of “becoming a groundbreaking innovator ofaluminum and beyond as Team NLM” expresses ourdetermination to become a sustainable group for the future
by responding to the rapidly changing external environment,
and by continuing to change in order to help create social
value.

Pursuing integrated thinking
Opportunities and risks that emerge from changes in theexternal environment
In conducting its business activities, the NLM Group isaffected by various changes in the external environment.
Examples of these changes include trends related to carbon
neutrality, the shift to a recycling-oriented society, thedecline in the working population, the advance of
globalization, and the intensifying competition that develops
as a result. The efforts made by companies to address theSustainable Development Goals (SDGs) are also beingbrought into question.
To the NLM Group, these changes to the external
environment are major opportunities in some ways, andserious risks in others. For instance, if reducing greenhousegasses advances the electrification of vehicles, it would
represent an opportunity due to the rising expectations
placed on aluminum to reduce car weight, but the demise of
the internal combustion engine also represents a risk.
That is why in conducting our business activities we aim
to solve the social issues associated with these changes inthe external environment, and it is why we believe that weshould specifically address these challenges in our regularbusiness activities. I think this is the starting point ofintegrated thinking.

07

Integrated Report 2021

sought feedback from seven outside experts and engaged
in further considerations.
As a result, we identified five items as the priority
management issues to be addressed by the Group:
Protecting the global environment
Providing sustainable value
Happiness of employees
Responsible procurement, production and supply
Corporate ethics and governanceValue Creation

Foundations of Value Creation

We will go into further detail about these priority issues,the value we provide on that basis and the value creation
story on the following pages. In finding solutions to theseissues, we believe it will be important for all officers andemployees to take to heart the Group’s Corporate
Philosophy and Principle of Conduct, to make these
concrete guidelines for how they should act on a daily basis,and to tackle these key issues while striving to “become agroundbreaking innovator of aluminum and beyond as Team
NLM.”

Conclusion
Towards a new mid-term management plan
The current mid-term management plan that was formulated
in 2019 incorporated three basic policies: (1) creating new
products and new businesses, (2) investing resources ingrowth, and (3) strengthening management foundations. By
actively investing management resources including funds
and personnel in growth areas, we have strived to realize
further growth. While this plan has led to some concrete
actions such as the establishment of a new site in North
America for automotive parts, unfortunately it has beendifficult to meet our numerical targets overall, due to an

economic slump due to global trade frictions and the impact
associated with the COVID-19 pandemic since 2020.
We are currently considering a new mid-term
management plan with FY2022 as its starting point. We will
first focus on restoring the trust that was lost due to theissue of JIS certification being revoked and the request to
cease use of the JIS mark. Then, with a perspective ofintegrated thinking and without fear of change, we willcontinue efforts to realize our future vision: “becoming agroundbreaking innovator of aluminum and beyond as Team
NLM.”

Giving employees pride and happiness
A company is the amalgamation of the awareness andactions of each employee that makes it up. That is why it isimportant that the employees working in the Group, theirfamilies and others are able to say “I’m glad I (you) am (are)able to work at the NLM Group!” with a sense of pride. We
believe that is an important element constituting thehappiness of employees.
Human resources are the fundamental element ofmanagement, and we recognize it is particularly important
for those human resources to possess pride andhappiness.

Our future vision and priority issues (materiality)
When considering an integrated report in light of theseperspectives, we started by calmly recognizing the external
environment the Group faces and the management
resources at its disposal. Next, we took another look at thecurrent situation from the perspective of our Mid-to-longterm vision. Then, over the past year, the Company’s Boardof Directors, Group Executive Committee and meetings withthe presidents of our Group companies had discussed theGroup’s strengths and the issues it faces. After this, we

Integrated Report 2021

08

Basic Information

Value Creation

Foundations of Value Creation

Material Issues of the NLM GroupThe NLM Group will contribute to the realization of the sustainable society envisaged by the SDGs through the comprehensive

The Five Material Issue Themes of the NLM Groupand wide-ranging fields of business related to aluminum. As part of this process, in order to recognize the issues the NLMGroup should address in particular and raise them as important management issues for the Group’s sustainable growth andthe creation of corporate value, we identified the material issues of the NLM Group through the following steps.

Protecting the global
environment

Providing sustainable value

Responsible procurement,
production and supply

Steps to Identifying Material Issues

Happiness of employees

Corporate ethics andgovernance

Identifying a Group of Candidate Material Issues
Ahead of identifying the material issues, we ascertained the extent of impact of the Group’s
activities, which cover a wide range of business fields. To ensure there were no omissions in ourrecognition of related social issues, we first determined the Group’s value chain and its scope as a

Step 1means of verification. Next, based on the requirements of international guidelines such as SASB,

The Identified Material Issues
The material issues of the NLM Group were identified as follows.
In the near future, we will set KPIs and target values for each of the issues and work towards achieving them based on
concrete plans of action.

GRI, the SDGs and ISO 26000, we produced a list of around 400 wide-ranging social issues related
to ESG. We assessed the importance of each issue based on an analysis of the impact on each

The Five Material Issue Themes

stakeholder and the NLM Group, and finally narrowed the issues down to a shortlist of 31.

Material Issues

SDGs-related Items Reducing greenhouse gas emissions from company activities(scope 1, 2) Reducing greenhouse gas emissions in the supply chain

Working with the consolidated shortlist, we
conducted another assessment ofimportance based on two aspects, thedegree of importance to society, and theStep 2degree of importance in mid-to-long-term
corporate value creation for the NLM Group,

Protecting the global
environment

Vertical Axis: Social Importance

Assessing ImportanceItems ofparticularlyhigh importanceItems importantto the corporate
value ofthe NLM Groupand finally identified the material issues.

Identifying items ofhigh importance(scope 3) Action on climate change (TCFD)

Responding to water stress
Preventing environmental pollution
Efforts to expand the use of renewable energy Developing and providing low-carbon products and services

Providing sustainablevalue

Promoting a recycling-oriented economy and society
Developing and providing robust infrastructure
Contributing to the stable supply of foodHorizontal Axis: NLM Group Importance

Shaping the future through innovation
Occupational health and safety

Confirming Validity and ComprehensivenessStep 3

When assessing the importance of the items on the shortlist, we also had them evaluated by outside

Happiness of
employees

experts active in a variety of fields. We reconsidered and reviewed the items while referencing their

Developing a fulfilling workplace
Diversity & inclusion
Securing and cultivating human resources

opinions to confirm the validity and comprehensiveness of the choices.

Providing safe and secure products and services

Identifying the Material Issues

Step 4Integrated Report 2021

production and supply

We reclassified the identified material issues into five material issue themes. After undergoing review

Protecting and respecting human rights
Developing a stable supply chain
A resilient value chain that is flexible to changes

by the CSR Committee and Group Executive Committee, the issues were approved by the Board of
Directors.

09

Responsible
procurement,

Corporate ethics andgovernance

Strengthening governanceReinforcing the compliance framework

Integrated Report 2021

10

Basic Information

Value Creation

Foundations of Value Creation

The Value Creation Process
Based on the slogan of “becoming a groundbreaking innovatorof aluminum and beyond as Team NLM,” the NLM Group aims
to solve a range of material issues in a manner consistent with
its Corporate Philosophy and Principle of Conduct.
We will invest both financial and non-financial capital in thewide range of businesses dealing with aluminum and relatedmaterials, and contribute to the improvement of people’s qualityof life and environmental protection through the circulation ofcapital that is achieved by providing value to each stakeholder
and creating social value.

Corporate Philosophy

Be forever committed to the development of new applications for aluminum and aluminum-related materials and thereby
contribute to the improvement of people’s quality of life and environmental protection.

Principle of Conduct

Excite employees, impress customers, gratify shareholders, and be gentle to the EarthProtecting the
globalenvironment

Material Issues

INPUTA chieving the
Corporate Philosophy
Developing newmarkets and expanding
existing businesses by
responding to thesocial structure andenvironment
Building a robust, safe
and secure supply
chain

Risks

Business Activities

Financial CapitalShareholders’ equity
184.8 billion yen
Interest-bearing debt
146.2 billion yen

FY2019-21 Mid-termManagement Plan

1

Creating
new products andnew businesses

2

Investingresourcesin growth3

Reinforcing
the managementfoundation

Production sites(49 domestic plants and fivecountries overseas)
Capital expenditures
25.9 billion yen

Human CapitalEmployees

13,162
Annual expenditure on
education and training
16,200 yen/employee

Social CapitalS trong relationships that can
respond to customer needsWide variety of customer
groups through a broad
range of business fields

Natural CapitalElectrical energy usage
7.8 PJ
Water consumption
1 million m3

Market Sectors

Powder production

Foil and
Powder Products Business

Segregation
Slab

High-purity aluminum

Coils and sheets
Rolling

Sheet andExtruded Products
Business

Casting

Alumina, Chemicals,
and Ingot BusinessAluminum hydroxide (importing)Number of patents held
1,314
Research and development expenses
5,935 million yen

Value provided
directly to
stakeholders

Creating social
value

Customers

Alumina
production

Carbon neutrality
Circular economy
Technologicalinnovation
Changingdemographics
Advance of
globalization
Respect for humanrights/diversity &inclusion
Food issues

Corporate ethics
and governance

OUTCOME

Fixed CapitalIntellectual Capital

External
Environment

Responsible
procurement,
production andsupplyFY2020/
As of March 31, 2021

Aluminum hydroxide
Alumina

Billets

Extruded shapes

Processing

Extrusion

Melting andcasting
Secondary alloys

Caustic soda
Chlorine-related products

Scrap and recycling

Recycling

Provision of solutions
to problems

Automotive

Global environment

Electrical machinery,electronics andtelecommunications

Employees

Environment,
safety andenergyVarious processed products

Public facilities,
landscaping andarchitecture
Casting, forging, die-casting

Fabricated Products
and Other Businesses

Recovery

Foil and powder products

Foil rollingC limate change risks
Inter-material
competition risks
Supply chain
fragmentation risks
Risks of initiatives
being inferior to thoseof competitors

Happiness of
employees

Conversion into various types of capital through increased social value

Aluminum (importing)Opportunities

Providingsustainable
value

Environmental
impact, reducing
CO2 emissions

Safe and secure
workplace and job
fulfillment

Improvementof people’squality of life

Environmental
protection

Business partners andpartner companies
Co-existence andco-prosperity

Local communities
Transportation

Food andhealth,industrial
products

Coexisting with local
communities

Shareholders andinvestors
Improving corporate
value
Stable dividends

Accumulation of various types ofcapital through business activities

11

Integrated Report 2021

Integrated Report 2021

12

Basic Information

Value Creation

Foundations of Value Creation

Alumina, Chemicals, and Ingot Business

Segment Overview

Major Consolidated Subsidiaries

Toshihiro Matsuba,

Shuichi Asakuno,

Director in charge of
the Chemicals BusinessDirector in charge of
the Nikkei MC Aluminium Business

Net Sales:

91,181 million yen (down 11.3% year on year)

Operating:
Profit9,614 million yen (down 11.8% year on year)

102,833

21%

Business Summary

Net Sales (million yen)

117,008

Percentage of
Net Sales:

91,181

The alumina and chemicals segment manufactures aluminum hydroxide, alumina,
and various other chemicals. These products are used in a range of fields, including
as fire retardants, raw materials for ceramics, and industrial materials for the
manufacture of pulp and paper.
The Aluminum ingot segment manufactures a variety of aluminum ingots and is highly
regarded for the development of highly-functional ingots that cater to customers’ needs.

Overview of FY2020
2018

2019

2020
(Fiscal year)

Operating Profit (million yen)

9,616

10,902

9,614

In the Alumina and Chemicals Segment, net sales and operating profit fell short ofthe previous fiscal year across the entire segment due to slumping demand forrefractory materials and automotive products related to our flagship aluminumhydroxide and alumina-related products, and lower sales of flocculants andinorganic chlorides in relation to chemicals.
Aluminum ProductsCollection and Sorting
In the Aluminum Ingot Segment, demand forsecondary alloys destined for the key automotive
sector rebounded strong in Japan and overseas
Recycling Routein the second half of the fiscal year but declined
CO2 emissions
overall, resulting in a year-on-year decline in net
during%recycling: approx.
sales as well as a fall in operating profit for the* Based on 100% emissions
segment.
when manufacturing newaluminum ingots
As a result of the above, net sales in the
Alumina, Chemical and Ingot Business fell
11.3% year on year to 91,181 million yen, andMelting andSecondary Aluminum
Casting
Alloy Ingots
operating profit declined 11.8% year on year to
9,614 million yen.
Reduction of CO2 emissions through recycling

10

2018

13

Integrated Report 2021

2019

2020
(Fiscal year)

Manufacturing and Sales● Nippon Light Metal● Aluminium Wire Rod● Nikkei MC Aluminium● Nikkei MC Aluminum America● Nikkei MC Aluminum (Thailand)● Nikkei MC Aluminum (Kunshan)
Sales and Other● Nikkei Sangyo

Expanding the Chemical Business to the Global Environment Field
In the Alumina and Chemicals Segment, we help provide thermal countermeasures, safety and reliability for eco-friendly
vehicles, for which demand is increasing. Due to the increasing capacity and performance of the lithium-ion batteries
and related materials used in eco-friendly vehicles, issues have emerged such as declining performance or increased
risk of ignition due to the large amounts of heat generated. Heat needs to be dissipated to maintain performance. For
example, aluminum hydroxide or alumina has been developed and sold as a heat dissipating filler used as grease filled
in between motors and battery materials, which are a source of heat, and heat sink fins. Alumina products for separator
coating have also been developed and sold to reduce the risk of ignition and enhance safety.
With the spread of 5G and IoT, there is also growing demand for high-performance semiconductors. As a raw material
for ceramics, which are experiencing growing demand as semiconductor-related materials, we have succeeded in thedevelopment of ultra-low temperature sintered high-purity alumina, which is expected to enhance electrical properties
while reducing sintering temperatures during manufacturing by around 30%.
In the chemicals field we manufacture andHeat cannot be
Gaps are filled toGrease filled withtransferred easily due
ensure efficient heatsell flocculants and disinfectants for water
heat-dissipating
fillerto the gap
dissipation
treatment as part of efforts to tackle theissue of water stress. We have also
produced hydrogen from the electrolysis ofHeat sink fins
Heat sink finssalt. We will develop this into a new
business and effectively utilize it to help
Heat source
Heat source
reduce greenhouse gases.

Decarbonization Initiatives Through the Recycling Business
Since the smelting of new aluminum ingots consumes a lot of electricity, when fossil fuel-derived electricity is used, alarge amount of CO2 emissions are generated, causing major issues. On the other hand, aluminum is a metal that canbe easily recycled, and secondary aluminum alloy ingots manufactured through recycling are responsible for around
10% of the CO2 emissions as compared to the smelting of new ingots (based on NLM research).
Nikkei MC Aluminium, which handles the NLM Group’s recycling business in the Aluminum ingot segment, annually
supplies around 300,000 tons of secondary alloy ingots globally to various industries including the automotive industry,
which is promoting weight reductions. Aluminum scrap is the raw material needed for aluminum recycling, and its stableprocurement, both qualitatively and quantitatively, is what stands in the way of a stable recycling business. For thisreason, we are working to secure stable and high-grade aluminum scrap by building a closed recycling system tocollect the aluminum scrap produced as offcuts in the production processes of our customers. We will aim to realize adecarbonized society through these recycling efforts.

Integrated Report 2021

14

Basic Information

Sheet and Extruded Products Business

Segment Overview

Masahito Saotome,

Yoshiaki Ito,

Director in charge of
the Sheet Business

Executive Officer in charge of
the Nikkeikin Kakoh Kaihatsu Business

Net Sales:

97,850 million yen (down 3.3% year on year)

Operating:
Profit5,950 million yen ( up 67.3% year on year)2018

101,193

2019

97,8502020(Fiscal year)

Operating Profit (million yen)

7,152

5,950
3,556

2018

15

Integrated Report 2021

2019

23%

Business Summary

Net Sales (million yen)

107,835

Percentage of
Net Sales:

2020(Fiscal year)

Aluminum sheets and extrusion products are used in a wide variety of fields, suchas for automotive parts and railway cars in the transport industry, thick sheets andrelevant parts for semiconductor/ liquid-crystal manufacturing equipment, andfabricated sheets for PC/ tablet bodies in the electrical and electronics industry.
The NLM Group makes use of its technologies and expertise cultivated over many
years to proactively develop products that meet customers’ needs and to supply
highly functional sheets and extrusion products.

Overview of FY2020
In the Sheet Products segment, sales volume of thick sheets for semiconductor andliquid crystal manufacturing equipment rose year on year, and sales volume forfabricated sheet products surpassed the previous fiscal year due to continued strong
PC demand. However, due to the decline in sales for automotive applications andconstruction materials, net sales remained largely the same as the previous fiscal
year. Operating profit significantly rose year on year thanks to increased sales ofhighly-profitable fabricated sheet products.
In the Extrusion Products segment, despite seeing a rebound in demand for the
key automotive sector, due to the decline in sales related to construction materials,
net sales fell short of the previous fiscal year, while operating profit was largely flat
year over year.
As a result of the above, net sales in the Sheet and Extruded Products Businessfell 3.3% year on year to 97,850 million yen, but operating profit rose 67.3% to5,950 million yen.

Value Creation

Foundations of Value Creation

Major Consolidated Subsidiaries
Manufacturing and Sales● Nippon Light Metal● Toyo Rikagaku Kenkyusho● Toyo Precision Appliance (Kunshan)● Nikkei Siam Aluminium● Nippon Light Metal Georgia● Nikkei Extrusions● Nikkeikin Aluminium Core Technology● Shandong Nikkei Conglin Automobile Parts● Nikkei (Shanghai) Body Parts● Riken Light Metal Industry
Sales and Other● Nikkei Sangyo

Promoting Carbon Neutrality through Automotive Parts and Materials
Demand for electric cars and other eco-friendly vehicles has increased as part ofefforts to achieve carbon neutrality. Thanks to its light weight, aluminum is increasingly
used in various components, primarily as structural materials for eco-friendly vehicles.
In the Sheet and Extruded Products Business, we supply a wide range ofcomponents domestically and overseas, including the case, lid and bus bar*components that make up batteries, so that lithium-ion batteries, a critical componentof these vehicles, can be lighter and be used safely. Our battery cooling products
such as heat sinks that utilize the heat dissipating properties of aluminum have also
Nippon Light Metal Georgia, Inc.
been newly adopted.
Additionally, due to the demand for all kinds of lighter vehicle bodies, including in eco-friendly vehicles, the use of aluminumfor suspension components has also expanded. To accommodate these growing needs, in November 2019 we establishedNippon Light Metal Georgia in North America, with the aim of commencing production and supply from FY2022.
By expanding the provision of aluminum components with excellent lightweight and heat dissipation characteristics,
we will contribute to the promotion of carbon neutrality.
* Bus bars are conductors for conducting large amounts of electrical current

Promoting Horizontal Recycling

Horizontal Recycling

Cascading Recycling

Current aluminum recycling mainly involves “cascade recycling,” a form ofrecycling where the recovered aluminum cannot be used for the same
product it came from due to degraded material quality from contamination
with impurities and other factors. However, “horizontal recycling” hasbeen attracting attention as a form of recycling that does not involve
degraded quality, such as creating new aluminum cans from collectedaluminum cans.
To achieve carbon neutrality by 2050, the Sheet and Extruded Products
Business is working to switch over the main raw materials for slabs (sheet
materials) and billets (extruded materials) from new aluminum ingots to scrap-derived materials, by leveraging its many
years of recycling experience and accumulated knowledge in the secondary aluminum alloy business. Using thisapproach to reduce the purchase amount of new aluminum ingots, which involve large CO2 emissions, is expected to
drastically reduce CO2 emissions throughout the supply chain.
However, since the efficient collection of scrap needed to promote horizontal recycling is an issue, we will deepen
coordination with customers across various fields including areas where our strengths lie, such as PC cases and railway
car components as part of Group-wide efforts to build a closed recycling system.

Integrated Report 2021

16

Basic Information

Fabricated Products and Other Businesses

Segment Overview

Toshikazu Tanaka,

Minoru Sotoike,

Director in charge of
the Nippon Fruehauf Business

Executive Officer in charge of
the Panel System Business

Net Sales:

157,297 million yen (down 9.1% year on year)

Operating:
Profit

8,892 million yen (down 14.8% year on year)

172,975

36%

Business Summary

Net Sales (million yen)

180,259

Percentage of
Net Sales:

157,297

In Fabricated Products and Other Businesses, we deal with distinctive products
and services that are highly valued for their quality. These products include truck
bodies from Nippon Fruehauf Co., Ltd., commercial refrigerator and freezer panelsfrom Nikkei Panel System Co., Ltd., and fabricated aluminum products forinfrastructure, including for civil engineering and construction, from Nikkei
Engineering Co., Ltd. We also supply anodized aluminum foil for aluminumelectrolytic capacitors, automotive parts, and carbon products, among others.

Overview of FY2020
2018

2019

2020
(Fiscal year)

Operating Profit (million yen)

11,681

201817

Integrated Report 2021

10,440

2019

8,892

2020
(Fiscal year)

In the truck mounting business, part of transportation-related products, net sales
fell short of the previous fiscal year mainly due to a reactionary fall from prior run-up
demand associated with strengthened exhaust regulations and inventory
adjustments made by truck manufacturers, in addition to the effects of lower
demand in the truck business overall due to a shortage of drivers in Japan andimproved logistics efficiency. Operating profit increased year on year, in partreflecting the effects of falling material prices.
In the clean room sector of the Panel System business, there was solid demandfor 5th generation mobile communication system (5G)-related electronic component
plants and data centers, but sales for medical and pharmaceutical applications
declined. Segment-wide net sales and operating profit both declined year on year, inpart due to a decline in large-scale investments for food processing plants andpostponed plans among store locations in the freezing and refrigeration sector.
As a result of the above, net sales in the Fabricated Products and Other
Businesses segment fell 9.1% year on year to 157,297 million yen, and operating
profit declined 14.8% year on year to 8,892 million yen.

Value Creation

Foundations of Value Creation

Major Consolidated Subsidiaries
Sales and Other
Manufacturing and Sales● Nippon Light Metal● Nikkei Engineering● NLM ECAL
● Nikkei Information Systems● Nikkei Sangyo● Nikkei Logistics● Nikkei Heat Exchanger● Nikkei Panel System● Nikkei Matsuo● Nippon Electrode● Nippon Light Metal North America● Nippon Fruehauf● Fruehauf Mahajak

Towards Sustainability for Logistics that Never Stops
In the truck mounting business, part of transportation-related products, we havebeen working to reduce the weight of mountings and take other measures toreduce the CO2 emissions generated by truck and trailer transportation.
Additionally, although logistics is a part of social infrastructure that is essential forour daily lives, it faces issues such as the shortage of drivers due to the shrinking
working population, and progress is being made in the electrification of vehicles
FRUEHAUF CONNECT
trailer positioning management systemand streamlined logistics to achieve sustainable logistics.
In addition to providing logistics equipment, Nippon Fruehauf delivers “logistics that never stops” by preventing the
failure of logistics equipment through the provision of packaged products to conduct periodic maintenance. For trailers,
Nippon Fruehauf has also launched a new service utilizing IoT technologies, and provides services that support
customer operations, such as streamlining vehicle dispatch tasks and improving maintenance quality for transportation
providers, which are its customers. Going forward, Nippon Fruehauf will continue to help solve the issues faced by thelogistics industry not only by reducing the environmental impact in the manufacturing and use of logistics equipment,
but also by providing products and services to boost customer efficiency.

Creating Sustainable Low-temperature, Clean, Comfortable and Secure Spaces
The Panel System business is divided into three main business areas, the lowtemperature space business for food plants and low-temperature logistics
warehouses with metal sandwich insulation panels as its base products, the clean
space business for semiconductor, medical and pharmaceutical clean rooms, andthe comfortable/secure space business for data centers and similar facilities.
While low-temperature, clean, comfortable and secure spaces are an essential
MEDIQUAL® clean rooms for medical andpharmaceutical facilities
part of social infrastructure for various industries, the construction of these spaces
faces a worker shortage due to the declining working population and other factors. To address this, Nikkei Panel
System makes it possible to construct and install facilities with fewer people by providing a panel construction methodfeaturing far fewer work processes than conventional methods. Additionally, amid demands for further improvements inenergy consumption efficiency, creating insulation panels for various spaces reduces heat loss and simplifies
temperature management, which contributes to lower electricity consumption.
In recent years, Nikkei Panel System has leveraged its features and expertise in this field to tackle the development of
spaces used in medical and pharmaceutical facilities, particularly in the field of regenerative medicine. MEDIQUAL®
features a joint structure with less unevenness, making it easier to clean than ever before. Additionally, due to the uniquestructure of these panels, flexible spaces that combine air-tightness with earthquake resistance can be provided tofurther support the future of healthcare.

Integrated Report 2021

18

Basic Information

Value Creation

Foundations of Value Creation

Foil and Powder Products Business

Segment Overview

Major Consolidated Subsidiaries

Kaoru Kusumoto,

Yoshihiro Tomioka,

Director in charge of the Toyo
Aluminium Business Group

Director in charge of the Toyo
Aluminium Business GroupNet Sales:
Operating:
Profit86,240 million yen

3,311 million yen ( up 7.7% year on year)2018

88,94586,2402019

2020(Fiscal year)

Operating Profit (million yen)

5,114

2018

19

Integrated Report 2021

Percentage of
Net Sales:

20%

Business Summary

Net Sales (million yen)

95,349(down 3.0% year on year)

3,074

3,311

2019

2020
(Fiscal year)

Toyo Aluminium K.K. plays the leading role in the Foil and Powder Products
Business. We have established our position as a leading manufacturer bydeveloping a wide range of products that incorporate the special characteristics ofaluminum and are useful in society, industry and everyday life. They include
packaging materials for food and medical products, products for electronics,
aluminum powder and aluminum paste products. We develop new fields by utilizing
our own technologies as the foundation and provide a range of highly functional
materials and products in markets at home and abroad.

Overview of FY2020
Foil Segment: In the field of material foils, sales of exterior foils for lithium-ion
batteries and foils for cathode materials increased, reflecting strong demand for
PCs and rebounding automotive demand, especially in China. In the field ofprocessed foils, sales of processed foils for pharmaceutical packaging materials
declined, and sales of products for the antenna circuits of IC cards also fell.
However, segment-wide net sales and operating profit increased year over year
due to solid demand for water-repellent processed foil for food applications in
response to increased at-home consumption.
Powder and Paste Segment: Among powder products, there were strong salesof electronic material aluminum powder products for heat dissipation applications
thanks to brisk demand for PCs, but sales of aluminum nitride were sluggish.
Among paste products, sales volume dropped significantly due to fewer cars andvehicles being produced despite a rebound in demand for our flagship automotive
coating products. As a result, segment-wide net sales and operating profit fell shortof the previous fiscal year.
As a result of the above, net sales in the Foil and Powder Products Business fell 3.0%
year on year to 86,240 million yen, but operating profit rose 7.7% to 3,311 million yen.

Manufacturing and Sales● Toyo Aluminium● Toyo Aluminium Ekco Products● Toyal Europe● Toyal America● Toyal Zhaoqing● Hunan NingXiang JiWeiXin Metal Powder● Toyal MMP India
Sales and Other● Toyo Tokai Aluminium Hanbai

Bringing the Possibilities of Aluminum Foil to Society
Aluminum foil is widely used for everything from food and pharmaceuticalpackaging material to decorations and everyday goods, which utilize its
characteristic light weight and excellent functional qualities. The NLMGroup’s aluminum foil has excellent surface gloss and various features
including minimal pinholes and support for multi-color printing. To provide
new value to society, we are working to develop high-functionality, highperformance aluminum foil based on proprietary technologies and expertise.
For example, Toyal Lotus® packaging materials, which give the surface ofaluminum foil water repellent properties, are widely used as a lid material for
Toyal Lotus®
yogurt containers, and help reduce food loss by preventing the contentsfrom sticking to the lid.
Aluminum foil is also widely used for the outer material of lithium-ion battery laminate pouches. Lithium-ion batteries
are in widespread use across a range of applications from mobile devices to industrial equipment and automobiles, andaluminum foil from the NLM Group contributes to making those products lighter and thinner.

As a Material Supporting New Manufacturing Technologies
3D printing (laminate molding) technologies allow complex and elaborate
products to be cheaply manufactured, and also enable “digitaltransportation,” where the digital modeling data is sent instead oftransporting the physical product so that it can be produced on-site. For
these reasons, 3D printing is attracting attention as a next-generation
manufacturing technology with the potential to significantly transform
manufacturing. As 3D printing using aluminum alloy powder offers greater
freedom in molding compared with conventional production methods, it ispossible to make components lighter and manufacture products with more
3D printing using aluminum alloy powder
elaborate shapes.
The NLM Group’s aluminum alloy powder features world-leading quality, in part thanks to the evenly sized sphericaldesign of particles which enhance flowability and reduce internal printer clogging. Accordingly, demand for our powder
as a material for 3D printing has increased. We will continue to develop aluminum alloy powders suited to 3D printing
while pursuing joint ventures with universities and other research institutions.

Integrated Report 2021

20

Basic Information

Value Creation

Foundations of Value Creation

Financial and Non-Financial Highlights
Financial Highlights

Operating Profit /Ratio of Operating Profit to Net Sales

Net Sales
Net Sales (million yen)

481,439

500,451465,946448,381

Non-Financial Highlights

Operating Profit (million yen)
Ratio of Operating Profit to Net Sales (%)

432,568

Ordinary Profit /Ratio of Ordinary Profit to Net Sales
Ordinary Profit (million yen)
Ratio of Ordinary Profit to Net Sales (%)

30,225 29,893 30,052
24,607 24,194
6.7

6.2

6.0

5.6

5.3

29,533

U.S. and Europe
Asia
Japan

13,126

12,855

9,014

9,256

13,316

13,611

13,162Average Annual Hours Worked /Average Annual Overtime Hours Worked
Average Annual Hours Worked (hours per person)
Average Annual Overtime Hours Worked (hours per person)

2,124

2,120

31,08426,252
5.9

Number of Employees by Country / Region

23,475 24,030

6.2

6.1

5.0

5.6

9,670

9,891

2,062

2,047

Number of Employees Who Newly Took
Childcare Leave / Number of Employees Who
Newly Took Nursing Care Leave / Number ofUsers of the Shorter Working Hour Program
Number of Employees Who Newly Took Childcare Leave
Number of Employees Who Newly Took Nursing Care Leave
Number of Users of the Shorter Working Hour Program

10,052

67

88

101

61
6
3

2016

2017

2018

2019

2020
(Fiscal year)

Profit Attributable to Owners of Parent /Ratio of Profit Attributable to Owners of
Parent to Net Sales
Profit Attributable to Owners of Parent (million yen)
Ratio of Profit Attributable to Owners of Parent to Net Sales (%)

19,520

2016

2017

2018

2019

2020
(Fiscal year)

Total Assets / Shareholders’ Equity

448,623

2017

2018

2019

2020
(Fiscal year)

Equity Ratio / Return on Equity
Equity Ratio (%)
Return on Equity (%)

Total Assets (million yen)
Shareholders’ Equity (million yen)

467,199 481,303

2016

3,332

3,377

3,460

275

267

269

260

2016

2017

2018

2019

2,843
267
2020
(Fiscal year)

Average Annual Amount of
Expenditure for Education / Training
Average Annual Amount of Expenditure for Education /Training (thousands of yen per employee)

506,955

29.2

470,004
35.6

20,560

3,837

37.2

39.6

39.0

2016

24.9

282

266

238

2017

2018

2019

2020
(Fiscal year)

3.7

159,653

7,476

1.6

190,712173,957 187,854 186,275

2017

2018

2019

10.8

4.0

2016

2017

2018

2019

2020
(Fiscal year)

2020(Fiscal year)

Group-wide
Nippon Light Metal

Nippon Light Metal (%)
Toyo Aluminium (%)

2.59

2.63

2.03

2.57

2.63

2.55

2.60

1.05
0.91

1.93
0.56

0.58

0.54

2016

2017

0.52

11.4

3,366
2020
(Fiscal year)

2019

0.41
13.5

0.8
2016

2018

Frequency Rate of Lost-time Injuries

2.05

4.1

2017

54

Employment Rate of People with Disabilities

16.2
4.4

2016

64

*The Company has been compiling this data since FY2017.

25.0

18,01256

472*The Company has been compiling this data since FY2017.

2.47

37.6

302

2

2018

2019

0.27

0.27

1.8

0.00

2020
(Fiscal year)

2016

2017

2018

2019

2020
(Fiscal year)

2016

2017

2018

2019

2020
(Fiscal year)

2016

2017

2018

2019

2020
(year)*The Company has been compiling this data since FY2017.

Balance of Interest-Bearing Debt
Balance of Interest-Bearing Debt (million yen)

Net Profit Per Share /Net Assets Per ShareDividend Per Share
Before Reverse Stock Split (yen)Net Profit Per Share (yen)
Net Assets Per Share (yen)149,835

139,997 139,570

146,22910.0

3,008.26 3,081.54

2,809.28

100

9.00
8.0 8.00

9.00

1,682

8.00

80

1,579

132,622

1,490

6.0

290.88

1,390

1,314

4.0

133

113

40

2.0

Number of Violations of Laws
or Regulations
Environmental
In the Provision of Products or Services
Other

180

60

143

120.73

168

163

65.00

332.03

Expenditure Related to Social Contribution
Expenditure Related to Social Contribution (million yen)Registrations
Cumulative Patents

3,033.74

2,578.24

345.79Number of Patent Publications

After Reverse Stock Split (yen)

131
107

92

81

20

54.37
0
2016

21

2017

Integrated Report 2021

2018

2019

2020
(Fiscal year)

2016

2017

2018

2019

2020
(Fiscal year)

Note: The Company conducted a 10-to-1 reverse stock
split of common shares on October 1, 2020. The
figures are calculated as if the reverse stock split
had taken place at the beginning of FY2016.

0
2016

2017

2018

2019

2020
(Fiscal year)

Note: The Company conducted a 10-to-1 reverse stock splitof common shares on October 1, 2020. The graphlists actual dividend amounts regardless of whether
before or after the reverse stock split in question.

2016

2017

2018

2019

2020
(year)

2016

2017

2018

*Figures for FY2019 were adjusted.

2019

2020
(Fiscal year)

000

000

000

000

000

2016

2017

2018

2019

2020
(Fiscal year)

Integrated Report 2021

22

Basic Information

Value Creation

Foundations of Value Creation

Compliance

We engage in responsible business activities by“thinking and acting from other people’s point of view.”
PolicyCompliance at the NLM Group is not only about complying withlaws, regulations and social rules, but also about broadly
practicing honest and fair business activities. That requires us to“think and act from other people’s point of view,” and to value
empathy. Based on this philosophy, the NLM Group has
formulated the Group Compliance Codes, which serve as a
guideline governing the decisions made by all Group officers andemployees.
So that the Group Compliance Codes can be carried at all
times and referenced whenever needed, they are included in a
“handbook” that compiles the NLM Group Management Policy
and other important Group regulations. The handbook is alsotranslated into English, Chinese, Thai and Vietnamese anddistributed to all Group officers and employees.

Chapter 6: Responsibilities to shareholders and investors
Appropriate information disclosure, prohibition of insider trading,and other responsibilities
Chapter 7: Dissemination, additional rules
That officers and managerial employees should take the initiativein acting in accordance with this Compliance Codes and instruct
and supervise their subordinates; that they request that therelevant temporary staff agencies and subcontractors comply
with these Codes; that the violation of these Codes will result inpunishment based on established rules; and other rules

Items of the Group Compliance Codes and Summary
Chapter 1: Promotion of compliance
Definition, purpose, promotion, etc. of compliance
Chapter 2: Responsibilities to employees
Make ensuring the workplace safety and health, protecting
human rights, prohibiting discrimination and harassment, andother responsibilities to employees the top priority
Chapter 3: Basic internal rules
Appropriate use of company assets including intellectual property
rights, appropriate management of company secrets, appropriate
handling and reporting of operations, and other rules
Chapter 4: Responsibilities to customers and business partners
Safety and quality assurance of products and services; prohibitionof unfair competition including bribery, the creation of cartels andbid rigging; appropriate transactions with business partners; andother responsibilities
Chapter 5: Responsibilities to society
Legal compliance, reduction of environmental impact throughinitiatives such as the 3Rs, carbon emission reduction, andbiodiversity preservation, never having any relationship with
antisocial forces, active interaction with local communities andcontribution to their development, and other initiatives

23

Integrated Report 2021

Compliance
Promotion
Framework

Compliance Committee

Compliance Meeting
Handbook

The NLM Group conducts compliance meetings that involve theparticipation of all personnel at each workplace as grassroots
compliance activities. The compliance meetings are held twice ayear in various formats, such as for each workplace, with various
workplaces together or for each job title. Attendance rate at themeetings is around 95%. The meetings serve as the foundation
for compliance promotion. Participants discuss the complianceissues that are present at the workplace, and the occasion is also
used for compliance training. The information discussed at themeetings is reported in the form of minutes or memoranda, andshared within the Group.

(cases)Consultations

Reports

FY2020 Compliance Promotion Plan

Framework
The Compliance Committee (chaired by the president of NLM
Holdings) handles the promotion of compliance in the NLMGroup. The committee deliberates and decides on measures toverify issues and problems related to compliance in general, as
well as measures ensuring that compliance is established andfirmly takes root in the organization.
Ongoing issues are summarized in a Compliance Promotion Planand measures are implemented according to the plan. Progress
management of the measures is reported in the Compliance
Committee on a quarterly basis. For serious compliance issues that
occur suddenly, the various causes, corrective action, disciplinary
action and measures to prevent recurrence, etc. are reported. A
subcommittee on improvement measures may be established asneeded to investigate and deliberate over matters in the
Compliance Committee and provide necessary instructions. Matters
decided by the Compliance Committee are rolled out for
implementation by the CSR leaders and CSR promotion personnel
assigned to each Group company and department.

Number of Reports and Consultations Fielded by the NIKKEI HOTLINE

Plan

Initiatives forCompliance
Promotion

 peration of the Compliance CommitteeOAppropriate assignment of CSR promotion
managers and promotion personnel
CSR promotion personnel training(including induction training for newly
appointed promotion personnel)
Operation of the whistleblowing system
Inspection of the whistleblowing system ineach Group company and corrective action
 ormulation and execution of ComplianceF
Promotion Plan (Group-wide plan,
individual plans for each Group company)
Running of twice-yearly compliance
meetings involving full participation ateach workplace
Anti-bribery and corruption measures
Measures to deal with harassment
E-learning conducted for all Group
officers and managers
Power harassment prevention training for
production site managers and supervisors
Compliance awareness raising
Tiered training (new employees, midcareer employees, managers), training
for newly appointed officers, nextgeneration management training, training
for employees to be posted overseas
Distribution of the Compliance Handbook
Receipt of written pledges for complianceDissemination of message from thepresident and distribution/posting of
posters during compliance promotion
month (December)Distribution and dissemination ofawareness-raising tools (case studies,compliance bulletins, etc.)

Whistleblowing System
Overview of the System
As the NLM Group’s internal reporting system, the Group-wide
NIKKEI HOTLINE has been established. The NIKKEI HOTLINE
Regulations have been established to govern the framework andoperation of the NIKKEI HOTLINE, and revision or abolition of theregulations requires a resolution by the Board of Directors of NLM
Holdings. The NIKKEI HOTLINE receives approximately 40
whistleblowing complaints and requests for consultation every year.
To enhance the independence of the whistleblowing hotline,
since 2018 the previous external reporting hotline handled by
NLM Holdings’ consulting law office was switched to a dedicatedcontractor. Further, we have built a global hotline system by
establishing a contact office for whistleblowers that respond in
the first languages of the countries where we have major
overseas sites (English, Chinese, Thai and Vietnamese). In partdue to these developments, there has been an upward trend in
the number of consultations and reports fielded.
In addition to the NIKKEI HOTLINE, major Group companies haveestablished and operate their own whistleblowing systems. Thesesystems operate as more familiar systems that are used in parallel with
the NIKKEI HOTLINE. Compliance personnel at NLM Holdings inspect
the systems in place at each Group company and the regulations thatgovern them from the perspectives of legal compliance and theprotection of whistleblowers, and ensure that any necessary corrective
actions are taken in consultation with each Group company.

29

28

1
2016

19

15

14
4

2017

17 16

8
2018

2019

2020

(Fiscal year)

Whistleblower Protection
NIKKEI HOTLINE prohibits any disadvantage treatment ofwhistleblowers, those who cooperate with whistleblowing
activities and those cooperating with investigations, including
personnel transfers, demotions, salary reductions and otherretaliation and harassment. Information about each whistleblower
is disclosed only to the people in charge of the reporting hotline
and some of the people in charge of investigations, and theidentity of a whistleblower is never disclosed to persons who are
the subject of a whistleblowing complaint or related parties
including the relevant workplace or company without thewhistleblower’s consent. The people involved, including thewhistleblowers themselves, are prohibited from leaking any secrets
they have learned. When information about a whistleblower isdisclosed to the subject of a whistleblower complaint in the courseof an investigation, the subject of the whistleblower complaint isprohibited from contacting the whistleblower except for theminimum necessary business communication. Those who
investigated the whistleblower complaint or cooperated with theinvestigation at the workplace or company concerned are also
subject to a strict confidentiality obligation. Any violations of theserules result in disciplinary action. In particular, disadvantageous
treatment of whistleblowers is prohibited and any violations result insevere disciplinary action.

FY2020 Initiatives
In FY2020, the NLM Group inspected and revised its whistleblowing system in
response to revisions made to the Whistleblower Protection Act in Japan (June2020). In particular, we checked the regulations, systems and operational status
at 13 Group companies that have established and operate whistleblowing systems
and completed corrective action and improvements to deal with any deficiencies.
In addition, we revised the conventional group format training and education,
which has been difficult to conduct during the COVID-19 pandemic, andconducted these activities in a remote format. For officers and managers, wehave introduced an e-learning system to promote compliance at overseas
subsidiaries as well. In the first round of e-learning, training was provided to all
Group officers and managers on the themes of discrimination and harassment
prevention. Of the 1,620 current Group officers and managers, 1,537
registered for the training(registration rate of 94.9%),
1,487 of whom completed
the training (completion
rate of 96.7%).
Harassment prevention
training (group training) for
production site managers
and supervisors was
temporarily suspended dueto the COVID-19 pandemic,
but this was switched to aremote training format held
over two sessions, with 60
participants in total.

Integrated Report 2021

24

Basic Information

Value Creation

Foundations of Value Creation

Risk Management

We aim for sustainable improvement to corporate value by engaging
in appropriate risk management in harmony with business strategy.
PolicyThe NLM Group manages risks to its business strategy such as
direct and indirect losses, the suspension or shutdown ofbusiness, damage to credibility or brand image, and so on. We
classify the risks surrounding our business as strategic risks,financial risks, operational risks and hazard risks, and establish
and administer policies and systems that are appropriate for the
probability and impact of each risk.

Framework
The basic framework for managing particularly important risks foroverall Group management and each area of business has been
set forth in the Group Risk Management Regulations. Risks are
identified according to a process of identifying potential risks,assessing their likelihood, and assessing their impact. We develop
risk management policies and systems that include crisis
response plans for the identified risks, formulate annual plans,
and take action based on the plans. We have currently identified
the following eight priority risks. We respond to them by
establishing departments in charge and formulating management
plans for each of them.
Risk Management System
NLM Holdings

The department responsible for each risk recognizes eachpriority risk as something affecting the entire NLM Group andengages in management so that overall and individual risks are
mitigated and avoided, and so that a response can be put into
practice in the event a risk materializes.
The risk management status at each Group company ismonitored through audits conducted by the department
responsible for the risk, including quality audits, environmental
audits, labor audits and IT audits. The statuses determined fromthese audits are reported from the departments responsible forrisk management to the NLM Holdings Group Executive
Committee and subsequently to the Board of Directors as reportson the status of individual issues (as needed) or general status
reports (twice a year). The Board of Directors oversees the risk
management system based on these individual or generalreports, and the Risk Management Officer manages the status ofrisks while giving instructions as necessary.

Plan
FY2020 Major Risk Management Plan

Product andservice defects

E stablishment of quality assurance systems from the new
business development stages through to release to market
Verification of full quality check results from theprevious fiscal year and clearing up issues
Promoting operation of a management system for
harmful chemicals contained in products

Environmental
issues omplaint handling (support for reducing odor
C
complaints to zero)PCB processing
Achieving targets under new voluntary action plans(uncovering new energy-saving projects)
Development of environmental human resources(including official qualification holders)Formulation of new environmental targets
Start of carbon neutrality initiatives

Natural disasters/
accidents

 isaster preparedness at head officeDC onsidering the stockpiling of relief supplies atmultiple sites
BCP drills (including simultaneous disaster response)

Health and safetyissues n-site inspection of lost-time injuriesOGroup-wide roll out of measures to deal with similardisasters
Support for priority business sites
Information sharing through a database

Information
system issues

S tart of CSIRT* operation
Start of cloud-based service security measures
Server-intrusion testingMeasures to deal with targeted email attacks
Promotion of IT asset managementProtection of critical systems (running of disasterrecovery tests)
Raising the level of disaster recovery response

Leakage of trade
secretE stablishing a monitoring system for important
information

Board of Directors

Supervision

ReportingGroup Executive Committee
Risk Management Officer (President)

Management
Risk
Management
Departments

Central Product
Safety & Quality
Assurance Division

ReportingCentralPlanning OfficeGroup Companies

Central HR,
General Affairs andAccounting OfficeCentral CSR
and Audit
OfficeAuditing
Subsidiaries

Priority Risks and Risk Management Departments(1)

Product and service
defects(2) Environmental issues(3) Natural disasters/
accidents(4) Health and safety issues(5) Information system
issues(6) Leakage of trade secret(7) Export security(8) Failure in the timely
disclosure of information

25

Integrated Report 2021

Central Product Safety & Quality Assurance
Division
Person in charge of environmental protection
from the Central CSR and Audit Office
Person in charge of general affairs from theCentral HR, General Affairs and Accounting Office
Person in charge of health and safety issues
from the Central CSR and Audit Office
Person in charge of systems from theCentral Planning Office
Person in charge of legal affairs from theCentral CSR and Audit Office
Person in charge of legal affairs from theCentral CSR and Audit Office
Person in charge of PR and IR from theCentral Planning Office*CSIRT: Computer Security Incident Response Team. This is a team that responds tocomputer security incidents.

FY2020 Initiatives
Major Action Taken to Address Priority Risks
Subject risks

Initiatives and results

Evaluation

Quality audits of all sites (every year)
Product and service defects
Comprehensive checks of purchase andP.27
outsourcing management
Environmental audits of all sites (every
Environmental issues
three years)
Supporting measures to prevent theP.31
recurrence of environmental accidents
Responding to the sedimentation problem
Natural disasters/accidents at the Amehata Dam
Various drills based on potential
P.43
emergencies
Health and safety issues
P.35

On-site inspection of lost-time injuries
Support for priority business sites

Information system issues
P.47

Strengthened security (introduction of
CSIRT)Development of remote work
infrastructure

Leakage of trade secret

Enhanced security for remote work

Export security

No applicable problems

Failure in the timely
disclosure of information

No failures

Since its establishment in 2012, the NLM Group has addressed
the risk surrounding business both internally and externally with afocus on priority risks based on the aforementioned risk
management policy and system. Particularly with regard to safety,
quality and environmental risks, we monitor the status of risk
management at each Group company and business site in amanner that is independent of day-to-day operations, and haveestablished dedicated “administration departments” whose
primary mission is to consider responses to the new risks posted
by external factors. Each administration department is assigned acompany officer and multiple permanent staff. In addition toreflecting our recognition that safety, quality and the environment
are risks to be addressed on a priority basis for the NLM Groupbusinesses, it is also an acknowledgement that they are important
aspects to enhancing economic value. To take quality as an
example, due to its advantages such as resource recycling,material properties and price stability, aluminum has been used
across a wide range of fields from social infrastructure andhousing to transportation equipment, electrical and electronicequipment, healthcare and food-related applications. As theareas in which aluminum is used have spread, there is anincreased need to establish reliable inspection and testing
systems and sustainable quality assurance systems that areappropriate for each product and service. We see this as thegreatest responsibility of the NLM Group, and where our greatest
value lies.
However, from May 2021 onwards a series of JIS certification
violations came to light at Group companies. What is more, eachof the cases involved misconduct that had been continuing formany years, and included activities to cover up the misconduct.
As mentioned above, we recognize that reliable inspection andtesting systems and sustainable quality assurance systems arevital elements of the NLM Group’s efforts to achieve a sustainable
society, and we believe that from these recent events we have
not only lost the trust of stakeholders by failing to fulfill our social
responsibilities, but have also significantly damaged the value of
the NLM Group.
To fully clarify the scope of the improper conduct and suggest
measures to prevent a repeat occurrence, we have entrusted theinvestigation to a Special Investigation Committee* that wasestablished in June this year. Meanwhile, we have begun internal
efforts aimed at introspection and recovering the trust and valuethat has been lost. We are making headway in reevaluating andcorrecting the existing roles and approaches to risk management
at the Group, including risk response policies, the identification,
evaluation and control of risks, and contingency planning. At thesame time, we are receiving assistance from outside experts aspart of efforts to not only address these recent cases of improper
conduct and the business sites involved, but to also delve deep
into the root causes, including the NLM Group’s overall quality
management, governance, corporate culture and organizational
climate, and to prevent such incidents from happening again.
We will make every effort to revamp our risk management
system and become a company and group that can confidently
fulfill the trust of stakeholders as soon as possible.

Based on financial results materials from the fiscal year ended March 2019

Integrated Report 2021

26

Basic Information

Value Creation

Foundations of Value Creation

Quality

Ascertain obvious requirements andstrengthen systems to thoroughly enforce them
The NLM Group is promoting quality assurance and quality control
activities to ascertain what society and customers require as well
as related laws and regulations, to thoroughly ensure compliancewith those things as obvious requirements, and to continue toprovide safe and stable products and services.

President of NLM HD

Central Product Safety &Quality Assurance Department

PolicyOperation

Quality assurance departments

Manufacturing departments

Sales departments

Plant managers

Administrative departments

The NLM Group’s Management Policy declares that it “shallprovide socially useful, safe, and secure products and services tosatisfy and win the loyalty of customers.”
The Group’s quality policy is determined based on thisManagement Policy and in light of the issues that emerge eachyear. The Quality Policy is considered by the Central Product
Safety & Quality Assurance Division and decided on by the headof the division, who is the director responsible.

Group Quality Committee

Participation

Independence ofthe quality assurance departments

Group Quality Policy (FY2020)
1. We will ensure safety and quality at every stage from productand service development to mass production based on sites
and actual goods and the thorough implementation of rules
and principles.
2. We will accurately ascertain customers’ requirements andprovide safety and quality that exceeds them to satisfy and win
the loyalty of customers.
3. We will establish social credibility by strengthening legal
compliance and quality risk management.
4. We will cultivate human resources with the quality assurance
skills required to reduce global expansion risks.

Framework
The NLM Group has established Quality Assurance andManagement Regulations, positioned customer satisfaction as
the basic operating principle of its business activities, and strives
to thoroughly ensure quality assurance and management
activities.
In addition, by sharing the NLM Group Quality Policy with each
operating division, we are endeavoring to strengthen our quality
assurance and management framework.

27

Integrated Report 2021

In the NLM Group, the Central Product Safety & Quality
Assurance Division monitors complaints by collecting information
about complaints from Group companies and segments. In
addition, the causes of all complaints are analyzed. The results of
the analyses are provided to the Group Quality Committee toensure the information is shared.
We have established and enforce a rule requiring that, in theevent of a serious quality problem such as a recall or a defect that
may cause physical injury, information about the problem shall be
provided promptly to the overall Group regardless of who is
responsible for it.
In FY2020, nine problems were reported. In one example, we
received a complaint that the colors of exterior parts aligned
vertically together would be different depending on the time ofday. When we looked into the issue, we found that thephenomenon only occurs when the exterior parts are placed
vertically next to each other and are exposed to sunlight at certain
times of day. Until then, the exterior part in question had beenplaced in a horizontal configuration and the color had beeninspected. In response, we established new rules to inspect thecolor by taking into account the actual installation conditions,
including whether the parts are arranged vertically.
Number of serious quality accidents
Number of accidents

Audited Sites

Creation of Audit Plan

Quality Audits

Reporting of Audit Results

Formulation of Corrective Action Plans

Effectiveness and Appropriateness Checks

Implementation of Corrective Measures
Submission of Reports on
Corrective Action Completion

Receipt of Reports on
Corrective Action Completion
Confirmation of Corrective Action
Completion

Completion

Classification of Issues Identified in Quality Audits

Number of product recalls (out of the total number of accidents)

Manufacturing Process Management 7%

Improvement Status of Previously
Identified Issues 10%

10

Plan

1. We will ensure safety andquality at every stage fromproduct and service
development to mass
production based on sites
and actual goods and thethorough implementationof rules and principles.

E stablishment of a quality assurance
framework for new businesses
Support for the launch of new
products including cross-functional
and project-level releases

2. We will accurately
ascertain customers’
requirements and provide
safety and quality thatexceeds them to satisfy
and win the loyalty ofcustomers.

 onducting quality audits
CVerification of full quality check
results from the previous fiscal year
and following up on issues
Conducting individual and grouptrainingOrganizing contest to showcase
success stories
Independent studies of quality(Hinshitsu Jishuken)

3. We will establish social
credibility bystrengthening legal
compliance and quality
risk management.

 wareness-raising activities byA
Quality Committee, etc.
Confirming products covered bylegal standards
Promoting operation of amanagement system for harmful
chemicals contained in products
Conducting full quality checks
Swiftly responding to quality alerts

4. We will cultivate humanresources with the quality
assurance skills required
to reduce global
expansion risks.

7

6
4

4
2

Initiatives to make improvements at
key overseas sites
Development of the mother factory
system2016

2017

Product Creation 11%

98

Activity Plan for FY2020 Based on the Policy

Ensuring the Independence of the Quality Assurance Framework
To ensure the independence of quality assurance departments, the
NLM Group has established the Central Product Safety & Quality
Assurance Division under the direct control of the president. The
division has overall control of the quality assurance departments of
all Group companies and segments in the NLM Group. The Central
Product Safety & Quality Assurance Division is able to makedecisions independently and has the authority to conduct
inspections of production departments, carry out audits and issueorders for improvements. In addition, the quality assurance
departments of each Group company and segment are also
independent departments that do not belong to production
departments in order to ensure their independence.

Central Product Safety & Quality
Assurance Division(1) Sharing and utilizing complaint information

Structure of Quality Assurance Departments

Presidents of subsidiaries/
general managers of business divisions

Quality Audit Process

Results of Major Initiatives in FY2020

2018

25% Inspection Management Framework

3

2020

28 cases

Goal Management 11%

5

2019

36% Complaint Management(Fiscal year)(2) Quality audits
The Central Product Safety & Quality Assurance Division
conducts audits of all business sites once a year, including
overseas sites.
In FY2020, we audited 46 facilities in Japan. The quality audits
involved various checks, including the management status ofcomplaints, the new product launch process, delivery
specifications exchanged with customers, and the process forcreating and issuing inspection certificates provided to customers.
While no serious issues were uncovered, 28 matters were pointed
out. For example, when checks are performed on the validity ofcorrective action taken in response to complaints, the corrective
actions are often determined to be valid if there are no recurring
complaints about the issue, and there was a tendency to fail toreflect inspection results in management ledgers even whenmeasurement equipment had been inspected. In response, thesites concerned created draft plans for corrective action, and theCentral Product Safety & Quality Assurance Division checked thevalidity and appropriateness of the corrective action. We also
verified that corrective action regarding all of the identified issues
was complete.
86 proposals were also made to raise quality levels at each siteand establish better management standards. For example,
instead of having inspection personnel measure dimensions andrecord the results manually, we proposed using digital
measurement instruments that would automatically record
measurement values to reduce the risk of transcription errors.

(3) Full quality checks
As an initiative during Quality Month in November each year, we
conduct voluntary inspections based on a set theme, such asconfirming the consistency of specifications exchanged withcustomers, or verifying the management status of partner
manufacturers, in order to confirm the status of quality management.
In FY2020, the results of inspections of 35 sites subject toinvestigation did not produce any serious issues, but it was
discovered that progress of activities to prevent repeated complaints
occurring at suppliers and subcontractors had stalled. Each site
formulated improvement plans in response. The Central Product
Safety & Quality Assurance Division checked the effectiveness of the
improvement activities and continually followed up on the
improvements until completion.
Themes of Inspections Conducted by the Central Product Safety &Quality Assurance Division (Past Five Years)
Fiscal Year

Inspection Details

2016

Checking consistency of required specifications exchanged withcustomers

2017

Inspection certificate creation and issuance process

2018(1) List of all installed measurement instruments (deployment status)(2) Inspections of the product and service inspection measurement
data handling

2019

Operational processes when receiving orders for new products
and services or when 4M changes take place

2020

Management status at suppliers and subcontractors

Integrated Report 2021

28

Basic Information

Value Creation

Foundations of Value Creation Information about the improper conduct that resulted in the revocation of JIS certification andrequest to suspend use of the JIS mark, etc.
At the following four business sites operated by the NLM Group,
improper conduct was indicated in extraordinary certification
maintenance reviews conducted by the Japan Quality Assurance
Organization (JQA), a JIS certification body, and the businesssites in question received disposition notices from the JQA
revoking JIS certification, requesting the suspension of use of the
JIS mark, and so on.
Below, the details of the improper conduct is described alongwith particulars of the disposition imposed for each business site
involved.

1. Nagoya Plant of Nippon Light Metal Co., Ltd.:
Revocation of JIS Certification(JIS H 4000)(1) Although the JIS standards stipulate the tensile testing ofcollected specimens of non-heat-treated thick sheet products(with a thickness of at least 6.5 mm) using a method parallel tothe rolling direction, tensile tests were carried out on collected
specimens using a direction that differed from the JIS
regulations (perpendicular to the rolling direction) and the
products tested in that way were being shipped.
(2) In the JIS maintenance review conducted in February 2020,
the improper practices described in (1) above were falsified,and correct specimen sampling in accordance with JIS
standards was performed.

2. Nikkei Niigata Co., Ltd.: Revocation of JIS
Certification (JIS H 4040, JIS H 4080, JIS H 4100)(1) Some products that should not bear the JIS mark werelabeled with the JIS mark and shipped. Specifically, JIS
standards stipulate that for extruded shaped products with athickness greater than 25 mm, “mechanical properties are
based on agreement between the shipping and delivering
parties,” but the products were shipped with the JIS markdisplayed without entering into any such agreement with thecustomer.
(2) For some extruded bar products, JIS standards stipulate thatwhen the diameter, thickness or opposite side distance of the
product exceeds 20 mm, a round bar-shaped test specimen
be used for tensile testing, but during mass production testing
was conducted using incorrect shapes, while during the JIS
maintenance review tests were performed on the correct
shapes.
(3) Although JIS standards stipulate that a round-shaped bar beused for tensile testing when the wall thickness at the samplingsite exceeds 20 mm for extruded shaped products, tests were
performed using the incorrect shape (flat plate shape).
(4) According to JIS regulations, test specimens for retesting after
mechanical test failures should be taken from designatedlocations in multiples, but test specimens taken from different
locations in the same lot were treated as multiples, which
differs from the JIS regulations.

Figure 1: Sampling direction that differs from the JIS regulations describedin (1)
Figure 2: Test specimen shape that differs from the JIS regulations

Specimen

3. Nikkei Extrusions Co., Ltd.: Suspension of Use of
the JIS Mark, etc. (temporary suspension)(JIS H 4040, JIS H 4080, JIS H 4100)(1) Products were shipped without displaying labelinginformation specified in the JIS regulations.
(2) Products were shipped with labeling of quality
classifications not specified by the JIS regulations.
(3) Products outside the scope of certification were shippedwith JIS marks displayed.
(4) JIS marks were not displayed, but determinations weremade based on internal standards even though they shouldhave been based on customer requirements, and as aresult, products that did not meet customer requirements
were shipped and tests specified by JIS regulations were
not carried out.

The NLM Group takes the dispositions from the JQA with theutmost seriousness.
To start with, the NLM Group is conducting a thorough intraGroup investigation of each of the instances of improper conduct.
In addition, we are responding in earnest to the investigation toclarify the entire situation and determine its causes by the Special
Investigation Committee we established on June 9, 2021. We willthen take measures to prevent recurrences.
To ensure that a situation like this never occurs again, the NLMGroup has newly positioned compliance as its most importantmanagement issue. The NLM Group will undertake initiatives in aswift and reliable manner to strengthen its Group governancesystem and strive to regain the trust of all stakeholders.

4. Nikkei Kambara Co., Ltd.: Suspension of Use of the
JIS Mark, etc. (temporary suspension)(JIS H 4040, JIS H 4080, JIS H 4100)(1) Testing was conducted without collecting the number oftest specimens stipulated by JIS regulations and the
products were shipped displaying the JIS mark.
(2) Test specimens were prepared and tested with a different
shape than the test specimen shape stipulated in JIS
regulations, and the products were shipped displaying the
JIS mark.
(3) Products exceeding the length tolerances stipulated in JIS
regulations were shipped displaying the JIS mark.
(4) Products were shipped displaying the JIS mark without
taking the dimensional tolerance measurements stipulated
in JIS regulations.

Product

JIS certification-related business sites in the NLM Group (as of March 31, 2021)
Business Site Name

LengthNagoya Plant, Nippon Light Metal Co., Ltd.

Address
1-11-1, Koike, Inazawa-shi, Aichi Prefecture

JIS H 4000

Nikkei Niigata Co., Ltd.

1572-19, Tarodai, Kita-ku, Niigata-shi, Niigata Prefecture

JIS H 4040
JIS H 4080
JIS H 4100
JIS H 8602

Nikkei Kambara Co., Ltd.

5617, Kanbara, Shimizu-ku, Shizuoka-shi, Shizuoka
Prefecture

JIS H 4040
JIS H 4080
JIS H 4100

Riken Light Metal Industry Co., Ltd.

3-2-1, Magarikane, Suruga-ku, Shizuoka-shi, Shizuoka
Prefecture

JIS H 4100
JIS H 8602

Okayama Plant, Nikkei Extrusions Co., Ltd.

2100, Ochiaicho Abe, Takahashi-shi, Okayama Prefecture

JIS H 4040
JIS H 4080
JIS H 4100
JIS H 8602

Kambara Plant, Nikkei Sangyo Co., Ltd.

5407-1, Kanbara, Shimizu-ku, Shizuoka-shi, Shizuoka
Prefecture

JIS Z 3232

Sheet
thickness
Width

Correct sampling direction: parallel to the rolling direction
Correct shape: round-shaped bar test specimen

Specimen

Product

LengthSheetthickness
Width

Incorrect sampling direction: perpendicular to the rolling direction

Certified Standards

Incorrect shape: flat plate-shaped test specimen

29

Integrated Report 2021

Integrated Report 2021

30

Basic Information

Value Creation

Foundations of Value Creation

The Environment

Tackling the issue of climate change
to build a sustainable society
PolicyAt the NLM Group, we fully recognize the impact that ourbusiness activities may have on the environment. We haveestablished a basic environmental policy, under which we aretaking initiatives to realize sustainable businesses and asustainable society voluntarily and proactively, beyond complying
with related laws and regulations.
We recognize carbon neutrality as a management issue andstarting in FY2021, we will work to formulate a concrete action plan.

Basic Environmental Policy
Environmental issues are not just regional problems; they havespread and become serious to the point that they could affect the
global environment and the very basis for humanity’s existence.
Accordingly, efforts to built a society that coexists with the global
environment and a sustainable, recycling-oriented economic
society are the responsibility of nations, local governments,
citizens and companies alike. Based on this recognition, the NLMGroup proactively aims to achieve harmony with the environment
across every area of its corporate conduct.
This will lead to the protection of our shareholders, business
partners, employees and local communities - the foundation forour existence - and translate into sound business activities. In
addition, through socially responsible activities related to theenvironment, we will endeavor to create a truly prosperous
society as a good corporate citizen.

Action Guidelines
The NLM Group has established action guidelines related to theenvironment.
Compliance with environmental laws and regulations, etc.
We will comply with laws, regulations and other requirements
related to the environment.
Improving the efficiency of energy usage and curbing CO2
emissions
We will aim to improve energy efficiency and control CO2
emissions by improving the efficiency of manufacturing
processes and equipment, boosting production efficiency,
optimizing distribution and so on.
Promoting resource conservation and the three Rs
We will pursue the efficient use of aluminum and all resources
we handle, and work to promote the three Rs (reduce, reuse
and recycle).
C orporate activities that consider the impact on the environment
With regard to the location of production facilities, thedevelopment of new products and similar considerations, we will
use scientific methods to assess the impact on the environment
in advance, and take necessary measures such as efforts topreserve biodiversity. We will also do our utmost to reduce theimpact on the environment through our regular business activities.
Developing technologies that contribute to the environment
We actively develop products utilizing the properties ofaluminum which have a minimal impact on the environment,
and technologies such as processes that minimize
environmental impact. The effects gained are disclosed andprovided to society to aid in environmental conservation.

31

Integrated Report 2021

Planning of Environmental Activities
Action Plan

Purpose1

Reducing environmental mishaps Preventing environmental incidents

2

Conducting environmental
auditsLegal compliance, preventionof environmental incidents,
development of environmental
human resources

Development ofenvironmental humanresources

Compliance with laws
and regulations
Preventing environmental
incidents

Framework
Environmental management system
The NLM Group Environmental Committee deliberates and decides
on the core measures related to the Group’s environment
management. The committee is chaired by the president of Nippon
Light Metal Holdings Co., Ltd., and consists of its officers, presidents
of major NLM Group companies, and other members.
Matters determined by the Environmental Committee are fleshedout by the environmental control segment, which serves as thecommittee’s secretariat, and are made known at meetings ofenvironmental managers from 47 sites of 25 domestic companies
before actions are taken. Meetings of environmental personnel arealso held overseas (5 sites of 3 companies in Thailand, 9 sites of 9companies in China, 2 sites of 2 companies in North America, 1 siteof 1 company in Europe, and 1 site of 1 company in India) to share
information.
* the unit at which the environmental management system is applied.

FY2020 Plan

3

4

Greenhouse gas emission
reduction

FY2020 Results

Zero environmental mishaps

Three incidents, six complaints, six abnormalities

18 sites

16 sites (remaining two sites postponed to FY2021)

Ensuring that personnel hold statutory
qualifications

Fulfilled

Acquisition of legal knowledge

Conduct workshops on noise, vibrations and the Waste
Management and Public Cleansing Act

Having environmental managers take partin environmental audits of other sites

0 (cancelled due to the COVID-19 pandemic)

Prevention of global
warming

Achievement of emission reduction targets 1.9% reduction compared with the previous fiscal year
Consideration of new targets for the year 2050

Start of carbon neutrality initiatives
High-density: 95% achieved
Low-density: 89% achieved

5

Handling of PCB
processing

Compliance with laws
and regulations

Processing of high-density PCB
Processing of low-density PCB

6

Environmental
management at major
overseas production sites

Legal compliance andimproving environmental
management levels

Environmental audits (4 sites in China)
Environmental audits (3 sites in Thailand)
Meetings of environmental managers

0 sites (postponed to FY2021)
3 sites
Conducted in Thailand and China

7

Compliance with laws andregulations

Compliance with laws
and regulations

Disseminating information on revised laws
and regulations, preventing legal violations

Two workshops conducted with 38 participants

8

Activities to preserve
biodiversity

Preservation of
biodiversity

Promotion of biodiversity preservation
activities

Activities underway at all 47 sites (14 of which produce
activity reports)

Environmental Management System
Board of Directors of Nippon Light Metal Holdings Co., Ltd.
President of Nippon Light Metal Holdings Co., Ltd.

Group Executive Committee

Person in charge of environmental protection Operation
Environmental Committee
from the Central CSR and Audit Office(Chair: President of Nippon Light Metal Holdings Co., Ltd.)
ControlGroup companies’ sites

Meetings of environmental managers

Plan

Environmental Targets and FY2020 Results (Japan only)
Environmental Targets and FY2020 Results
Action Item
Energy saving activities Greenhouse gas emissions
and countermeasuresagainst global warming Energy consumption

Action plan
The NLM Group formulates an annual action plan through theEnvironmental Committee, while annual action plans comprisingelements common to sites are worked out at meetings ofenvironmental managers.
Environmental Committee

The committee strengths the environmental risk
management stance of the NLM Group as a wholethrough coordination between sites.
To realize a sustainable society, the committee actively
promotes environmental management.

To realize a sustainable society, the meeting:Promotes greenhouse gas reductions and strives to meettargets
Considers the preservation of biodiversity

Environmental Target (Japan only)

2030

2005

Greenhouse gas emissions per unit of sales at
1.82 tons CO2/million yen

2020

2013

12 PJ4/year or lessinitiatives underway,

not achieved

FY2020 Results (Japan only) Evaluation
1.57 tons CO2/million yen
11.0 PJ/year

2020

2013

350 tons/year or less

294 tons/year

NOx2 emissions

2020

2013

370 tons/year or less

300 tons/year

Water quality
control

COD3 emissions

2020

2013

110 tons/year or less82.6 tons/year

Total amount of discharged water

2020

2013

27 million m3/year or less20.7 million m3/year

Waste reduction
and recycling

Emissions

2020

2013

32 thousand tons/year or less30.5 thousand tons/year

Disposal (landfill)

2020

2013

3 thousand tons/year or less

3.0 thousand tons/year

2020

2013

Number of PRTR substances at 24 or less

22 substances

Chemical management

1 SOx: Sulfur oxides 2 NOx: Nitrogen oxides 3 COD: Abbreviation of Chemical Oxygen Demand
4 PJ: Petajoule, a unit of energy (1 PJ = 1,000 TJ = 1015 J)

New Targets1
Action Item

Meetings of environmental managers

To enhance the Group’s environmental risk management
stance, the meeting:Takes preventive measures and also takes permanentmeasures to prevent the recurrence of trouble that has
occurred in the past
Conducts environmental audits with a focus on field locations
Strives to develop human resources and improve capabilities
through environmental management education and having sitemanagers conduct environmental audits of other sites

Target Fiscal Year Base Fiscal Year

achieved

SOx emissions
1

Air quality control

Evaluation Legend…

Target Fiscal Year Base Fiscal Year

Environmental Target (Japan only)

Energy saving activities
and countermeasuresagainst global warming

Greenhouse gas emissions

2030

2005

Greenhouse gas emissions per unit of sales at 1.82 tons CO2/million yen or less2

Energy consumption

2024

2019

Energy consumption per unit of sales at 29.7 GJ/million yen or less2

Water quality
control

Total amount of discharged
water

2024

2019

Total wastewater per unit of sales at 5.0 × 10-5 million m3/million yen or less3

Waste reduction
and recycling

Emissions

2024

2019

Wastewater per unit of sales at 8.8 × 10-5 thousand tons/million yen or less3

Disposal (landfill)

2024

2019

Disposal per unit of sales at 5.4 × 10-6 thousand tons/million yen or less3

2024

2019

Number of PRTR substances at 24 or less

Chemical management

1 We will continue to perform monitoring regarding air quality control (SOx, NOx emissions) and water quality control (COD emissions).
2 Calculated based on an annual 1% reduction from the base fiscal year.
3 Emissions per unit of sales is calculated by dividing FY2019 emissions by forecast net sales in FY2024.

Integrated Report 2021

32

Basic Information

FY2020 Results

CO2 emissions including Scope 3 emissions (FY2020)

Addressing water stress (water quality control)(thousand tons CO2)

The amount of discharged water in FY2020 decreased by 0.6
million m3 (2.8%) year on year to 20.7 million m3. This included a
decrease of 0.6 million m3 (2.9%) to 20.4 million m3 in Japan. COD
emissions decreased by 16 tons (15%) year on year to 90 tons.
This included a 12.8 ton decrease (13.4%) to 82.6 tons in Japan.
Moving forward, the NLM Group will continue to monitor water
intake, water discharge, water consumption, COD emissions andso on, prevent the release of pollutants in light of the water stresssituation, and strive to make effective use of water.

CO2 emissions per unit of sales declined 1.9% year on year to
1.57 tons CO2/million yen.
The NLM Group also strives to reduce emissions in terms of
the logistics involved with obtaining raw materials and supplying
its products. For example, we are systematically upgrading andintroducing trucks that comply with the latest emissions
standards. Additionally, on the purchasing front we also strive to
make environmentally friendly purchases of raw materials (green
procurement) in anticipation of the future.

Change in CO2 emissions per unit of sales (Japan only)(Tons CO2/million yen)

2.19

2.09

2016

1.82

1.87

2017

1.60

2018

target

1.57

2019

2020

2030 (Fiscal year)

CO2 emissions (Group total)
Scope 1 and Scope 2 CO2 emissions declined by 60 thousand
tons CO2 (8.2%) year on year to 671 thousand tons CO2.
Emissions in Japan declined by 58 thousand tons CO2 (9.6%)
year on year to 548 thousand tons CO2. Overseas, emissions
declined by 2 thousand tons CO2 (1.6%) year on year to
123 thousand tons CO2. This mainly reflects a reduction of energy
consumption attributed to reduction in production and the declineof the CO2 emission factor for electricity, in addition to the
reduction attributed to energy saving activities.
Scope 3 emissions declined by 52 thousand tons CO2 (3%)
year on year to 1,721 thousand tons CO2. This mainly reflects a
reduction in the use of virgin metal due to a decline in production.

Change in CO2 emissions (Scope 1, Scope 2)
Scope 1

796

804

511

513

748
606
328

Scope 3

2,392

1,721

72%
■ Scope 1■ Scope 2■ Scope 3

Category 1■ Category 1 ■ Category 4 ■ Category 7■ Category 2 ■ Category 5■ Category 3 ■ Category 6

Scope 1: Direct CO2 emissions (such as from the combustion of kerosene or heavy oil)
Scope 2: Indirect CO2 emissions attributed to the use of energy including electricity
Scope 3: Indirect CO2 emissions from the supply chain
Category 1: Purchased goods and services
Category 2: Capital goods
Category 3: Fuel and energy related activities (not included in Scope 1 or 2)
Category 4: Upstream transportation and distribution
Category 5: Waste generated in operation
Category 6: Business travel
Category 7: Employee commuting[Basis for Calculations]* Boundary of calculation: 31 domestic consolidated subsidiaries (manufacturing)
14 overseas consolidated subsidiaries (manufacturing)* Greenhouse gas emissions (Scope 1 and 2) are calculated in accordance with the Act
on the Rational Use of Energy and the Act on Promotion of Global WarmingCountermeasures, and the following CO2 emission factors are used.
Electricity in Japan: The CO2 emission factor with T&D losses of each previous fiscal
year announced by the Electric Power Council for a Low Carbon Society
Electricity overseas: CO2 emission factors of the respective countries shown in CO2
FCOMB 2017 from the IEA
Fuel: The CO2 emission factor for each fuel is set by a ministerial ordinance from the
Ministry of the Environment(The CO2 emission factor for electricity in Japan was used for the hydroelectric power
generated at the Kambara Complex of Nippon Light Metal Co., Ltd.)* Actual values only relate to energy-derived CO2 emissions.

Carbon neutrality initiatives
In addition to efforts to reduce CO2 emissions, the NLM Grouphas begun considering carbon neutrality across all of its meetingbodies, including the Board of Directors, Group Executive
Committee, Environmental Committee and meetings ofenvironmental managers. Going forward, we will make united
Group-wide efforts to raise awareness and disseminate
information among employees and throughout the supply chain.

Our energy consumption in FY2020 decreased by 0.6 PJ (4.3%)
year on year to 13.4 PJ. This included a decrease of 0.8 PJ (6.8%)
year on year to 11.0 PJ in Japan.
The NLM Group promotes energy management and energy
conservation initiatives through the Group Technology Committeeorganized by technical and development segments. In addition,
the subordinate Energy Conservation Subcommittee shares plans
and examples of that have been put into practice at each site, andalso rolls out initiatives across the Group.

Scope 2462

15%

Initiatives for saving energy

Japan(thousand tons CO2)

Category 2 to 7

13%

CO2 emissions per unit of sales (Japan only)

548
302

285

291

286

278

246

2016

2017

2018

2019

2020

Energy consumption(Fiscal year)

16.9

Overseas(thousand tons CO2)

33

（PJ）

Scope 1

16.6

Scope 2

135

125

137

125

123

62

55

70

62

59

73

70

67

63

64

2016

2017

2018

2019

2020

Integrated Report 2021

17.1

(Fiscal year)

2016

2017

2018

14.0

13.4

2019

2020

Air quality control
SOx emissions in FY2020 declined by 35 tons (9.6%) year on
year to 330 tons. This included a 32 ton decline (9.8%) to 294
tons in Japan.
NOx emissions decreased by 69 tons (15.4%) to 380 tons. This
included a 61 ton reduction (16.9%) to 301 tons in Japan.

The amount of waste generated in FY2020 declined by 8.5 thousand
tons (18.6%) year on year to 37.1 thousand tons. This included a
7.2 thousand ton decline (19.1%) to 30.5 thousand tons in Japan.
The amount of landfill disposal increased by 0.1 thousand
tons (2.9%) year on year to 3.5 thousand tons. This included a
0.7 thousand ton increase (30%) to 3.0 thousand tons in Japan.

Chemical management
The number of PRTR substances in Japan in FY2020 was 22.

Environmental audits
At the NLM Group, personnel in charge of environmental
protection conduct regular environmental audits of 60 sites inJapan and other countries. The environmental audits involve
checking compliance with laws and regulations, emergency
response readiness, the likelihood that trouble similar toenvironmental trouble that has occurred in the past will reoccur,and the status of countermeasures in place.
In FY2020, environmental audits were conducted at 16 sites inJapan and three overseas sites in Thailand, and 32 problems
were identified.
Regarding compliance with laws and regulations, in relation toindustrial waste disposal it was discovered that insufficient waste
information was being provided to waste disposal contractors,
and corrective action was requested. In terms of emergency
response readiness, it was pointed out that no measures were inplace to prevent the inflow of oil into emergency rainwater gutters.
Corrective action was requested, including the installation of oilcatching equipment as well as the placement of sandbags toprevent the outflow of oil in the event of a leak. Additionally, toprevent the recurrence of environmental trouble that occurred in
the past, the audits discovered pipes near the site boundary that
could possibly release oil outside the site, and corrective action
such as installing splash prevention covers was requested.
After audits have been conducted, support is provided for thecorrective action as needed, and monitoring continues until all
corrections are complete.

At the NLM Group, we have developed and operate a quick
reporting system in Japan and overseas to respond promptly toenvironmental problems.
In FY2020, there were no lawsuits, fines, or forfeits related tothe environment.
In terms of environmental incidents, three oil or chemical leaks(two in Japan, one overseas) occurred, and there were six

Foundations of Value Creation

complaints related to the environment such as noise or odor
(three in Japan, three overseas) fielded.
For each incident that takes place, the site where the incident
occurred and personnel in charge of environmental protection
work together to communicate with the person who lodged thecomplaint while taking measures to prevent recurrence. Further,
we also collect information about measures taken at all sites of
the Group to prevent similar incidents and share the measurestaken at each site across the Group, as a part of our efforts to
reduce risk.
Number of environmental troubles that occurred（件） case(s) ■ Number of incidents■ Number of complaints

16

Waste reduction and recycling

Responding to environmental trouble(Fiscal year)

Value Creation

4

10
6

10

3

0

0

3

3

2016

2017

2018

2019

2020

(Fiscal year)* Incidents: Environmental issues that affect external parties, such as oil or chemical
leaksComplaints: The number of complaints (about odor, noise, etc.) lodged by external
partiesDevelopment of Environmental Human Resources
The NLM Group develops environmental human resources from along-term perspective to ensure compliance with laws andregulations, and to prevent environmental mishaps fromoccurring.
Encouragement to acquire public qualifications related to theenvironment
To prevent shortages of personnel who have acquired public
qualifications from a long-term perspective, we encourage sites
with few such qualification holders to increase the number ofqualified employees. In FY2020, 36 employees newly obtained
qualifications.
 raining sessions on laws and regulations to developTenvironmental managers
In FY2020, training sessions were held on the Noise Regulation
Act, Vibration Regulation Act and the Waste Management andPublic Cleansing Act. 38 people attended the training sessions.

Initiatives for preserving biodiversity
At the NLM Group, we have formulated Biodiversity Guidelines
and are advancing activities to preserve biodiversity at our sites inJapan and other countries.
The NLM Group Biodiversity Guidelines
Basic Policy
The NLM Group will take the following initiatives for thepreservation and sustainable use of components of biologicaldiversity.
Striving to understand the impact of business activities on
biodiversityE ngaging in biodiversity-friendly business activities and taking
other initiatives to reduce the impact of business activities on
biodiversity, to ensure the sustainable use of components ofbiological diversity
Striving to develop a system for promoting these initiatives

Integrated Report 2021

34

Basic Information

Value Creation

Foundations of Value Creation

Safety and Health

Safety comes before anything else.

machinery and equipment. We introduced risk assessments in1998 as a risk mitigation approach and have fostered thedevelopment of safety practitioners through widespread training.
Since 2011, we have focused on the development of skilled
safety personnel with the establishment of Safety Engineer (SE)and Safety Foreman (SF) training to facilitate a deeper
understanding of general machinery safety.
* JISHA: Japan Industrial Safety & Health Association

At the NLM Group, we promote safety and health activities undera simple basic policy: safety comes before anything else. Oursafety activities involve the employees of Group companies inJapan and in other countries, as well as temporary staff and theemployees of our contractors and suppliers. Accordingly, we havemade our policy easy for every worker to understand as a part ofour efforts to instill this policy in them.

The Group Safety and Health Policy has been created inaccordance with the basic principle of the NLM GroupManagement Policy, namely to create a safe and healthy
workplace and realize zero accidents. All workers (colleagues)
should be able to spend each day free of injury. To achieve this,we require everyone to work together to faithfully observe thebasics of safety and health. “Safety comes before anything else”
expresses those principles in a simple way.

Framework
The Group Safety and Health Committee is the highest decisionmaking body responsible for safety and health management at the
NLM Group. The top individuals representing labor andmanagement, including the president of NLM Holdings, presidents
of major Group companies and labor union representatives ofGroup operating companies meet in February each year as part ofthe committee to verify the results of activities in the current fiscal
year, determine the Group Safety and Health Policy for thefollowing fiscal year on the basis of those results, and to decideon the Group Safety and Health Regulations.
In addition, Safety and Health Committees are put in place ateach Group company and business site as prescribed by theIndustrial Safety and Health Act. Two meeting bodies have been
established to facilitate coordination with these committees.
The first is the Group Safety & Health Manager Meeting. This
meeting mainly comprises the business site managers and plant
managers who serve as the safety and health committee
chairpersons at each business site. Their job is to disseminate
and roll out the policies decided on by the Group Safety and
Health Committee.
NLM Group Safety and Health Management Framework
Group Safety and Health Committee

NLM Holdings President and Top
Top Management
Management of Major Group Companies of Labor Unions

Group Safety & Health Coordinator Meeting

35

Integrated Report 2021

Participation

Participation(cases)Japan

Safety andhealthcommittees
at eachbusiness site

1. Preventing
Accidents

2. Improving Field
CapabilitiesP romoting internal accreditation for safety andhealth management systems (SMS)Developing SMS promoters and safety managers,
rolling out in-house training

4. Improving
Technical
Capabilities

 roup-wide roll out of equipment safety standards
GRisk assessment education and training
Development of safety engineers (SE) and safety
foremen (SF)To achieve the Group Safety and Health Policy, we systematicallypursue initiatives aimed at preventing accidents, improving field
capabilities, enhancing management capabilities and improving
technical capabilities.
On preventing accidents, members of the Safety and HealthControl Department take part in local accident review meetingsand Safety and Health Committee meetings at business sites
experiencing frequent accidents as a priority business site
support measure, in an effort to improve safety leaves at theaffected sites through advice and guidance. In addition, since
FY2018 the Group Executive Committee has raised the topic ofsafety at the beginning of its meetings, having the officer incharge of safety and health report on all accidents that occurredsince the last meeting and share information. The officer also
responds thoroughly to instructions from senior management
regarding the details of safety and health measures taken.
In terms of improving field capabilities, the Safety and HealthControl Department works with each business site to conduct thenecessary safety and health training. On enhancing management
capabilities, three business sites in Japan have obtained
certification for ISO 45001, an international standard for
occupational safety and health management systems. Twenty
other business sites in Japan have received in-houseaccreditation for our own Safety Management System (SMS),
which utilizes the JISHA* style OSHMS. This accreditation system
was started in 2013 as part of efforts to build appropriate safety
management capabilities.
In terms of improving technical capabilities, in 2000 we createdequipment safety standards based on international safety
standards and have since promoted the improved safety ofPercent
visited

100%

22 22
17
11

2018

Overseas

12
8

9

2016

2017

19

11

16
12
7

2018

1.05

0.41

2016

2019

2020 (Year)(Fiscal year)2019

To prevent serious workplace injuries from occurring again, theGroup inspects all of the Group’s production sites to identify any
unaddressed factors that could cause a similar accident and to
make sure there are no other factors that have been overlooked.
By December 2020, of the roughly 6,500 cases of a worker being
pinched or caught in machinery or equipment, improvements
were completed in relation to about 6,000 cases.

Number of times thetraining was held
Trainees (total)
0.58

2018

2020

Safety and Health Education

0.91

0.56

2017

2019

Group-wide roll out of measures to deal with similar accidents

Frequency rate of lost-time injuries (Consolidated)Safety and health education

3. Enhancing
Management
Capabilities

100%

17

23

9
 n-site inspection of lost-time injuriesOG roup-wide roll out of measures to deal withsimilar accidents
Support for priority business sites
S haring information based on management
ideology, instructions from the president

100%

Number ofvisitsNumber of workplace injuries

16

FY2020 Action Plan

Number of workplace injuries judged torequire visitation

Workplace Injury Trends

PlanGroup Safety and Health PolicyGroup Safety & Health Manager Meeting

The second is the Group Safety & Health Coordinator Meeting.
This meeting mainly comprises the safety & health coordinators ofeach business site, who work as the managers of safety andhealth committee administrative sections at each business site.
This meeting convenes twice a year to verify operations at eachbusiness site and share information.

Percent of business locations where workplace injuries occurred that are visited

FY2018FY2019FY202056 times

31 times

19 times

985

622

291

To expand safety and health activities throughout the entire
Group, safety and health education covers a wide range of areas,from training on the safety and health management system tolegal education and training about machinery safety.

2020 (Year)FY2020 Initiatives
Third-party investigations of workplace injuries andthe prevention of their recurrence
When a workplace injury has occurred, the first thing we do is tohave the people in charge and other people from the businesslocation, including the safety and health manager, consider andimplement measures to prevent the recurrence of the injury.
Employees who are most familiar with the work site are expected
to consider and implement reliable measures. On the other hand,familiarity may also cause them to overlook something, make anincorrect assumption, or make some other error. There is also theconcern that, because those people work in the same site daily,
they may protect each other or hesitate to take more severe
measures. Accordingly, members of the Safety and Health Control
Department inspect the site from a third-party perspective,
separately from the people from the business location in question.
They inspect the site three times, one week, one month, and six
months after the workplace injury, to assess the effectiveness ofthe countermeasures that were implemented and whether they
have taken root firmly, among other points. This prevents workers
from getting into a rut and simply following procedures while
incorporating best practices from other business locations, andenables countermeasures based on specialized knowledge. In
FY2020, activities to prevent workplace injuries at businesslocations where workplace injuries occurred were supported bygiving instructions on how to streamline processes analyzing thecauses of workplace injuries and formulating countermeasures, by
explaining legal regulations, by advising them to receive training
from external institutions, and by taking other measures.

OSHMS leader training SHMS internal auditor trainingOTraining for newly appointed
safety managers
Foreman training
Special training for workers
handling dust

 pecial training for workers
S
handling low voltage electricity
Equipment safety training
Risk assessment trainingSafety engineer (SE) trainingSafety foreman (SF) training

Since FY2019, we have been developing materials with the aim ofcreating a system enabling each business site to conduct training
on its own based on the training conducted in the previous fiscal
year. Unfortunately, in FY2020 there were more occasions wheretraining had to be cancelled due to COVID-19, but the training
was switched to web-based courses whenever possible.

Confirm the site from the perspective of a third party(At the Kambara chemical plant)
Integrated Report 2021

36

Basic Information

Value Creation

Foundations of Value Creation

Human Resource Development

Maximizing human capital by developing andutilizing skills

Training course to develop the next generation of managerial employees
1. Fostering manager perspectives
 ectures from current top-level management
LUnderstanding visionary management, understanding CSR
etc.
and compliance, 
2. Gaining an overall understanding of the NLM Group

PolicyAs the NLM Group runs a wide range of businesses, the expert
knowledge required also covers a broad spectrum. That is why
we engage in human resource development that integrates the
specialized, individual training required in specific departmentswith the common Group training that all employees require. The
Group training includes training and education according tocertain themes and job types, such as level-specific training forthe next generation of managerial employees and newly
appointed managers, Fortuna training to facilitate the success offemale employees as well as seminars on production technology
basics for engineers and coaching-based training. There are alarge number of participants from Group companies every year.
In addition, through coordination at the Group Training Staff
Meeting, efforts are made to ascertain training needs and make
improvements to the educational program.

Recruitment and Training Systems
Periodic career track worker recruitment efforts are handled on a joint
basis for four Group companies, Nippon Light Metal Co., Ltd., Nikkeikin
Aluminium Core Technology Co., Ltd., Nikkei MC Aluminium Co., Ltd.,and Nikkei Information Systems Co., Ltd. In addition to recruitment, we
aim to foster a sense of unity that goes beyond company boundaries
by having new employees live together from the time of theiremployment offer to the three months of pre-assignment group training
after joining the company. This sense of unity is one of the pillars
supporting “Team NLM.”
The training conducted at each Group company forms the basis ofhuman resource development in the NLM Group, with training andeducation for job functions and skills commonly needed at every
company conducted on a Group-wide basis. Level-specific training
primarily handled by HR personnel has been rolled out across theGroup since the early 2000s, and now a total of around 30 Group
companies take part in eight training blocks. This approach advances
the “Team NLM” style of human resource development that connects
all Group companies at similar organizational levels.

3. Developing the skills needed for management Training course to develop the next
generation of managerial employees

4. Team assignment

The NLM Group conducts Training course to develop the next
generation of managerial employees to foster the development of
future managers.
The training was launched in FY2002 based on recognition of
the need to enhance the depth of the next crop of managementlevel employees to make full use of the power of consolidation.
The initial training placed an emphasis on developing a manager
mindset over an extremely short training period. Later, with theestablishment of NLM Holdings (becoming a pure holding
company) in 2012, we implemented major revisions to the training
in FY2014, as we realized that we needed to develop humanresources who would not only seek the autonomy of Group
companies but also be able to advance Group coordination andoverall optimization from Group management perspectives.
Under the training system, over ten trainees chosen fromamong Group companies undergo training once or twice a monthfor a period of one year, and at the same time they work ingroups to propose a “future vision for the NLM Group,” which istheir assignment. The trainees present their future visions to the
top management of NLM Holdings and other Group companies,
during which they take on wide-ranging feedback, questions andencouragement to cap off their one year of training. By having
employees as part of a reserve force of prospective managers
tackle issues for an extended period, they naturally form andstrengthen interpersonal connections to make the next generation“Team NLM” even stronger.

Education and Training System

Integrated Report 2021

New employees

OthersCoaching

NPS Trainer education

Top management
seminarsTechnology and production

Theme exploration

Putting commercialization
into practice

Dispatch to Nagaoka
University of Technology

New adult members

Foreign language training Foreign languages
and global literacy
in Japan / overseas

Jr. power-up

Dispatch foroutside training

Power-up

FortunaTeam
leaders
Task
leaders

Power-up mentors

 cquiring management skills including NPS, business strategy,Amarketing and team building
Nurturing a global mindset, liberal arts,etc.
risk management,  uture vision for the NLM Group and concrete action plan toFrealize it
5. Management review

Skills Transfer
Since the training program wasstarted, there have been eightclasses involving 98 trainees from 18
companies (85 of whom completed
the training). Twenty four of the
trainees have been appointed Group
company officers following thetraining, and going forward we willcontinue to systematically foster thedevelopment of Group managementhuman resources in these ways.

Scene from Training course to develop the next generation of managerial employees

Expanding the Diversity of Human Resources
The original business of the NLM Group is aluminum
smelting and refining, and due to the large number ofworkplaces operating continuously and frequent latenight work, we have long employed a predominantly
male workforce. However, following the oil shocks ofthe 1970s, we gradually downsized this business, andas a corporate group that has developed a range ofbusiness fields in the years since, there is no doubt thatdiversity in human resources will become anincreasingly important aspect to opening up a new
dimension to our operations in the future.

VOICE

Production technology
basics seminar

New employees

By Theme and Job Function (Partially)

Management

Mid-career employees

Power-up senior mentors

Operators

Managerial staff
Mid-level andjunior staff

Assistantmangers

Supervisory positions

Generalmanagers

Third generation

Sectionmanagers

Managers

Next-generation managers

Staff

Mid-level andjunior staff

Managerial staff

Officers

37

Level-specific training (Regular Employees/Regional)
ForemenLevel-specific training (Career Track/National)

Understanding NLM Group Management Policy, analyzing thefinances of the NLM GroupTour of major Group company plants and other locations,etc.
exchanges between participants, 

Nippon Light Metal Co., Ltd. has aimed to make atleast ten percent of its career track employee hires
females, and achieved 23% in FY2021 (new employees
hired in April 2021) on this metric.
In 2015, Nippon Light Metal Co., Ltd. established Nikkeikin
OhLiS Co., Ltd. as a special-purpose subsidiary for theemployment of persons with disabilities, and as a result ofcontinuing to develop this field of business, as of June 2021
our hiring rate for persons with disabilities has reached2.6%, exceeding the statutory employment rate by 0.3%.
Fifteen (over 2%) of Nippon Light Metal Co., Ltd. areforeign nationals, and while this is not a large number,in recent years we have been considering the utilizationof these human resources in anticipation of futurebusiness expansion. Accordingly, each year we havecontinued to hire foreign national employees on aregular basis, taking into account expert knowledge andlanguage skills so that we will have the humanresources necessary to expand into areas in the longterm, five or ten years from now.

Due to the oil shocks of the 1970s, for a time the NLM Group was
hesitant to hire new employees. As a result, the mix of ages of workers
on-site is uneven, and although the industry began to rejuvenate in the
2000s, we were concerned about the transfer of skills. In addition, themid-career and junior employees expected to lead the future had alack of leadership experience, leading to concerns about how wewould rejuvenate the leadership team.
For this reason, Nippon Light Metal Co., Ltd. launched “powerup training” starting in FY2001. This was designed to make up forthe lack of experience on-site through education, andsystematically develop a leadership team for the next generation.
This one-year long-term practical training has produced a steadystream of excellent on-site leaders, and by FY2021, we have seen
383 employees from 16 Group companies complete the program.
Over two decades of training, the leadership styles of “giving it yourall” and “setting an example for others to follow” while encouraging
junior employees to be in independent and self-motivated hastaken root at each site across the NLM Group and greatly
contributed to the retention of human resources.
To cap off their one year of training, the trainees givepresentations on the results of their activities in front of thepresident of NLM Holdings and other top executives. They are thenthanked for their efforts directly at a gathering held afterwards. Top
management’s direct commitment to developing human resourcesin the field is a key feature and has played a big part in maintaining
and enhancing the Group’s field capabilities.

Respecting tradition while ensuring a flexible workplace environment

After coming to Japan to pursue a second foreign language, I decided to stay and continue
working in order to experience Japanese working environment.
During my job hunting, I was firstly drawn to Nippon Light Metal(NLM) for its diversity inbusiness activities which can allow me to be exposed to various experience and its welfare
benefits which will support and make living overseas alone less challenging. In addition,
throughout the approaches and styles in the interview, I realize that despite the traditional image
with long and profound history, people in NLM are adapting and do not take gender or
nationality for granted.
From the first year until now, I was designated in Accounting Department Group. However,thanks to job rotation system available here, I get an opportunity to be in charge of different
departments and companies in each year. What more to be grateful is my colleagues because
without them teaching and supporting me there would not have been this version of me. All the
relationships built is one of my most valuable memory in Japan.

Pantitra Valanaraya
Accounting Department, Nippon Light Metal Co., Ltd.
From Thailand. Joined Nippon Light Metal in 2017.

Integrated Report 2021

38

Basic Information

Value Creation

Foundations of Value Creation

Labor Management

Creating a workplace where employees can fully
develop their abilities as freely as possible.

as part of the culture at business sites. A strength of the labormanagement relationship is that the company, its business sites
and departments each share issues with employees, creating a
united front towards improvements.

Child and Family Care Support

PolicyIn keeping with the NLM Group Management Policy, the NLMGroup aims to “create a workplace where everyone assumes
responsibility for and takes pride in his/her work, and where
everyone can fully develop his/her abilities as freely as possible.”
We will develop an environment that sincerely addresses
employee feedback through individual employees and labor
unions and enables employees to continue working with peace ofmind, and strive to create a workplace full of the joy of working.

Framework
As the NLM Group maintains various business operations andemploys a wide range of employees in terms of profession andemployment conditions, unified labor management can bedifficult, and the labor management framework is predicated onGroup companies implementing their own efforts in this area. At
the same time, to ensure that those efforts are appropriate, we
conduct labor audits, engage in coordination through meetings ofHR personnel and share information by rolling out best practices
across the organization as part of efforts to continually improvelabor management levels on a Group-wide basis.
The minimum requirement for a workplace where employees
can continue to work with peace of mind is compliance withlabor-related laws and observance of employment regulations.
Since FY2014, the NLM Group has been conducting labor audits
at Group companies with HR personnel playing a central role.
During the labor audits, a checklist of 215 items in total related
to employment and wage management is used, to confirm thatappropriate labor management is being implemented at eachGroup company. The checklist is revised each year to reflectrevisions to labor laws and changes to key issues. As part of theaudit process, related documents are submitted in advance, andchecks are performed to verify that company rules and regulations
are in line with current laws and regulations, and that various
notifications have been properly made to supervising authorities.
Then, during the actual audit, problems are pointed out, guidanceon corrective measures is provided, and any issues with labor
management are shared. When the audits were first started, HR
personnel conducted audits of Group companies as an auditing

Scene from the Group HR Personnel Meeting (January 2020)

39

Integrated Report 2021

team, but under the current framework, where the HR personnel
at major Group companies take part in the auditing teams, as wellas having companies make improvements in response to
identified issues, in-depth knowledge and best practices are
dynamically shared across the Group. This is part of efforts toraise the level of labor management on a Group-wide basis.
In addition, a Group HR Personnel Meeting is held annually asa chance to share Group-wide labor issues and the measures
being taken to address them. In recent years, with the strict
application of equal pay for equal work principles, information has
been shared between companies when setting appropriate wage
levels for temporary workers. As revisions to labor laws can be
wide-ranging, we try to practice appropriate labor managementby sharing insight through these meetings and similar activities.

Labor-Management Relations
Nippon Light Metal Co., Ltd. believes that good labormanagement relations are the foundation of sound corporate
development. Accordingly, the company has entered into a union
shop agreement with a labor union, and in addition to economic
negotiations, has created many opportunities for exchanges ofviews between labor and management.
Regular Company-wide Labor-Management Meetings are held
twice a year and the company side, involving all internal directors
from the president down, describes management policy, themanagement situation and key management issues to the labor
union and engages in exchanges of opinion. Labor-Management
Committee Meetings organized by the officer in charge of
personnel affairs are also held twice a year. At each business site,
regular Individual Labor-Management Meetings are held twice ayear, as opportunities to explain and exchange opinions regarding
individual business issues specific to each business site. The
Labor Agreement states that “the Company and the union shallendeavor to implement those items discussed at labormanagement meetings for which there is a consensus of opinions
without delay,” and accordingly matters of agreement arepromptly implemented.
In addition to regular meetings, the Working Conditions Review
Committee convenes to exchange opinions between labor andmanagement regarding specific matters pertaining to working
conditions. For matters that involve significant changes to working
conditions such as revisions to personnel and wage systems or
extension of mandatory retirement age, review takes placethrough subcommittees that meet almost monthly over several
years to flesh out committee discussions even more. The detailsof labor-management discussions and their progress are
disseminated by the labor union to its members to make changes
to systems more acceptable.
There was a time when Nippon Light Metal Co., Ltd.
restructured itself, including withdrawing from some businesses,
in response to the oil shocks of the 1970s. Under circumstancesthat could have led to extremely adversarial labor-management
relations, the company shared as much information as possible
about the management situation with the labor union andengaged in frank exchanges of opinions. These actions cultivated
the good labor-management relations based on trust that are
enjoyed today. These practices of sharing information about
management status and issues is not limited to the relationshipbetween the company and the labor union; it has also taken root

At Nippon Light Metal Co., Ltd., we believe it is insufficient tosimply hire more female employees to support their advancement
in society and leverage their abilities; we also think that it isessential to create an environment in which employees can engage
in fulfilling work even after childbirth and balance childrearing withwork. Childcare leave can be taken until an employee’s child isthree years of age* (the law stipulates childcare leave up to one
year of age as a general rule, up to a maximum of two years ofage). In addition, for the shortened working hour system forchildcare, which is especially needed when an employee seeks tobalance childcare responsibilities with work, we have progressively
extended the period of eligibility in light of internal needs, frompre-school age to the third year of elementary school and then to
the sixth year of elementary school (the law requires this beoffered only up to the day before an employee’s child reaches
three years of age), in order to develop a system that is easier for
employees to take advantage of. We have also made changes tonursing leave. Since FY2018 this leave has been treated as paid
leave, and the leave usage rate has increased as a result.
With the arrival of an aging society, support for balancing familycare with work has also become increasingly important. At
Nippon Light Metal Co., Ltd., employees can take a family careleave period of 186 days (the statutory period is 93 days), and aswith nursing leave, family care leave is now paid.
* Until the day before the corresponding age is reachedNippon Light Metal Co., Ltd. completely renovated the cafeteria
at its plant in FY2019. While the previous cafeteria offeredinexpensive meals, nothing about the atmosphere, fixtures, plates
or anything else was above average, and its function as a place
to enjoy meals and recharge with the vigor to work was limited.
With the renovation, the cafeteria was transformed into a brightand clean area. By installing family restaurant style booth seatingin the dining area, it was turned into a relaxing cafe-style spacethat can be enjoyed even outside meal times, and is also utilized
as a place where workplace members can meet for discussions.
Improvements were also made so that the cafeteria can be used
as a place where many employees can gather together, making ita facility where events that involve eating and drinking can beheld comfortably.
The menu was also improved and expanded, and employees
are very happy with the options to choose from. Use of thecafeteria increased after the renovation, with employee feedback
suggesting that “the space is brighter, and the food tastes better,
partly thanks to the improved atmosphere.”At the Group head office, which was relocated at the sametime as the plant cafeteria renovations, a dining and cafe spacethat takes up the entire 16th floor, the topmost floor of thecompany offices, was developed. This has also proved popular,
and is used by roughly 1,000 Group employees as a dining space
and a space for internal and external meetings.
Our expectation is that not only will the joy of food give
employees the vigor to work, but that the completion of this newshared space that can be utilized in various situations will
promote greater communication and strengthen the “Team NLM”
mindset.
(Currently due to the COVID-19 pandemic, face-to-face eating
is prohibited at both cafeterias, and silent eating is being
thoroughly enforced.)

Number of Employees Using the System of Shortened Working Hours for Childcare and Family Careperson(s)Nippon Light Metal Co., Ltd.

Companies other than Nippon Light Metal Co., Ltd.

76
67
48

19

21

25

2018

2019

2020

(Fiscal year)

Boundary: Consolidated subsidiaries in Japan

Acquiring Kurumin Mark certification as acompany supporting childcare under the Act
on Advancement of Measures to Support
Raising Next-Generation Children

Acquiring Grade 2 Eruboshi certification as
a company demonstrating outstanding
performance based on the Act on Promotionof Women’s Participation and Advancementin the Workplace

Improvements to the Employee Cafeteria
Having a workplace where employees want to work and fully
demonstrate their capabilities is an important aspect to creating
corporate value, and enhancing the welfare aspects of working
conditions plays no small role in this.

Scene of the renovated cafeteria

Integrated Report 2021

40

Basic Information

Value Creation

Foundations of Value Creation

Supply Chain Management

We achieve responsible procurement throughproactive procurement activities
PolicyThe NLM Group has established a CSR procurement policy forcentrally procured products, built a flexible procurement system
for responsible procurement, and aims to realize a sustainable
society through proactive procurement activities.

CSR Procurement Policy
1. Fair and good-faith procurement
The NLM Group possesses an outstanding global
competitive advantage in all areas of quality, price, delivery
lead times, stable supply and service, and we requirepartners who share our CSR principles not only in Japanbut also throughout the world. In addition, we make a pointof always engaging in trade on an equal footing withpartners who have been fairly selected through freecompetition, and endeavor to build and enhance mutually
beneficial partnerships. We are always open to working withnew business partners and strive to provide them with thenecessary information.

2. Elimination of antisocial forces
The NLM Group has no business dealings with antisocial
forces. We always strive to act sensibly with basic legal
knowledge, social common sense and a sense of justice, toavoid involvement in illegal conduct or antisocial activities.
In the event we receive unjust demands from outside theGroup, whether or not from antisocial forces, we will take afirm stance and not try to solve issues by giving money or
making other accommodations.

3. Procurement compliance

The NLM Group aspires to a society which accepts andworks with a diverse range of personalities and values, andrespects the basic human rights of all people. Even in the
supply chain, we promote procurement that complies withlaws and regulations while also considering human rights,
the labor environment, safety and health.
Additionally, we do not use the five minerals (tin,tantalum, tungsten, gold and cobalt mined in the
Democratic Republic of the Congo and surrounding
countries (3TGC, so-called conflict minerals).

6. Business continuity planning (BCP) initiatives
The NLM Group recognizes that the stable supply of
products are a part of corporate social responsibility.
Accordingly, with the help of our business partners we work
to formulate plans that lay out recovery procedures for
ensuring personnel and business operating systems andsecuring equipment and raw materials, in anticipation ofdifficulties engaging in regular business operations in theevent of a natural disaster, infectious disease outbreak orother emergency.

7. SDG-related Initiatives
The NLM Group recognizes that SDG-related initiatives and its
business activities are two sides of the same coin and should
be linked. We work together with our business partners to
help realize a sustainable society as part of those initiatives.

Framework

The NLM Group engages in procurement in accordancewith various laws, regulations and norms.
In addition, to ensure thorough compliance with thispolicy, we endeavor to raise awareness concerning
procurement compliance, such as by conducting training
on related laws and regulations and running workshops asneeded for related departments within the Group.

The NLM Group runs a wide range of businesses and alsopurchases a broad array of items. For this reason, our purchasingsystem has adopted the basic policy of giving autonomy to eachfield of business while engaging in moderate Group coordination.
We are trying to anticipate and solve a range of issues to achieve
responsible procurement through Group coordination. Every six
months, we hold a Group Procurement Personnel Meeting toshare information, issues and solutions related to procurement.

4. Control of chemical substances in productsGroup Procurement Personnel Meeting

With the cooperation of business partners, the NLM Group
works to control the chemical substances contained in its
products.
T he NLM Group’s control policy on the chemical
substances contained in products:(1) Comply with domestic laws and regulations including
the Act on the Evaluation of Chemical Substances
and Regulation of Their Manufacture, etc.
(2) C ontrol the chemical substances contained in
products in consideration of the RoHS Directive,
REACH regulations and so on.

41

5. Consideration of human rights, the labor
environment, safety and healthIntegrated Report 2021

The purchasing unit is responsible for developing measures toensure responsible procurement, and also shares the Group’s
advanced initiatives as model cases. The purchasing unit holds
Group Procurement Personnel meetings attended each time byover 50 purchasing staff from NLM Group companies.
The meetings are used to share information about CSR
procurement policies, specific measures and market information
about procured items. Purchasing staff also exchange opinions
about CSR procurement policies and various measures inrelation to responsible procurement. Attendees take theinformation and opinions gained at the meetings back to theirrespective Group companies where they engage in information
sharing and raise awareness. In addition, we iterate on asolution cycle where issues occurring at individual companies
are raised at the following meeting and proposed as new issues.

Plan
Main Action Plan for FY2020
Enhancing and raising awareness of procurement complianceInitiatives related to business continuity planning (BCP)in the supply chain
Consideration for human rights, the labor environmentand safety & health in the supply chain

FY2020 Initiatives
Enhancing and raising awareness of procurement compliance aising awareness related to the Act against Delay inR
Payment of Subcontract Proceeds, etc. to Subcontractors
To realize fair and equitable trade, the NLM Group strives toraise awareness among purchasing staff about the Act against
Delay in Payment of Subcontract Proceeds, etc. to
Subcontractors. Each year a workshop on the act is organizedby the purchasing unit. In FY2020 the workshop was held
remotely over ZOOM instead of in-person due to the COVID-19
pandemic, and 100 staff participated.
Additionally, from FY2021 we have begun conducting audits
related to the act for Group companies with business partners
to which the act applies. We have adopted an auditing method
which starts with document-based fact-finding at each site, andthen uses a five-point scale to evaluate on various items,
including “level of recognition, understanding and awareness ofdepartment managers,” “level of recognition, understanding andawareness of staff,” “business tool development level,”“education and awareness-raising development level,” “safety
relating to the four obligations,” and “safety regarding the 11
prohibited items.” The first audit was conducted at Group
company Nikkei Hokkaido Co., Ltd. The audit results are usefulfor improving operations at the site in relation to the Act against
Delay in Payment of Subcontract Proceeds, etc. to
Subcontractors and help build better compliance systems.

Conducting supplier questionnaire surveys
Purchasing staff send the NLM Group CSR Report to suppliers
each year, and also conduct CSR procurement questionnaires.
We have been sending out our CSR reports since FY2011, andbegun conducting the CSR procurement questionnaires in
FY2014. In FY2020 we sent out questionnaires to around 400
companies and received responses from 48.3% of them.
According to the previous questionnaire, 37% of suppliers
had already put BCPs into place, but in the latest questionnaire
this had risen 10 points to 47%. This suggests that some of the
suppliers who responded that they were currently formulating orplanned to formulate BCPs in the previous questionnaire actually
worked on developing BCPs, and that BCP initiatives havesteadily gained traction.

Have you formulated business continuity plans in anticipationof a major disaster occurring?
■ BCPs are already established

22%

47%

■ BCPs are currently being formulated■ We have not formulated BCPs, but plan toroughly within the next year
■ We have not formulated BCPs and have noplans to do so

11%
20%

Have you implemented rules based on related laws regarding
working conditions, workplace environment, and so on?
1%
16%

83%

■ We have formulated rules based on related
laws and implement them with regard to
employees■ We have not formulated rules based onrelated laws but ensure compliance withlaws regarding employees as needed■ We do not engage in any corporate
activities with a particular focus on these
related laws

Initiatives related to business continuity planning (BCP)in the supply chain
 Prompt sharing of information
As one of our BCP initiatives to deal with large scale disasters
that have occurred in recent years, after quickly sending out
emails to sites that are supplied products from disaster-stricken
areas, similar information is disseminated through the intranet to
inform the entire Group of the situation.
We aim to post this information by the following day fromwhen a disaster strikes and have developed a system toperiodically update information based on circumstances.
Previously, purchasing staff would confirm the status of the
procured items they were personally responsible for and inform
related sites of the situation individually, but by posting
information with a common and unified format to the intranet,each site is now able to quickly ascertain the situation.

Consideration for human rights, the labor environmentand safety & health in the supply chain
In our CSR procurement questionnaire, we have added questions
about SDG initiatives since FY2020. As a result, 58% of
respondents reported understanding or have some degree ofunderstanding about the SDGs, while 26% responded that they
promoted initiatives aimed at achieving the SDGs, reflecting thesteady penetration of the SDGs.
Do you promote initiatives aimed at achieving the SDGs?
24%

■ Yes

26%

■ We plan to promote initiatives in the future■ We plan to consider promoting initiatives in
the future■ We do not promote such initiatives and haveno plans to do so in the future

35%

15%

Example of Information Posted to the Intranet

Integrated Report 2021

42

Basic Information

Value Creation

Foundations of Value Creation

Local Communities The NLM Group respects local culture and customs andcontributes to the development of local communities in harmony
with them. In addition, through activities to protect biodiversity
we contribute to the conservation of local environments.
The NLM Group contributes to the development of nextgeneration human resources through education on
manufacturing and support for academic research.
 The NLM Group strives to enhance its support system so that
employees can voluntarily take part in activities that contributeto local communities.

Framework
The NLM Group has adopted the basic policy of allowing eachbusiness site to play a central role in voluntary community
engagement activities while engaging in moderate Group
coordination. We pursue solutions to issues such as
engagement with local communities and regional development
while taking on feedback from local residents. These issues arealso shared at Group General Affairs Liaison Meetings attended
by the general affairs personnel of Group companies andbusiness sites, to facilitate solutions to each local issue.

Plan
Medium-term Plan
(FY2019 to FY2021)
Continue communicatingwith local communities
to facilitate development.
Establish the corporate
brand locally byappropriately distributing
and giving back to the
local community.
Maintain and improve
regional biodiversity.
Play an active role inthe development of local
manufacturing-related
human resources.

Overall view of the Amehata Dam

Content of the administrative guidanceRegarding measures to respond to the regular inspection of
Amehata Dam
Notice No. 13 dated August 9, 2019 from the Director of Kofu
R i v e r a n d N a t i o n a l H i g h w a y O ff i c e , K a n t o R e g i o n a l
Development Bureau, MLIT
To: Director of Kambara Complex, Nippon Light Metal Co., Ltd.
Notice from the Director of Kofu River and National Highway
Office, Kanto Regional Development Bureau, MLIT
Findings of the regular inspection· M easures to address sedimentation have been taken, but themeasures shall be strengthened and improved to surely reduce theamount of sediment.
· A plan for measures to address the sedimentation problem shall befinalized and the measures shall be implemented in a well-planned
manner to fundamentally solve the sedimentation problem.
· While abnormalities such as deformation have not been observed, theamount of sediment has exceeded the sediment storage capacity.
Accordingly, its impact on the dam body, etc. shall be investigated.

FY2020 Action Plan
Ascertaining and promoting pro bono activities
Providing support for cultural and sports
programs as well as educational and research
institutions in each locality
Active engagement with local communities
Cooperation with external organizations suchas police and fire departments and information
gathering
Preparations for publishing social contribution
activity website posts
Support for BCP formulation

In response to the flooding damage that occurred and theabove administrative guidance from the government, in
September 2019 Nippon Light Metal Co., Ltd. established theAmehata Area Sediment Countermeasures Investigative
Commission (“the Commission,” hereafter) together with the
Ministry of Land, Infrastructure, Transport and Tourism (MLIT),
Yamanashi prefectural government, and the Hayakawa
municipal government, and after the Commission had met fourtimes up to March 2020, it considered emergency
countermeasures to deal with the flooding damage in thesurrounding region along with fundamental measures to address
the sedimentation, after which the Basic Plan for Measures
Addressing Amehata Dam Sediment (“the Basic Plan,” hereafter)
was compiled in April 2020 and submitted to the MLIT.

Outline of the Basic Plan for Measures Addressing Amehata Dam Sediment

Measures to address sedimentation in Amehata Dam
At the Amehata Dam (Hayakawa-cho, Minamikoma-gun, Yamanashi
Prefecture) which is maintained by Nippon Light Metal Co., Ltd., risingwater levels on the Amehata River upstream of the dam due totorrential rains caused by Typhoon Krosa in August 2019 and Typhoon
Hagibis in October 2019 caused flooding damage across thesurrounding region.
With regard to the Amehata Dam, in order to achieve a fundamental
solution following the notification of regular inspection results from the
Ministry of Land, Infrastructure, Transport and Tourism in 2019, we

43Integrated Report 2021

1. Positioning of the Basic Plan for Measures Addressing
Amehata Dam Sediment
Floods have already occurred above the Amehata Dam
reservoir. Therefore, under this plan, we will aim to implement asolution to prevent floods and mudslides as soon as possible
and ensure that the Amehata Dam reservoir can fulfill its
functions in the future.
Accordingly, in this Basic Plan, we divided countermeasures
into three stages: a short-term plan [Step 1], a medium-termplan [Step 2], and a long-term plan [Step 3].
This plan that we submitted was formulated with the greatest
possible consideration of the living environment of local

2. Outline of the Basic Plan for Measures Addressing Amehata
Dam Sediment(1) Short-term plan [Step 1]
Period: FY2020 to the end of FY2021
Goal: Implementing a solution to prevent floods and mudslides(removing accumulated sediment so that the water level
will not exceed the normal water level)
Removal and transportation of the accumulated sedimentthat is believed to cause floods and mudslides (estimatedamount: 3,000,000 m3)

Details : Emergency measures· Construction of a temporary embankment· Securing a river channel· Temporary use of the inside of the dam lake for theconstruction of embankments to protect theprefectural road, to construct a temporary road, andfor other purposes
Drastic measures· Increase the capacity of the belt conveyor todischarge sediment below the dam· Use the sediment (as an aggregate resource, forconstructing haul roads in rivers, for building
embankments for land development, and for otherpurposes)· Review the continuous countermeasures
addressing sedimentation
Follow-up, etc.
(2) Medium-term plan [Step 2]
Period: FY2022 to the end of FY2024
Goal: Remove 3,000,000 to 4,000,000 m3 of accumulated
sediment to secure sufficient sediment storage capacity
to prepare for the largest ever inflow of earth and sand.
Details: Use the sediment (as an aggregate resource, forbuilding embankments for land development, and forother purposes)
Review and implement the continuous
countermeasures addressing sedimentation
Follow-up, etc.
(3) Long-term plan [Step 3]
Period: From FYT2025 onwards
Goal: Maintain a safe level of sedimentation
Details: Use the sediment (as an aggregate resource, forbuilding embankments for land development, and forother purposes)
Implement continuous countermeasures addressing
sedimentation
Follow-up, etc.
* Chapter three is not listed in this report. For details, please refer to the Basic Plan for
Measures Addressing Amehata Dam Sediment (https://www.nikkeikin.co.jp/news/
news/common/pdf/p202005070202.pdf)

Roadmap Progress
Roadmap of the Basic Plan for Measures Addressing Amehata Dam Sediment
Detailed Item

Issue

Construction of atemporary embankment

Surveying and Design
Discussion and Coordination

Short Term
FY2020

FY2021

Construction Work

Medium Term
FY2022

FY2023

FY2024

OperationLong Term
FY2025 ~Construction complete
The river channel was secured by the time of the FY2020 flood season and is being maintained.
In the future we will continue to excavate the river channel in an effort to prevent disasters.

Securing a river channel
Temporary use inside thedam lake for construction ofembankments, etc.

Completed relocation of 600,000 m3 within the dam lake

Increased sedimenttransportation capacity

Soil utilization

The NLM Group works to contribute to local communities inaccordance with its Social Contribution Policy (established July22, 2016) described below, so that it can effectively utilize theresources of the Group to contribute to the development of local
communities through social contribution activities that are
unique to the Group.

received administrative guidance to compile plans for sedimentation
control measures and systematically address the sedimentation
issues.

Emergency measures Main
Item

Policyresidents. It has a realistic target for the amount of accumulated
sediment to be removed, before describing the feasible
countermeasures that we formulated. To begin theimplementation of the Basic Plan immediately, we attachedimportance to the short-term plan (a solution to prevent floods
and mudslides) to be implemented in FY2020 and FY2021.
Under the medium-term plan for FY2022 and onward, we
will take measures such as securing places to dispose ofremoved sediment by finding candidate locations where
embankments are needed so the removed sediment can beused as a material to build the embankments, while continuing
to cooperate with the Hayakawa and Minobu municipal
governments, the national government, and the Yamanashi
prefectural government. In addition, the Basic Plan will be
reviewed at the follow-up meeting* of the Investigative
Commission described in Chapter 3 in accordance with its
progress, to formulate and advance feasible measures tosecure sufficient sediment storage capacity to prepare for thelargest ever inflow of earth and sand.
Further, there are many issues to be studied surrounding
Amehata Dam, including the remarkably large amount of
sedimentation compared to other dams in Japan. Therefore,
we will continue to study countermeasures from a broad
perspective to ensure sedimentation stays at a safe level andtake measures to maintain sufficient sediment storage capacity(continuous countermeasures against sedimentation) byconsulting with other stakeholders at the follow-up meetings ofthe Investigative Commission. We have positioned this process
as a part of the long-term plan.

Drastic measures

Through proactive exchanges with local communities,
we will contribute to their development.

In FY2020 the system for removing 1.2 million m3 per year was ensured. From FY2021, asystem to remove 1.5 million m3 per year will be established.

Aggregate
Responding to further expansion of
Sluggish demand, sales expansion is being adjusted to recover
resources
demandAmehata River
Structure based on the use of regular vehicles
Construction underway
transportation route when prefectural roads are damaged
Hayakawa River
Detours near narrow sections andSchematic design complete, start of construction
transportation route river crossing structures
Examining
wide
area
needs
in
Securing a disposal
addition to local requirements
site
Partial finalization and start of construction
Securing temporary storage yards

Considering measures from a broad
Ongoing countermeasures perspective to continually maintain
Under continual consideration
addressing sedimentation safe sedimentation conditions
Amount of sediment removed
and transported

FY2020 Results: 1.65 million m3

1.5 million m3 1.5 million m3 1 million m3 ~ 1 million m3 ~ 1 million m3 ~ Measures based on
the amount of inflow

3 million m3

3 million m3 to 4 million m3<Press release regarding the third follow-up meeting of the Amehata Area Sediment Countermeasures Investigative Commission> https://nikkeikin.co.jp/news/news/common/pdf/p2021061001.pdf

Integrated Report 2021

44

Basic Information

Progress Report
Since 2020, Nippon Light Metal Co., Ltd. has been working
diligently to implement the Basic Plan and to date has madeprogress largely according to the plan. In addition, since 2020 up
to June 2021, the Amehata Area Sediment Countermeasures
Investigative Commission has had three follow-up meetings to
confirm the implementation status of the Basic Plan. The MLIT,
Yamanashi prefectural government, and the Hayakawa municipal
government have taken part in the meetings, which involve reportson the progress of countermeasures based on the Basic Plan, andthe handling of issues with feedback from all related parties.
Additionally, in implementing the countermeasures, since it
became possible to reasonably estimate the costs associatedwith implementing the countermeasures from FY2020 toFY2021, for the fiscal year ended March 2020 we recorded an
extraordinary loss of 11,000 million yen for sediment control
costs, and since it became possible to reasonably estimate theimplementation details up to FY2024, for the fiscal year ended
March 2021 we recorded an extraordinary loss of 16,200 million
yen for sediment control costs.
Nippon Light Metal Co., Ltd. will continue to steadily
implement the
Basic Plan
while
cooperatingwith everyone
involved andprioritizing thesafety of thearea going
forward.

Social Contribution Accounting
Since FY2012, the NLM Group has calculated and disclosed
costs associated with its social contribution activities as social
contribution accounting. Through the network maintained by theGroup General Affairs Liaison Meetings, where the general affairs
personnel of NLM Group companies gather, and reports handled
by the Group Executive Committee, Board of Directors of NLM
Holdings and the CSR Committee, we have fostered a corporate
culture of community-based social contribution that reflects theunique qualities of the NLM Group.
Currently the number of activity programs and their costs haveincreased significantly since the initial plans, and a wide range ofprograms have emerged. Among these programs, communitybased activity programs made up 60 percent of the total, or 218
of all 361 programs (FY2020 results), making them representative
activities for the Group.
Social Contribution Accounting (million yen)
■ 日本軽金属

168

163
121

133

117

113

We have taken part in the Tomakomai Port
Festival held in Tomakomai, Hokkaido, since
2013.

Tomakomai Port Festival (Nippon Light Metal Co., Ltd.,
Nikkei Hokkaido Co., Ltd.)

Distinctive events at NLM Group business sites
We hold distinctive events at each business site and invite local residents to attend, in order to give them the opportunity to learn more
about the NLM Group.
We promote engagement with local residents
through employee-run bazaars, lucky draws forprizes, forklift experiences (see photo on right)
and so on.

Nikkei Bazaar (Nippon Light Metal Co., Ltd.
Nagoya Plant)

An event to view 1,000 roses of 400 different
varieties was an opportunity to express our
gratitude to the local community.

72

2013

Foundations of Value Creation

180

95

2012
Embankment upstream of the Amehata Dam (taken in August 2021)■ 日本軽金属以外

Value Creation

2014

2015

2016

2017

2018

2019

2020 (Fiscal year)*Figures for FY2019 were adjusted.

Rose Viewing Event (Nippon Fruehauf Co., Ltd.
Atsugi Head Office Plant)

Engaging with local communities and disseminating information through events
The NLM Group is particularly focused on taking part in local events and organizing events at its business sites among the local activity
programs it runs. Events provide great opportunities to gain a deeper understand of local culture and customs, and for local residents tolearn more about the NLM Group. We will continue to make the most of these opportunities and work on engagement and information
dissemination that leads to the development of local communities.
Unfortunately, in FY2020 most local events were canceled or postponed due to the COVID-19 pandemic.
Around 250 participants dance at the Niigata
Dai-Minyo-nagashi Festival together withtraditional lanterns decorated with aluminum
barrels manufactured by Nikkei Niigata Co., Ltd.

Niigata Dai-Minyo-Nagashi Festival(Nikkei Niigata Co., Ltd.)

Each year we take part in the Prince Chichibu
Memorial Mount Fuji Ekiden Race, held in
Gotemba, Shizuoka Prefecture and regarded
as the most grueling race of its kind in Japan.

Prince Chichibu Memorial Mount Fuji Ekiden Race
(Nippon Light Metal Co., Ltd., Toyo Aluminium K.K.
and others)

List of Events
Event Name

Integrated Report 2021

RegionNippon Light Metal Co., Ltd. Tomakomai Complex, Nikkei Hokkaido Co., Ltd. Tomakomai-shi, Hokkaido

Tomakomai Cosplay Festa

Nippon Light Metal Co., Ltd. Tomakomai Complex, Nikkei Hokkaido Co., Ltd. Tomakomai-shi, Hokkaido

Minami Alps Hayakawa Wild Vegetable
Festival

Nippon Light Metal Co., Ltd. Kambara Complex

Hayakawa-cho,
Minamikoma-gun,
Yamanashi Prefecture

Nanbu-cho Ekiden / Marathon Race

Nippon Light Metal Co., Ltd. Kambara Complex

Nanbu-cho, Minamikomagun, Yamanashi Prefecture

Nippon Light Metal Co., Ltd. Kambara Complex

Shizuoka-shi, Shizuoka
Prefecture

Prince Chichibu Memorial Mount Fuji
Ekiden Race

Nippon Light Metal Co., Ltd. Kambara Complex, Toyo Aluminium K.K.

Gotemba-shi, Shizuoka
Prefecture

Niigata Festival

Nikkei Niigata Co., Ltd., Nikkei New Business Co., Ltd. Niigata Branch, Toyo Niigata-shi, Niigata
Rikagaku Kenkyusho
Prefecture

Konomiya Hadaka Festival

Nippon Light Metal Co., Ltd. Nagoya Plant

Inazawa-shi, Aichi Prefecture

Ujisato Festival

Toyo Aluminium K.K. Hino Complex

Hino-cho, Gamo-gun, Shiga
Prefecture

Rose Viewing Event

Nippon Fruehauf Co., Ltd. Atsugi Head Office Plant

Atsugi-shi, Kanagawa
Prefecture

Nippon Light Metal Co., Ltd. Kambara Complex

Shizuoka-shi, Shizuoka
Prefecture

Riken Light Metal Industry Co., Ltd.

Shizuoka-shi, Shizuoka
Prefecture

Nippon Light Metal Co., Ltd. Nagoya Plant

Inazawa-shi, Aichi Prefecture

Participation in
Kanbara Festival
Local Events

Events Held by Nikkei Festival
Business Sites
Riken Summer Evening Festival
Nikkei Bazaar

45

Main Company / Business Site

Tomakomai Port Festival

Integrated Report 2021

46

Basic Information

Value Creation

Foundations of Value Creation

Information Security

Guidebook for information management administrative offices to develop andoperate management systems

Group Information System Management
Regulations

Group regulations for building and operating information systems, and ensuring
their reliability, safety and efficiency

Group Information System Standards

Group standards setting forth necessary matters concerning the development,
maintenance and operation, etc. of information systems

Group Information System Procedures

Procedures concerning information security, systems infrastructure, the purchaseof information equipment and software, system development and operation, IT
auditing, and so on

Group Information System Management
Regulations Guidelines

Explanation of rules that need to be observed when information users such as
employees use information systems and infrastructure

Systems

Human
Resources

GeneralAffairs

ComplianceGroup Companies
Subsidiaries

Subsidiaries

Subsidiaries

Subsidiaries

Subsidiaries

Subsidiaries

Subsidiaries

Subsidiaries

LegendInformation Management
Officers (Presidents)

In terms of ongoing initiatives, we conduct various training andeducational programs using e-learning and remote training withthe aim of improving the IT literacy of the NLM Group as a whole.
In addition, we repeatedly run simulation drills based on a rangeof scenarios to instill the right ways for employees to respond totargeted email attacks. When these drills result in poor
performance, we prescribe courses to be taken in order to levelup our performance overall. In FY2020, a total of 11,400
employees took part in targeted attack email drills.

Measures to Strengthen Security
1. Prevention

2. Detection

3. Response

Formulation of rules

Risk Management Meetings
Intellectual
Internal Control
Legal Affairs
PropertyIn FY2020, with business continuity during the COVID-19
pandemic becoming an urgent issue, we worked to strengthen
information security while maintaining network infrastructure andupgrading remote work capabilities.
We have been strengthening information security at each step prevention, detection and incident response. Previously, measures
were focused on the prevention to detection stages, but now weare working to strengthen those areas while enhancing monitoringand detection functions and focusing on strengthening the ability
to response swiftly and appropriately when an incident occurs.
Measures from the detection to response stages are based on
the so-called zero-trust security assumption, which are initiatives
to ensure the integrity and safety of key information assets andaccess to systems on the assumption that no users, devices orconnection sources can be trusted. In addition, we also address
measures to protect important information assets from threats
due to natural disasters such as earthquakes and flooding, andconduct disaster recovery training (DRT) to prepare for actuallyexperiencing a disaster.
To strengthen the ability to respond when an incident occurs,
we launched a Computer Security Incident Response Team(CSIRT) as a dedicated group handling information security issues
within the Group, and developed a framework for coordination
between the Group’s risk management departments and outsideorganizations in the event of an emergency. We formulate
emergency response plans and conduct table-top exercises
based on those plans.

Diagnosis, visualization and analysis

Chief Information Manager(President and CEO)

Subsidiaries

Group Information Management Guidebook

Education and training

Board of Directors
Group Executive Committee

Subsidiaries

Group regulations expressing important management standards concerning
information management in detail

FY2020 Initiatives

Information Management Structure

Nippon Light Metal HoldingsGroup Information Management Standards

Incident response

Comprehensive management of information security risks is
implemented on a joint basis by the Internal Control Department
and Systems Department.
The Internal Control Department is responsible for non-physicalaspects such as the development of information management

Group regulations setting forth basic matters concerning Group information
management

Monitoring system

Framework

Group Information Management
Regulations

Contents

Log management

rules and systems, and also coordinates with various risk
management departments including Legal Affairs, Intellectual
Property, General Affairs and Human Resources.
The Systems Department handles hardware aspects such as
the maintenance and upkeep of information and communication
system equipment. To discuss and solve compound issues suchas the security, maintenance and utilization of information, Risk
Management Meetings (RMM) involving the Internal Control,
Systems, Legal Affairs, Intellectual Property, General Affairs,
Human Resources and Compliance departments are held inalternate months.
Matters decided on in RMMs are translated into action by the
Information Management Officers and Information Systems
Personnel appointed by each Group company and department.
To monitor the status of implementation for all Group companies
and departments, once a year the Internal Control Department
performs an inspection of information management systems andtheir operational status, and the Systems Department carries out
IT diagnosis. Information security-related issues, inspection
results and other information is reported to the NLM HoldingsGroup Executive Committee and Board of Directors on a periodic
basis and when otherwise needed.

The NLM Group has identified information security as one of its
priority risks. Matters related to the handling of information
including information security are set forth in the Group
Information Management Regulations, and we implement
initiatives that help improve corporate value in an ongoing fashion
through the protection and utilization of information as animportant management resource. This policy along with plans
and initiatives based on the policy are deliberated on and decided
by the Group Executive Committee and reported to the NLM
Holdings Board of Directors. The Board of Directors offers
opinions on reports and provides instruction as necessary.

Names of Regulations and Other Rules

Information protection

PolicyStructure of Group Information Management Regulations

Anti-virus measures

We are working to appropriately manage corporate
information and strengthen information security.

Systems Personnel

47

Integrated Report 2021

Integrated Report 2021

48

Basic Information

Value Creation

Foundations of Value Creation

Data
Boundary

2016

2017

2018

2019

2020

Unit

Number of employees *1

Full-time directors

Managerial staff

GeneralConsolidated (Japan)

—

401

490

490

427

person(s)

—

3.5

5.6

5.4

4.6

%
%

Male

187

190

208

216

209

person(s)Consolidated

Female

0

0

0

1

1

person(s)Three-year retention rate *3

Consolidated (Japan)

—

88.4

83.8

89.1

87.8

Consolidated

Total

187

190

208

217

210

person(s)Number of those who werere-employed after retirement

Non-consolidated(Nippon Light Metal Co., Ltd.)

26

8

8

12

1

person(s)Consolidated

Male

1,529

1,540

1,640

1,666

1,712

person(s)Labor Union participation rate

Consolidated

Female

73

90

95

96

100

person(s)Non-consolidated(Nippon Light Metal Co., Ltd.)

100

100

100

100

100

%

Consolidated

Total

1,602

1,630

1,735

1,762

1,812

person(s)Average age

Consolidated

Male

—

39.1

39.9

39.4

40.7

years old

Consolidated

Male

9,091

8,992

9,087

9,345

9,040

person(s)Consolidated

Female

—

36.9

37.4

37.0

38.4

years old

Consolidated

Female

2,433

2,233

2,494

2,504

2,310

person(s)Consolidated

Total

—

38.6

39.4

39.0

40.3

years old

Consolidated

Male

—

11.5

11.8

11.8

12.7

years

Consolidated

Female

—

7.7

8.0

7.6

8.6

years

Consolidated

Total

—

10.8

11.1

11.0

12.0

years

Consolidated (Japan) Male

—

2,146

2,157

2,076

2,085

Hours/person

Consolidated (Japan) Female

—

1,974

1,871

1,867

1,919

Hours/person

Consolidated (Japan) Total

—

2,124

2,120

2,047

2,062

Hours/person

Consolidated (Japan) Male

—

324

302

284

255

Hours/person

Consolidated (Japan) Female

—

161

150

148

130

Hours/person

Consolidated (Japan) Total

—

302

282

266

238

Hours/person

Consolidated

Male

—

9.9

9.9

11.0

10.8

days

Consolidated

Female

—

9.7

9.6

9.6

9.9

days

Consolidated

Total

—

9.9

9.8

10.7

10.6

days

Consolidated

Male

—

52.5

57.8

63.9

56.4

%

Total

11,524

11,225

11,581

11,84911,350person(s)Average duration of service

12,855

13,316

13,611

13,162

person(s)JapanConsolidated

Male

7,879

8,058

8,399

8,568

8,668

person(s)Consolidated

Female

1,135

1,198

1,271

1,323

1,384

person(s)Consolidated

Total

9,014

9,256

9,670

9,891

10,052

person(s)Consolidated

Male

2,506

2,243

2,282

2,221

1,858

person(s)Consolidated

Female

1,331

1,089

1,095

1,239

985

person(s)Consolidated

Total

3,837

3,332

3,377

3,460

2,843

person(s)Consolidated

Male

235

231

229

222

226

person(s)Consolidated

Female

40

36

40

38

41

person(s)Consolidated

Total

275

267

269

260

267

person(s)Consolidated

Male

—

—

0

0

0

person(s)Consolidated

Female

—

—

0

0

0

person(s)Consolidated

Total

—

—

0

0

0

person(s)Consolidated

Female

—

71.6

73.4

74.3

64.3

%

Consolidated

Male

—

—

108

108

89

person(s)Consolidated

Total

—

55.3

60.0

65.4

57.6

%

Consolidated

Female

—

—

15

21

20

person(s)Consolidated (Japan) Male

—

1

6

12

12

person(s)Consolidated

Total

—

—

123

129

109

person(s)Consolidated

Male

—

—

2,153

2,124

1,925

person(s)Consolidated (Japan) Female

—

55

66

52

42

person(s)Consolidated

Female

—

—

559

600

444

Consolidated (Japan) Total

—

56

72

64

54

person(s)person(s)Consolidated

Total

—

—

2,712

2,724

2,369

person(s)Consolidated (Japan) Male

—

2

4

0

2

person(s)Consolidated

Male

—

—

3,150

3,164

3,038

person(s)Consolidated (Japan) Female

—

1

2

2

2

person(s)Consolidated (Japan) Total

—

3

6

2

4

person(s)Consolidated (Japan) Male

—

0

1

3

5

person(s)Consolidated (Japan) Female

—

61

66

85

96

person(s)Consolidated (Japan) Total

—

61

67

88

101

person(s)Consolidated (Japan) Male

—

34

59

51

45

person(s)Consolidated (Japan) Female

—

2

9

8

5

person(s)Consolidated (Japan) Total

—

36

68

59

50

person(s)Under 1530 to 39

40 to 49

50 to 59

Consolidated

Female

—

—

833

894

826

person(s)Consolidated

Total

—

—

3,983

4,058

3,864

person(s)Consolidated

Male

—

—

2,878

2,919

2,798

person(s)Consolidated

Female

—

—

671

741

738

person(s)Consolidated

Total

—

—

3,549

3,660

3,536

person(s)Consolidated

Male

—

—

1,975

2,010

2,252

person(s)Consolidated

Female

—

—

276

284

319

person(s)Consolidated

Total

—

—

2,251

2,294

2,571

person(s)Consolidated

Male

—

—

646

686

650

person(s)Consolidated

Female

—

—

52

60

63

person(s)Consolidated

Total

—

—

698

746

713

person(s)Consolidated (Japan)

—

596

692

617

486

person(s)Percentage to employees Consolidated (Japan)

—

7.1

7.8

6.8

5.3

%

Consolidated (Japan)

—

197

211

210

196

person(s)60 or older

Integrated Report 2021

Unit

13,12620 to 29

49

2020

Total

15 to 19 years old

Number of new graduates
who were recruited

2019

Consolidated

U.S. and Europe

Number of new hires

2018

Total employees

Asia

Number of employees
in each age group *2

2017

Consolidated

Consolidated

Number of employees
by country/region

2016

Percentage to employees Consolidated (Japan)

Number of employees who left Total

Employees, etc.
Number of directors

Boundary

Total

Average annual hours worked

Average annual overtime work hours

Average number of days ofannual paid leave taken

Average rate of acquisition ofannual paid leave

Number of employees who
newly took childcare leave

Number of employees who
newly took nursing care leave

Number of users of the shorter
working hour program

Number of employees who were absent
from work due to mental health problems

Average annual amount ofexpenditure for education/training

Consolidated

Employment rate of people withdisabilities *4

—

29.2

24.9

25.0

16.2

thousand yen/personNon-consolidated(Nippon Light Metal Co., Ltd.)

2.47

2.59

2.63

2.57

2.60

%

Non-consolidated(Toyo Aluminium K.K.)

2.05

2.03

1.93

2.55

2.63

%

*1. Fixed-term (full-time) employees are included.
*2. Consolidated figures have been reported since FY2018.
*3. Percentage of employees who are still at the company as of April 1 in the year that is three years after they joined the company.
*4. As of June 1 immediately after the end of each fiscal year. The statutory employment rate is 2.2%.

Integrated Report 2021

50

Basic Information

Boundary

2016

2017

2018

2019

2020

Unit

Boundary

Greenhouse gas emissions (Scope 1, Scope 2)

Greenhouse gas emissions perunit of sales *1
Breakdown of Scope 3
emissions *4

Category 2
Capital goods00case(s)thousand tons-CO2

Number of accidents related
to the environment *12

Consolidated

3

0

0

3

3

case(s)1.57

tons-CO2/million yen

Number of complaints related
to the environment *13

Consolidated

4

10

16

10

6

case(s)1,644

thousand tons-CO2

SafetyConsolidated (Japan)

9

12

23

19

12

case(s)Consolidated (overseas)

8

9

16

16

7

case(s)Consolidated (Japan)

43

65

64

53

58

case(s)Consolidated (overseas)

9

5

5

7

3

case(s)Consolidated

0.41

0.56

1.05

0.91

0.58

Non-consolidated(Nippon Light Metal Co., Ltd.)

0.00

0.27

0.54

0.27

0.52

548

thousand tons-CO2

Consolidated (overseas) *3

135

125

137

125

123

Consolidated (Japan)

2.19

2.09

1.87

1.60

1,962

1,926

1,947

1,690

Number of workplace injuries *14

35

42

39

Lost-time injuries

thousand tons-CO2

Non-lost-time injuries

Category 3
Fuel and energy not
Consolidated
included in Scope 1 or
2

33

Category 4
Upstreamtransportation anddistribution *6

Consolidated

0

0

0

0

0

thousand tons-CO2

Category 5
Waste generated inoperation

Consolidated

4

4

5

4

3

thousand tons-CO2

Category 6
Business travel

Consolidated

0

0

0

0

0

thousand tons-CO2

Category 7
Employee commuting

Consolidated

3

3

3

4

4

thousand tons-CO2

Electricity

Consolidated

10.6

10.8

10.4

8.1

7.8

Fuels

Consolidated

6.3

6.3

6.2

6.0

Energy consumption intensity
per unit of sales

Consolidated

37.7

35.5

33.2

Weight of raw materials used in
production

Consolidated

618

576

SOx emissions

Consolidated

341

NOx emissions

Consolidated

Quantity of water intake *

28

34

34

31

thousand tons-CO2

Frequency rate of lost-time
injuries *14*15

Compliance
Number of cases that were reported to NIKKEI HOTLINE

Consolidated

14

15

28

29

16

case(s)Number of times themeeting was held

Consolidated

2,230

2,102

2,066

2,156

2,517

times

Number of participants Consolidated

19,991

20,237

20,972

21,40423,059

total number

Number of patent publications *14*16

Consolidated

126

182

167

160

140

case(s)

PJ

Number of patent registrations *14*16

Consolidated

143

107

92

81

131

case(s)

5.5

PJ

Quality assurance

30.3

30.7

GJ/million yen

Number of violations of laws or regulationsin the provision of products/services

Consolidated

0

0

0

0

0

case(s)Number of prompt reports

Consolidated

10

6

8

7

9

case(s)

601

523

426

thousand tons

Number of recalls

Consolidated

4

2

4

3

5

case(s)

473

379

365

330

tons

Community

576

520

560

449

380

tons

Expenditure related to social
contribution

Consolidated

163

133

168

180 *17113

million yen

Consolidated

23.7

23.5

23.9

22.6

21.7

million m

Quantity of water discharge *8

Consolidated

30.8

21.5

22.5

21.3

20.7

million m3

Consolidated

8

8

9

9

Water consumption

Consolidated

—

—

—

1.3

1.0

million m

Consolidated

119

97

105

106

90

tons

Recycled/Reduced

Consolidated

40.9

37.3

48.4

42.2

33.6

thousand tons

Disposed (landfill)

Consolidated

3.9

3.5

3.5

3.4

3.5

thousand tons

Environmental
conservation expenditure: Consolidated (Japan)
Investment

2,009

1,983

2,218

1,580

995

million yen

Environmental
conservation expenditure: Consolidated (Japan)
Expenditure

5,847

5,598

6,210

6,248

5,746

million yen

Consolidated (Japan)

397

486

554

370

334

million yen

Economic effect ofenvironmental conservation
Consolidated (Japan)
activities:
Changes in expenditure *10 *112,770-1,440

-982

1,027

2,098

million yen

Energy consumption

7*9

COD emissions
Emissions and disposal ofwaste and waste byproducts

Environmental accounting

Economic effect ofenvironmental
conservation activities:
Earnings

51

606

22

Unit

0

748

21

2020

0

804

Consolidated

2019

0

796

Category 1
Purchased goods and Consolidated
services *5

2018

Consolidated*2

Consolidated (Japan)

2017

Foundations of Value Creation

Number of cases of lawsuits,penalties, or forfeitures related
to the environment

The environment
*1

2016

Value Creation

Integrated Report 2021

Compliance meeting

3

3

GovernanceInterim and year-end dividend
per share

65 *18yen

We have received independent assurance by KPMG AZSA Sustainability Co., Ltd. regarding the reliability of the data.
*1. In FY2018, we began to compile statistics on greenhouse gas emissions from our main offices.
*2. The following CO2 emission factors were used for the calculations.
	Electricity in Japan: The CO2 emission factor with T&D losses of each previous fiscal year announced by the Electric Power Council for a Low Carbon Society
Fuel: The CO2 emission factor for each fuel is set by a ministerial ordinance from the Ministry of the Environment*3.	The following CO2 emission factors were used for the calculations.
Electricity overseas: CO2 emission factors of the respective countries shown in CO2FCOMB 2017 from the IEA
Fuel overseas: Same as fuel in Japan in *2*4.	Calculated based on the Basic Guidelines on Accounting for Greenhouse Gas Emissions Throughout the Supply Chain issued by the Ministry of the Environment and the Ministry of
Economy, Trade and Industry For FY2020, we use the emission unit values specified in the Database of Emissions Unit Values for Calculation of Greenhouse Gas Emissions, etc. by
Organizations Throughout the Supply Chain (Ver. 3.1) issued by the Ministry of the Environment.
*5.	The Scope 3 Category 1 emissions are calculated based on the volume of purchase of the top three items in terms of volume purchased from outside of the Group.
Of the items, the aluminum ingots are those purchased by Nippon Light Metal Co., Ltd. Purchasing Department.
*6. The standard for calculating Scope 3 Category 4 emissions was revised, and the values for FY2017 and FY2018 were corrected accordingly.
*7. The seawater intake quantity is not included.
*8. The standard for calculating the amount of discharged water was revised, and the values for FY2017 and FY2018 were corrected accordingly.
*9. Began to be calculated in FY2019.
*10.	Changes in expenditure are calculated using the following formula: Changes in expenditure = expenditure incurred during a base period (FY2019) – expenditure incurred during thecurrent year (FY2020)*11. - (minus) indicates an increase in expenditure.
*12. Environmental problems that affect external parties (such as the leakage of oil or chemicals)*13. Number of petitions from external parties (such as those regarding smell and noise)*14. The subject period is the calendar year (January to December).
*15. Injuries that resulted in one or more days’ absence from work (excluding commuting injuries)*16. Companies subject to calculation were added from FY2020.
*17. Figures for FY2019 were adjusted.
*18. On October 1, 2020, the company conducted a one-for-ten reverse stock split.

Integrated Report 2021

52

Basic Information

Independent Assurance Report

Wheelchair rugby experience

Starting April 1, 2020, the NLM Group signed an official
sponsorship agreement with the Japan Wheelchair Rugby
Federation. In connection with this, a new Social Contribution
Project was launched with the aim of promoting understanding ofdiversity among employees and forming stronger bonds between
Group employees. Implementation team members for the project
were recruited from among junior employees, and candidates
were gathered from among five Group companies.
Although there were restrictions on the activities of the teamfrom when it was first formed due to the COVID-19 pandemic,
the team members started by learning and gaining an
understanding of the history and significance of sports for people
with disabilities. Next, the team gradually learned about theappeal of these sports through various activities, such as
experiencing wheelchair rugby together with children who havephysical disabilities. Although nearly all official competitions inJapan were canceled in the interest of preventing the spread of
COVID-19 infections, the Japan Wheelchair Rugby Federation
gave the team one of the few opportunities to cover an event,enabling them to feel the power of a live game for the first time.
The team members took this knowledge about the appeal andrules of wheelchair rugby and used the company newsletter, head
office signage and other media to engage in full-scale awarenessraising activities. Although the work attendance rate was low due
to employees being encouraged to work from home, as a resultof the team persisting with PR efforts while taking proper infection
control measures, employees started to talk more and more
about wheelchair rugby, and now the team fields a variety ofquestions about the sport, such as “are the wheelchairs used incompetition heavy?” and “I’d love to get my children toexperience it.”Aside from those dissemination activities aimed at employees,
the NLM Group is also trying to support the players in its own
unique way - by developing and providing aluminum components
for competition grade wheelchairs.
One of the highlights of wheelchair rugby is the heavy contact
between wheelchairs during strong tackles. These impacts are infact so strong they can be felt all the way to the spectator seating,
and wheel components (wheel rings) can become deformed.
When this happens a wheelchair becomes difficult to propel andoperate, and tire changes during a match are also common.
Given these factors, NLM Group subsidiary Nikkei Metal Co., Ltd.

Integrated Report 2021

Foundations of Value Creation

Initiatives to Support People with Disabilities

Social contribution project members

53

Value Creation

PR activities for wheelchair rugby at the head office cafeteria

devised a high-strength aluminum wheel ring that does not breakeasily. This new wheel ring has been used in actual matches. The
wheel ring development team looked on with bated breath aswheelchairs violently crashed into one another again and again
during a match.

Wheelchair for competition use(wheelchair rugby)

Pipe cross section of a wheel ring

In another initiative, facilities at a newly renovated gymnasium(Nikkei Arena) at the Nippon Light Metal Co., Ltd. TomakomaiComplex have been made barrier-free, so that the arena can be
widely used by parasport groups and players. Automatic doors
have been installed in the entrance hall so that users can enter
while remaining in wheelchairs, wide access paths and slopes
have been constructed, and wheelchair-accessible washbasins
have also been set up. Protective mats have also been installedaround the walls of the competition area to prevent collisions. The
facility is currently being used on a weekly basis by local
parasport teams.
Going forward, the NLM Group will continue to promote
diversity through the various support it provides to sports forpeople with disabilities, and will foster pride and teamwork among
employees working in the NLM Group by learning about diversity.

Nikkei Arena

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54

Basic Information

Value Creation

Foundations of Value Creation

Governance
Governance Structure
General Meeting of Shareholders
Appointment/Removal Progress of Enhanced Corporate Governance
NLM HD considers corporate governance to be one of its mostimportant management challenges, and strives to enhance themanagement supervisory functions of the Board of Directors andshare interests between management and shareholders throughthe measures outlined in the following table.

55

Integrated Report 2021

June 2016
June 2018

Separation of management and execution
Increase in the number of Outside Directors

Increase in the number of Outside Directors(from 3 to 4, to 31% of all Directors)

Establishment of the Nomination and Compensation

February 2020

Committee(an advisory body to the Board of Directors on
nomination and compensation, with a chairperson andmajority of members as independent Outside Directors)
Increase in the number of Outside Directors

June 2020

June 2021(from 4 to 5, to 36% of all Directors)
Appointment of 1 female Director(Outside Director)
Appointment of 1 non-Japanese Auditor(Outside Auditor)Introduction of stock remuneration (restricted
stock compensation system ) for Directors(excluding Outside Directors) and OfficersC larification that the position of Officers issimilar to that of Directors (delegatedrelationship with the company)

Forthcoming Initiatives
In June 2021, we established a special investigation committee
comprised mainly of outside attorneys to address the spate ofquality scandals involving multiple NLM Group operatingcompanies in 2021. The committee will clarify the entire situationand investigate the cause while also making recommendations toprevent repeat occurrences.
The NLM Group will take on the recommendations from thespecial investigation committee and strive to further enhance
corporate governance so that such incidents never happen again.
We will also revise our governance system with consideration
given to the intent of the revised Corporate Governance Codethat was published in June 2021.

 Overview of the Current Corporate Governance System
NLM HD is a company with Board of Auditors, ensuring thesupervisory function by Outside Directors and Outside Auditorsfrom their respective perspectives.
In addition, by separating the supervisory functions ofmanagement from business execution functions while actively
appointing Outside Directors and Outside Auditors, NLM HD has
ensured the supervision of executive functions and reciprocal
monitoring of Directors, and the soundness in management
through audits by Auditors including Outside Auditors.

President and CEOGroup Executive Committee

Officers

Compliance Committee
CSR Committee
Quality Committee
Environment Committee

Nippon Light Metal Business Groups, Toyo
Aluminium Business Groups and Departments

Board ofAuditors

Appointment/Removal

AdviceConsulting(from 2 to 3, to 23% of all Directors)

Audit Reports

AdviceNomination andCompensation Committee

Reports andproposals

October 2012
(Company established)

Appointment/Removal

The NLM Group has introduced a pure holding company system,
and under Nippon Light Metal Holdings Co., Ltd. (“NLM HD”) as
the holding company, business activities are pursued primarily
through two core operating companies, namely Nippon Light
Metal Co., Ltd. and Toyo Aluminium K.K. NLM HD aims to boost
corporate value by working to achieve sustainable growth andenhance competitiveness through the formulation anddetermination of Group-wide strategy, strategic allocation ofmanagement resources and the supervision of operating company
management.
NLM HD has adopted the executive officer (executive officer as“Officer”) system and the Board of Directors comprises 14
Directors (including 5 Independent Outside Directors), enablingflexible operation and substantive discussions by the Board of
Directors. In addition, to clarify the missions and responsibilities of
Directors and Officers, they serve terms of 1 year.
NLM HD has also adopted a corporate auditor and Board ofAuditors system. There are currently 6 Auditors (including 3
Independent Outside Auditors). The auditors constitute the Board
of Auditors. As an independent body that plays a part in corporate
governance, the Board of Auditors attend important internal
meetings such as Board of Directors meetings, monitoring theexecution of duties by directors in accordance with audit policies
and audit plans that comply with the standards for audits by
Auditors.
NLM HD considers enhanced corporate governance to be an
important management issue from the standpoint of supervisingGroup management, and has established the following basic
policy to address this.
(1) NLM HD shall respect the rights of shareholders and ensure
their substantial equality.
(2) NLM HD shall endeavor to appropriately cooperate withshareholders and many other stakeholders. The Board of
Directors and top management shall exercise leadership tofoster a corporate culture that respects the rights andstandpoints of stakeholders, as well as corporate ethics.
(3) NLM HD shall make information disclosures as required bylaws and regulations, and actively strive to disclose informationneeded by stakeholders to fulfill its accountability obligations
and ensure transparency.
(4) The Board of Directors, Auditors and Board of Auditors shallrecognize their fiduciary responsibility to shareholders, andfulfill their respective roles and responsibilities appropriately torealize sustainable growth and enhance corporate value in the
Mid-to-long-term.
(5) NLM HD shall have constructive dialogue with shareholders
and investors through various IR activities to facilitatesustainable growth and improved corporate value in the
Mid-to-long-term.

Consulting

Appointment/Removal

Directors
Outside Directors

Board of Directors

Accounting
Audit Basic Policy on Corporate GovernanceAccounting Auditor

Audit Reports

Auditors
Outside Auditors

Appointment/Removal

Statutory
Auditor Audits

We will work to further strengthen governance.

Internal audit

Opinion Exchange

Opinion Exchange

Central CSR and Audit Office
Audit Reports/Opinion Exchange

Board of Directors
So that the Company can make appropriate and flexible decisions
and supervise the execution of those decisions, the basic policy isthat the Board of Directors as a whole should comprise Directors
who originate within the Company and have the requisite skills andknowledge for management, and Outside Directors who are able
to actively share their views and raise issues regarding growthstrategy and the enhancement of governance from the standpointsof a diverse range of stakeholders and society. Additionally, toensure flexibility the Board of Directors comprises no more than 15
members, and an executive officer system is employed.
The Company has 14 Directors, 5 of whom are Independent
Outside Directors.
The Board of Directors meets once a month in principle, where
it makes decisions on the basic and important management
matters of the NLM Group, and supervises the status of Directors
in the execution of their duties.
The administrative office of the Board of Directors provides
explanations of particularly important agenda items in advance tofacilitate lively discussions during Board of Directors meetings, while
in FY2020 there were no such matters requiring prior explanation.

Internal Directors
9Composition ofBoard ofDirectors

Outside Directors
5
Number of female
Directors included: 1

36%

64%

66 - 701
2
7

61 - 65
60 or younger

Chairperson:	Masato Ono (Independent Outside Director)
Member:Ryoichi Hayashi (Independent Outside Director)
Member:	Toshihito Hayano Independent Outside Director)
Member:	Keiko Tsuchiya (Independent Outside Director)
Member:Tatsuya Tanaka (Independent Outside Director)
Member:	Ichiro Okamoto (President and Chief Executive Officer)

Internal Directors
President andChief Executive
Officer: 1

17%
Composition ofNomination andCompensation
Committee

Outside Directors
5
Number of
female Directors
included: 1

83%

Distribution of Directors’ Ages
71 or older

The Committee is comprised by at least three members
including the President, with a majority of whom are Independent
Outside Directors. In addition, the chairperson of the Committee
shall be appointed from its members whom is Independent
Outside Directors by the Board of Directors.
The Committee discusses and reports on matters determining
nomination and compensation in response to a request for
consultation from the Board of Directors and President. In
considering particularly important matters such as appointment ofofficers and their compensation, NLM HD seeks appropriate
involvement and advice from the Committee, whose main
members are Independent Outside Directors, in an effort toensure the independence and objectivity of director functions andstrengthen their accountability.
As of June 2021, the Committee is comprised by the following
chairperson and members.

4*As of date of the 9th annual general meeting of shareholders (June 25, 2021)

Nomination and Compensation Committee
In February 2020, NLM HD established the Nomination andCompensation Committee as an advisory body to Board of
Directors and President concerning the nomination andcompensation of President and Directors.

The main matters referred to the Committee for consultation are
as follows.
Regarding Nomination
Matters concerning nomination policy, such as the responsibilities andqualities required of President and Directors
Matters concerning successor training plans for the President andChief Executive Officer
Matters concerning the independence of Outside Officers
Regarding Compensation
Matters concerning policy for determining the compensation of
President, Directors and Officers, and the levels and composition ofcompensation
The Committee met 5 times in FY2020, during which it mainly
discussed the revision of the compensation system for Directors
and Officers including the introduction of stock remuneration, andmade a report on revisions such remuneration to the Board of
Directors.

Integrated Report 2021

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Basic Information

Board of Auditors
3 of the 6 Auditors of the Company are Outside Auditors.
The Board of Auditors meets at least 6 times annually inprinciple, and conducts auditing activities that maintainindependence from management by securing the participation of
Outside Auditors with a wealth of experience and insight invarious fields. In addition, the Auditing Office that supports
auditing operations of Auditors is assigned dedicated employees
not subject to the direction or orders of Directors.
Auditors audit the status of internal control including
compliance, risk management and the timely disclosure of
information from the perspective of enhancing the effectivenessof corporate governance.

Internal Auditors
3

50%

Composition%of Auditors 50

Outside Auditors
3
1of whom is
non-Japanese

Accounting auditing is handled by Ernst & Young ShinNihon LLC.
The Board of Auditors formulates standards governing theappointment, dismissal and reappointment of the accounting
auditor, considers the quality control, independence, expertiseand size of the accounting auditor, and evaluates the accounting
auditor yearly.

Internal Audit
Internal audits are performed by the internal auditing department
based on an annual auditing plan, and involve audits related tothe execution of business by subsidiaries and evaluations ofinternal control related to financial reporting. Recommendations
for improvements and corrective action are issued as needed
after verifying the appropriateness and effectiveness of internal
control.

Coordination Between Auditors, Accounting Auditor
and the Internal Auditing Department
Auditors and accounting auditor maintain independence from one
another while periodically discussing matters such as auditing

57

Integrated Report 2021

Internal Directors
Basic Compensation,
Compensation is made up of
Stock
Performance-based Compensation andRemuneration, and as a standard, the compensation ratios
shown on the right make up compensation when performancetargets are met.
Outside Directors
In light of the role of Outside Directors to oversee managementfrom an independent standpoint, their compensation comprises
Basic Compensation
only<Forthcoming Issues>

Evaluation of the Effectiveness of the Board of Directors
To verify that the Board of Directors is functioning appropriately
overall and to take appropriate measures including improving
upon issues based on the results, the effectiveness of Board of
Directors is evaluated each year in an effort to ensure ongoing
improvements to its functioning.
In FY2020, Board of Directors was forced to postpone inperson meetings and inspections of business sites, but online
meetings were arranged to further enhance the conduct ofprocedures.
Open and constructive remarks and discussions took place in a
lively manner at Board of Directors meetings. The recommendations
and issues raised by Outside Directors and Auditors in particularsignificantly contributed to discussions, and Board of Directors
overall has been evaluated as maintaining its effectiveness.
As forthcoming issues, consideration will be given to enhancing
discussions related to management issues and sustainability
management from Mid-to-long-term perspectives, along withimprovements to the effectiveness evaluation process.

Design of Compensation Systems for Directors and Officers
The Nomination and Compensation Committee met 5 times in
FY2020 and mainly discussed over the compensation system for
Directors and Officers. The Board of Directors made revisions tothe compensation system, including the introduction of treasury
stock-based compensation, based on the report from theCommittee regarding the compensation system in place.

(1) Compensation of Directors

Accounting Auditor<Structure of Compensation>

The Company has adopted the basic policy of ensuring that
Director compensation functions as a healthy incentive tosustainable growth.
From the end of 2020, the Nomination and Compensation
Committee has engaged in repeated discussions regarding
revisions to the compensation system including the introductionof stock remuneration, with the aim of providing incentives to
Directors (excluding Outside Directors) to ensure the ongoing
improvement of the Company’s corporate value while
promoting the further sharing of value between Directors andshareholders.
As a result, the compensation system was revised,
including the introduction of stock remuneration for Directors(excluding Outside Directors) and Officers of the Company.
An overview of the latest compensation system (policy on
determining the details of compensation, etc. for individual
Directors) is as follows.

<Compensation Levels>
Compensation levels are set based on a person’s duties andresponsibilities, the financial position of the Group and its
operating results, with reference to the compensation levels ofother domestically listed companies in the same industry withsimilar market capitalization and sales volume.

In conjunction with the formulation of the new compensation
system, the Nomination and Compensation Committee and
Board of Directors have confirmed that they will continually
Stock Remuneration, and theexamine the system design ofdetails and ratios of the variable compensation combining
Stock Remuneration.
Performance-based Compensation andBased on this policy, the Company will study the overall
compensation system on an ongoing basis.

(2) Compensation of Auditors
The compensation of Auditors comprises only fixedcompensation, due to the role of auditors to conduct auditingfrom an independent standpoint. The compensation of Auditors isdetermined and paid through consultation between Auditors.

Foundations of Value Creation

Ratios of Internal Director Compensation
Fixed compensation
Component
ratio

Variable compensation

Basic
PerformanceStockcompensation based compensation
Remuneration
Approximately 60% Approximately 20% Approximately 20%

Payment method Monetary payment Monetary payment Stock-based payment
Types of compensation, etc.
Fixed

As a body that assists the President and CEO in decision making,the Group Executive Committee is comprised mainly of Directors(excluding Outside Directors), Officers and corporate Auditors(excluding Outside Auditors) of the Company. The Committee
meets twice a month in principle, discussing and maiking decisions
on policies related to NLM Group management and important
items concerning management execution.
While matters that specifically requiring resolution of Board of
Directors and other important management items are decided by
the Board, by engaging in lively exchanges of views in the Group
Executive Committee as an opportunity to review matters before
they are resolved by or reported to Board, constructive debate andexchanges of opinions in Board of Directors is encouraged.
Particularly with regard to the acquisition or disposition of shares or
fixed assets, loans and guarantees, the standard for requirement toresolution of Board of Directors are clearly settled, by amountsetting for each type, concerning various risks such as credit risks
or regional and market risks. Matters that fall below the amounts
are delegated to Group Executive Committee and other executive
management, enabling Board of Directors to focus on thediscussion of essential strategies aimed at Mid-to-long-term
growth.

targets and methods. They also coordinate to ensure that audits
are conducted efficiently, such as endeavoring to exchange views
and share information as needed.
In addition, Auditors and the internal auditing department
maintain independence from one another while coordinating toensure that audits are conducted efficiently, such as byexchanging views and sharing information as needed with regard
to auditing targets, auditing methods and the status of risks.
Additionally, twice a year Auditors, accounting auditor and theinternal auditing department conduct three-way meetings to
discuss internal control issues associated with audits and financial
reporting.

Overview

Basiccompensation

Base compensation is set as fixedcompensation based on an officer’s
position, responsibilities and other factors.

Performancebased
compensation

Performance-based compensation varies
depending on business performance in theprevious fiscal year, the attainment level ofmanagement plans (operating profit, ROCE,etc.), and the level of contribution to Groupmanagement, etc.

StockRemuneration· This is a restricted stock-based compensation
scheme paid depending on the position of Directors.
· The compensation is in the form of pre-issuance typecommon shares with a restriction on transfer until theretirement of the officer in question.
· If, during the period of restriction on transfer, theDirector violates a law or otherwise acts in a mannerthat is contrary to the purpose for which the system
was established, the Company will acquire the sharesin question at no cost.

VariableGroup Executive Committee

Value Creation

Message from an Outside Director

Striving for best governance as a pure holding company!
Ten fiscal periods have now passed since the pure holding
company Nippon Light Metal Holdings Co., Ltd. adopted asystem of overseeing management of the operating
subsidiaries making up the NLM Group.
The management structure of having a slimmed-down pureholding company bring together and manage a group of
subsidiaries providing a wide range of products and services
with aluminum at its core was truly the most appropriate
structure for the Nippon Light Metal Group in its quest forbest governance.
In other words, the best governance system, where internal
Directors and Auditors familiar with the work of operatingcompanies and Outside Directors and Auditors with high-level
expert insight and experience can frankly express theiropinions with one another and engage in open discussions at
Board of Directors meetings to make decisions that help
maximize the benefits to stakeholders, has finally taken root.
To further bolster this governance system the Nomination
and Compensation Committee was established in February
2020, and with myself acting as chairperson, we started bydiscussing the role of officer compensation. As a result, fromFY2021 we have introduced stock remuneration for internal
Directors and Officers, and by providing them with incentives
to improve corporate value in the medium and long term, I
believe we have created a system enabling the Company’s
senior management and stakeholders to share best
governance.
We are also in the beginning stages of designing a program
to select and develop the next generation of managers whowill be able to anticipate the needs of the times, and I lookforward to further discussions on this going forward.
However, unfortunately the Company has faced a series ofincidents concerning inappropriate conduct relating to quality
control in 2021.

While expressing my sincere regret
over these incidences as Director,
I have also made painfully aware of theneed to thoroughly analyze and review
Masato Ono,
the points where compliance andOutside Director
governance failed to function properly.
We are now waiting for the resultsfrom the Special Investigation Committee on the true case of
these incidents, but as Directors of the Company, we
understand that part of our mission is to properly recognize
the corporate culture that reflects the Company’s values, toclarify the gap between our vision and reality after clearlyenvisaging the best governance the Company should pursue,
and to guide the NLM Group in the right direction.
In addition, there is a growing need to respond to ESG and
DX-oriented system reforms in more sophisticated ways as apersistent corporate challenge. As a starting point, we haveengaged in lively discussions regarding the Company’s
materiality and value creation process, and I think the fact that
we have compiled the Company’s first “Integrated Report” isworthy of recognition.
As corporate governance reform progresses, a pure holding
company should be aware of the perspective that corporate
governance flows from individual subsidiaries to the entire
Group, and that there is a need to build effective governancethat is consistent with corporate culture and strategy, andwhich overlooks the whole Group.
Under these circumstances, I think that the role played by
Nippon Light Metal Holdings Co., Ltd. as a pure holding
company aiming for the best governance will continue tobecome increasingly diverse.

Integrated Report 2021

58

Basic Information

Value Creation

Foundations of Value Creation

List of Officers
April 1980 : Joined Nippon Light Metal Co., Ltd.
June 2007 : Officer of Nippon Light Metal Co., Ltd.
June 2011 : Executive Officer of Nippon Light
Metal Co., Ltd.
June 2012 : Director and Executive Officer of
Nippon Light Metal Co., Ltd.
October 2012 : Director of Nippon Light Metal
Holdings Co., Ltd.
June 2014 : Director and Senior Executive Officerof Nippon Light Metal Co., Ltd.
June 2020 : Director and Executive Vice Presidentof Nippon Light Metal Co., Ltd.

President and CEO

Director, General Manager of Central Product Safety & Quality Assurance Division

Outside Director

Outside Director

Ichiro Okamoto

Toshihide Murakami

Ryoichi Hayashi

Toshihito Hayano

April 1969 : Joined Nomura Research Institute, Ltd.
May 1996 : Managing Director of Nomura
Research Institute, Ltd.
 anaging Director of KOKUSAI
June 1996 : M
Securities Co., Ltd. (currently Mitsubishi
UFJ Securities Holdings Co., Ltd.)
June 1998 : Representative Director and Senior
Managing Director of KOKUSAI
Securities Co., Ltd.
June 2001 : President of KOKUSAI Capital
Corporation (currently AG CapitalCo., Ltd.)
October 2012 : Substitute Auditor of Nippon Light
Metal Holdings Co., Ltd.
June 2016 : Outside Auditor of Nippon Light Metal
Holdings Co., Ltd.
June 2018 : Outside Director of Nippon Light
Metal Holdings Co., Ltd.

Outside Director

Outside Director

April 1980 : Joined Fujitsu Limited
April 2012 : Corporate Officer of Fujitsu Limited
April 2014 : Corporate Executive Officer of Fujitsu
LimitedJanuary 2015 : Vice President of Fujitsu Limited
June 2015 : Representative Director and CEO of
Fujitsu Limited
June 2019 : Director, Chairman of Fujitsu Limited
April 2020 : Director, Chairman of FujitsuMarketing Limited
October 2020 : Director, Chairman of Fujitsu Japan
LimitedJune 2021 : Outside Director of Nippon Light
Metal Holdings Co., Ltd.

Keiko Tsuchiya

Tatsuya Tanaka

April 1981 : Joined Nippon Light Metal Co., Ltd.
June 2006 : Officer of Nippon Light Metal Co., Ltd.
June 2009 : Director and Executive Officer of
Nippon Light Metal Co., Ltd.
June 2012 : Director and Senior Executive Officerof Nippon Light Metal Co., Ltd.
October 2012 : Director of Nippon Light Metal
Holdings Co., Ltd.
June 2013 : President and CEO of Nippon Light
Metal Co., Ltd.
June 2015 : President and CEO of Nippon Light
Metal Holdings Co., Ltd.

April 1980 : Joined Nippon Light Metal Co., Ltd.
June 2008 : Officer of Nippon Light Metal Co., Ltd.
June 2012 : Executive Officer of Nippon Light
Metal Co., Ltd.
October 2012 : Officer of Nippon Light Metal Holdings Co., Ltd.
June 2013 : Director of Nippon Light Metal
Holdings Co., Ltd.
 irector of Nippon Light Metal Co., Ltd.
June 2013 : D
June 2014 :Director and Senior Executive Officerof Nippon Light Metal Co., Ltd.
June 2020 : Director and Executive Vice Presidentof Nippon Light Metal Co., Ltd.

April 1978 : Joined Toyo Aluminium K.K. (whichmerged with Nippon Light Metal Co.,
Ltd. in October 1999)
June 2010 : Executive Officer of Toyo Aluminium K.K.
June 2016 : Managing Executive Officer of Toyo
Aluminium K.K.
June 2019 : Senior Managing Executive Officer of
Toyo Aluminium K.K.
June 2020 : President and COO of Toyo Aluminium
K.K.
June 2020 : Director of Nippon Light Metal
Holdings Co., Ltd.

Director, General Manager of Central HR, General Affairs and Accounting OfficeDirector in charge of the Toyo Aluminium Business Group

Yasunori Okamoto

Kaoru Kusumoto

Director in charge of the Toyo Aluminium Business Group

Director in charge of the Nippon Light Metal Business Group Nippon Fruehauf BusinessYoshihiro Tomioka

Toshikazu Tanaka
April 1985 : Joined Nippon Light Metal Co., Ltd.
June 2015 : Officer of Nippon Light Metal Co., Ltd.
June 2018 : Executive Officer of Nippon Light
Metal Co., Ltd.
June 2018 : Officer of Nippon Light Metal Holdings
Co., Ltd.
June 2019 : Director of Nippon Light Metal
Holdings Co., Ltd.
June 2019 : Director and Executive Officer of
Nippon Light Metal Co., Ltd.

April 1985 : Joined Nikkei Kako Co., Ltd. (whichmerged with Nippon Light Metal Co.,
Ltd. in April 1989)
June 2017 : Officer of Nippon Light Metal Co., Ltd.
June 2021 : Director and Executive Officer of
Nippon Light Metal Co., Ltd.
June 2021 : Director of Nippon Light Metal
Holdings Co., Ltd.

Director in charge of Nikkei Light Metal Business Group Rolled Products
Division, Purchasing Officer of Central HR, General Affairs and Accounting OfficeDirector, General Manager of Central Technology Office, in charge of
Nippon Light Metal Business Group Chemicals Business

Masahito Saotome

Toshihiro Matsuba
April 1988 : Joined Nippon Light Metal Co., Ltd.
June 2017 : President and CEO of Nikkei MC
Aluminium Co., Ltd.
June 2021 : Director and Executive Officer of
Nippon Light Metal Co., Ltd.
June 2021 : Director of Nippon Light Metal
Holdings Co., Ltd.

Shuichi Asakuno
59

Integrated Report 2021

April 1981 : Joined DENTSU INC.
October 2005 : Executive Officer, Head of HR
Division, Asia-Pacific Region of GE
Toshiba Silicones Co., Ltd. (nowMomentive Performance Materials
Japan LLC)
February 2011 : Vice President, Human Resources
Division of Johnson & Johnson K.K.
August 2015 : Director of Adecco Ltd.
June 2020 : Outside Director of Nippon Light
Metal Holdings Co., Ltd.

April 1986 : Joined Nippon Light Metal Co., Ltd.
June 2014 : Officer of Nippon Light Metal Co., Ltd.
June 2018 : Director and Executive Officer of
Nippon Light Metal Co., Ltd.
June 2018 : Director of Nippon Light Metal
Holdings Co., Ltd.
June 2021 : President and CEO of Nippon
Fruehauf Co., Ltd.

April 1980 : Joined Toyo Aluminium K.K. (whichmerged with Nippon Light Metal Co.,
Ltd. in October 1999)
April 2006 : President and CEO of Toyo Aluminium
Ekco Products Co., Ltd.
June 2015 : Managing Executive Officer of Toyo
Aluminium K.K.
June 2017 : Director and Managing Executive
Officer of Toyo Aluminium K.K.
June 2017 : Director of Nippon Light Metal
Holdings Co., Ltd.

Director in charge of Nippon Light Metal Business Group Metals and Industrial Components
Business, Nippon Light Metal Business Group Nikkei MC Aluminium Business

April 1974 : Joined Mitsubishi Corporation
April 2007 : Director of Mitsubishi Corporation
March 2012 : President and CEO of MMP K.K.
July 2012 : Energy Business Group Advisor at
Mitsubishi Corporation
June 2013 : Director of Nippon Light Metal
Holdings Co., Ltd.
March 2014 : Director of Tokai Carbon Co., Ltd.

April 1974 : Joined Dai-Ichi Kangyo Bank, Ltd.
(now Mizuho Bank, Ltd.)March 2006 : Managing Executive Officer of Mizuno
Bank, Ltd.
June 2007 : Director and Deputy President ofMizuho Financial Group, Inc.
June 2008 : Executive Officer and Vice Presidentof Japan Hades Co., Ltd.
June 2012 : Outside Director of Nippon Light
Metal Co., Ltd.
October 2012 : Outside Director of Nippon Light
Metal Holdings Co., Ltd.

Outside Director

Masato Ono

Full-time Auditor

Full-time Auditor

AuditorKotaro Yasuda

Hideo Hirosawa

Masahiro Yoshida

Outside Auditor

Outside Auditor

Outside Auditor

Yoshiki Sato

Shintaro Kawai

Jinseki Kim

Officer Minoru Sotoike

In charge of Nippon Light Metal
Business Group Panel System
Business

Deputy Manager of Central Product
Officer Kazuyoshi Sugiyama Safety & Quality Assurance Division, incharge of Central CSR and Audit Office
Officer Yoshiaki Ito

In charge of Nippon Light Metal
Business Group Nikkeikin Kakoh
Kaihatsu Business

Officer Hiroyuki Matsudaira

General Manager of Central Planning
OfficeOfficer Masakazu Ichikawa

General Manager of Central CSR and
Audit Office

Officer Masayoshi Tsujino

In charge of the Toyo Aluminium
Business Group

Officer Isao Shikine

In charge of Nippon Light Metal
Business Group Electrode Foil
Business

Integrated Report 2021

60

Basic Information

Value Creation

Foundations of Value Creation

Operating Results and Financial Analysis
Overview of Operating Results

Segment Information / Operating Profit (YoY)

The consolidated fiscal year under review began under theextremely harsh environment due to a global economic slowdown
caused by the COVID-19 pandemic. In the aluminum industry,
demand was slumping from the start of period in many fields
including automotive and construction materials, and despite
rebounding afterward, demand was down for the whole year.
Aluminum ingot prices also fell at the beginning of the period
before adopting a rising trend.
Looking at consolidated business performance in the fiscal
year under review that took place under these circumstances,although sales for PCs and in relation to food and daily
necessities rose due to increased demand from the spread oftelework and at-home consumption, due to the middling recovery
of sales in automotive and many other fields, net sales fell short ofthe previous fiscal year. However, on the profit front, in part due tothe contribution of highly profitable goods such as fabricatedsheets, we managed to maintain operating profit and ordinary
profit largely on par with the previous fiscal year. Since steadyprogress was made with sediment control measures at the
Amehata Dam owned by NLM HD subsidiary Nippon Light Metal
Co., Ltd. which makes reasonable cost estimates possible, as aresult of recording expected sediment control costs from FY2022
through to FY2024 as extraordinary losses, profit attributable toowners of parent fell far short of the previous fiscal year.
FY2020 Financial Results (YoY)

(Unit: billion yen)

FY2020 result

FY2019 result

ChangeNet sales

432.6

465.9

-33.3
(-7.2%)

Operating profit

24.2

24.6

-0.4
(-1.7%)

Ordinary profit

24.0

23.5

+0.5
(+2.4%)

Extraordinary losses(sediment control costs)

-16.2

-11.0

-5.2

Profit attributable toowners of parent

3.4

7.5

-4.1
(-55.0%)

ROCE

8.4%

8.0%

+0.4p

Dividend per share

65 yen90 yen*-25 yen* On October 1, 2020, the Company conducted a one-for-ten reverse stock split.
Dividend per share is calculated as if the reverse stock split had taken place at the
beginning of FY2019.

Segment Information / Net Sales (YoY)
FY2020 result

Alumina, Chemicals
and Ingot Business

61

91.2

(Unit: billion yen)

FY2019 result

Change

102.8

-11.6
(-11.3%)

Sheet and Extruded
Products Business

97.9

101.2

-3.3
(-3.3%)

Fabricated Products
and Other Businesses

157.3

173.0

-15.7
(-9.1%)

Foil and Powder
Products Business

86.2

88.9

-2.7
(-3.0%)

Total

432.6

465.9

-33.3
(-7.2%)

Integrated Report 2021

FY2020 result

FY2019 result(Unit: billion yen)
ChangeAlumina, Chemicals
and Ingot Business

9.6

10.9

-1.3
(-11.8%)

Sheet and Extruded
Products Business

6.0

3.6

+2.4
(+67.3%)Fabricated Products
and Other Businesses

8.9

10.4

-1.5
(-14.8%)

Foil and Powder
Products Business

3.3

3.1

+0.2
(+7.7%)

Administration /Common

-3.6

-3.4

-0.2

Total

24.2

24.6

-0.4
(-1.7%)

Alumina, Chemicals and Ingot BusinessAlumina and Chemicals Segment
Net sales and operating profit fell short of the previous fiscal year
across the entire segment due to slumping demand for refractorymaterials and automotive products related to our flagshipaluminum hydroxide and alumina-related products, and lower
sales of flocculants and inorganic chlorides in relation tochemicals.
Aluminum Ingot Segment
Demand for secondary alloys destined for the key automotive
sector rebounded strong in Japan and overseas in the second
half of the fiscal year but declined overall, resulting in a year-onyear decline in net sales as well as a fall in operating profit for thesegment.

Sheet and Extruded Products Business
Sheet Products Segment
Sales volume of thick sheets for semiconductor and liquid crystal
manufacturing equipment rose year on year, and sales volume forfabricated sheet products surpassed the previous fiscal year due
to continued strong PC demand. However, due to the decline insales for automotive applications and construction materials, net
sales remained largely the same as the previous fiscal year. On
the profit front, thanks to increased sales of highly-profitablefabricated sheet products, there was a significant year-on-year
rise in profits.
Extruded Products Segment
Despite seeing a rebound in demand for the key automotive
sector, due to the decline in sales related to construction
materials, net sales fell short of the previous fiscal year, while
operating profit was largely flat year over year.

Fabricated Products and Other Businesses
Transportation Segment
Truck mounting business: Net sales fell short of the previous
fiscal year mainly due to a reactionary fall from prior run-up
demand associated with strengthened exhaust regulations andinventory adjustments made by truck manufacturers, in addition
to the effects of lower demand in the truck business overall due
to a shortage of drivers in Japan and improved logistics
efficiency. On the profit front, operating profit increased year on
year, in part reflecting the effects of falling material prices.
Heat exchange products business: Air conditioning condenser
demand slumped, particularly for the key light automobile

sector, resulting in both net sales and operating profit recording
year-on-year declines.
Forging and casting material business: After demand slumped
in the first half, sales of forged products for electric vehicles
rose in the second half. Similarly there was a rise in sales ofcast products in the key brake caliper segment and for electricvehicles. As a result, net sales rose year on year, and operating
profit far surpassed the previous fiscal year.
Electronic Materials Segment
While the first half of the fiscal year was characterized byinventory adjustment aspects, there was a recovery in the second
half driven by demand for automotive equipment. As a result,sales volume of electrode foil for aluminum electrolytic capacitorsrose, leading to year-on-year gains in both net sales andoperating profit.
Panel System Segment
In the clean room sector, there was solid demand for 5th
generation mobile communication system (5G)-related electronic
component plants and data centers, but sales for medical andpharmaceutical applications declined. Segment-wide net sales
and operating profit both declined year on year, in part due to a
decline in large-scale investments for food processing plants andpostponed plans among store locations in the freezing andrefrigeration sector.
Landscape Engineering Segment
For structures, strong demand continued from the previous fiscal
year for sluice gate and purification plant coverings, and sales ofkey balustrade products for roads and bridges also increased.
However, sales declined in the area of urban landscapeengineering, reflecting the end of demand related to the Olympics.
As a result, segment-wide net sales declined year on year, but
operating profit increased significantly compared with the previous
fiscal year, driven by performance related to roads and bridges.
Carbon Products Segment
Sales to the iron and steel industry, which is the segment’s main
customer, failed to recovery from the decline in the first half of the
fiscal year, resulting in lower sales of the flagship carbon block
products. Combined with declining sales in the heat treatment
business for lithium-ion battery anode materials, both net sales
and operating profit recorded year-on-year declines.

Foil and Powder Products Business
Foil Segment
In the field of material foils, sales of exterior foils for lithium-ion
batteries and foils for cathode materials increased, reflecting
strong demand for PCs and rebounding automotive demand,
especially in China. In the field of processed foils, sales ofprocessed foils for pharmaceutical packaging materials declined,
and sales of products for the antenna circuits of IC cards also fell.
However, segment-wide net sales and operating profit increased
year over year due to solid demand for water-repellent processedfoil for food applications in response to increased at-homeconsumption.
Powder and Paste Segment
Among powder products, there were strong sales of electronicmaterial aluminum powder products for heat dissipation
applications thanks to brisk demand for PCs, but sales ofaluminum nitride were sluggish. Among paste products, sales
volume dropped significantly due to fewer cars and vehicles being
produced despite a rebound in demand for our flagshipautomotive coating products. As a result, segment-wide net sales
and operating profit fell short of the previous fiscal year.

Overview of Financial Position
In conjunction with various measures built into its mid-term
management plan aimed at establishing a healthier and firmer
management position, the NLM Group has concentrated on
reducing interest-bearing debt and enhancing shareholders’equity to improve its financial strength.
Total consolidated assets at the end of the fiscal year underreview rose by 36,951 million yen year on year to 506,955 million
yen, in part due to an increase in cash and deposits. Liabilities
increased 31,045 million yen year on year to 299,851 million yen,in part reflecting the increase in allowance for sediment control
measures. Net assets rose 5,906 million yen year on year to207,104 million yen, due to higher foreign currency translation
adjustments among other factors. The equity ratio fell from 39.6%
at the end of the previous fiscal year to 37.6%.

Cash flows from operating activities
Net cash provided by operating activities in the fiscal year underreview resulted in 41,942 million yen. This reflects that non-cash
profit and loss items such as profit before income taxes anddepreciation exceeded expenditures such as income tax
payments. Net cash provided by operating activities was down
6,734 million yen compared with the previous fiscal year. This ismainly due to trade receivables remaining largely flat in the fiscal
year under review despite significantly declining in the previous
fiscal year.

Cash flows from investing activities
Net cash used in investing activities was 25,674 million yen in thefiscal year under review. This was mainly due to purchases ofproperty, plant and equipment. Net cash used in investing
activities declined by 4,010 million yen compared with theprevious fiscal year, mainly due to the relative decline in purchaseof property, plant and equipment.

Cash flows from financing activities
Net cash provided by financing activities for the fiscal year underreview resulting in 8,194 million yen. This was mainly due toproceeds from long-term borrowings. Net cash provided byfinancing activities resulted in 8,194 million yen in the fiscal year
under review in contrast to a net cash outflow of 15,745 million
yen in the previous fiscal year, which was mainly due to theincrease in proceeds from long-term borrowings.
As a result of these changes in cash flow, on a consolidated basis
cash and cash equivalents increased 24,880 million yen (68.5%)
compared with the end of the previous fiscal year to 61,176
million yen.

Integrated Report 2021

62

Basic Information

Value Creation

Key Financial Data for the Past Ten Years

Foundations of Value Creation(unit: million yen)

(Fiscal year)

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Operating Results
Net sales
Gross profit margin (%)
Operating profit
Ordinary profit
Profit attributable to owners of parent

403,00916.8
13,6659,709
2,856

371,887
16.9
8,154
6,873
3,355

402,82917.1
12,617
12,7305,128

431,477
17.8
19,30520,6009,645

464,405
19.2
26,821
24,526
15,533448,38120.4
30,22526,252
19,520481,439
19.5
29,89329,53318,012500,451
19.4
30,05231,084
20,560465,946
20.1
24,60723,475
7,476

432,568
20.8
24,19424,0303,366

Segment Information
Net sales
Alumina, Chemicals and Ingot Business
Sheet and Extruded Products Business
Fabricated Products and Other Businesses
Foil and Powder Products Business

99,56070,618
127,972
104,859

93,902
63,161
126,218
88,606

105,488
71,274132,261
93,806

114,339
82,823138,088
96,227

109,844
103,340
149,220
102,001

101,840
98,165
154,684
93,692

111,100
106,955
169,019
94,365

117,008
107,835
180,259
95,349102,833
101,193
172,975
88,94591,18197,850157,297
86,240Operating profit (loss)
Alumina, Chemicals and Ingot Business
Sheet and Extruded Products Business
Fabricated Products and Other Businesses
Foil and Powder Products BusinessElimination or corporate

5,227
1,569
6,392
3,402
(2,925)

3,273
1,675
6,974
(771)
(2,997)

2,917
2,668
7,224
2,889
(3,081)

6,069
4,230
7,704
4,183
(2,881)

9,138
3,058
10,958
6,829(3,162)

10,126
7,775
10,245
5,478(3,399)

8,954
9,767
9,783
4,856
(3,467)

9,616
7,152
11,681
5,114(3,511)

10,902
3,556
10,4403,074(3,365)

9,614
5,950
8,892
3,311
(3,573)Financial Position
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Shareholders’ equity
Accumulated other comprehensive income
Non-controlling interests
Balance of interest-bearing debt

225,200
197,471
192,070
121,752
100,033
434
8,382
187,697

217,648
202,138
182,173
122,989
102,297
2,851
9,476
188,844

226,807
205,731
181,520
129,824
105,787
4,629
10,778
198,668

248,906
208,371
202,220
117,672
111,791
9,631
15,963
188,990

247,363
204,831
186,881
120,894
124,884
5,300
14,235
182,207

246,394
202,229
184,277
90,722
154,600
5,053
13,971
149,835

262,671
204,528
191,729
86,148167,115
6,842
15,365
139,997

267,238
214,065
184,364
94,204
183,163
4,691
14,881
139,570

246,374
223,630
162,341
106,465
184,547
1,728
14,923
132,622

270,781
236,174
166,116
133,735
184,763
5,949
16,392
146,229

Cash Flows
Cash flows from operating activities
Depreciation
Cash flows from investing activities
Capital expenditures
Cash flows from financing activities

19,537
17,040(18,289)
23,167(6,915)18,030
16,259(14,025)
17,121(5,175)

18,14816,435(18,998)
14,001
5,762

11,78016,406(7,119)15,869(17,581)

37,77016,356(19,419)
18,861(10,708)

36,48816,602(11,887)
19,908(24,432)

25,86817,126(14,948)
21,077(17,040)

34,644
17,294(22,777)
29,926(8,904)

48,676
18,694(29,684)
29,978(15,745)

41,942
19,157(25,674)
25,933
8,194

Per-Share Information (yen) (Note)
ProfitDiluted profit
Net assets
Amount of dividends

52.51—
1,847.13
2.0

61.69
—
1,933.30
3.0

94.29
90.43
2,030.30
4.0

177.35155.862,232.72
5.0

285.62251.012,393.87
6.0

345.79314.65
2,578.24
8.0

290.88—2,809.28
8.0

332.03—
3,033.74
9.0

120.73—3,008.26
9.0

54.37
—
3,081.54
65.0

4.9
2.9
23.8

3.7
3.3
25.0

5.9
4.8
25.5

8.2
8.3
26.6

9.0
12.3
28.8

9.6
13.5
35.6

10.7
10.8
37.2

10.8
11.4
39.0

8.0
4.0
39.6

8.4
1.8
37.6

545,126
4,902
10,041

545,126
5,063
10,392545,126
4,984
10,438545,126
4,495
13,335545,126
4,794
12,961

619,938
4,939
13,126

619,938
5,177
12,855619,938
5,447
13,316

619,938
5,867
13,611

61,994
5,935
13,162

Indicators (%)
Return on capital employed
Return on equity
Equity ratio
OthersNumber of shares issued (thousand shares) (Note)
Research and development expenses
Number of employees

Note: The Company conducted a 10-to-1 reverse stock split of common shares on October 1, 2020. Profit per share, diluted profit per share and net assets per
share are calculated on the assumption that the reverse stock split was carried out at the beginning of FY2011. Dividend per share lists the actual dividend
amounts regardless of whether before or after the reverse stock split in question.

63

Integrated Report 2021

Integrated Report 2021

64

Basic Information

Value Creation

Foundations of Value Creation

Consolidated Financial Statements
Consolidated Balance Sheets
Item

Fiscal Year
Ended March
2021(Unit: million yen)

Fiscal Year
Ended March
2020

Increase(decrease)

AssetsItem

Fiscal Year
Ended March
2021

Fiscal Year
Ended March
2020

270,781

246,374

24,407

Cash and deposits

61,22936,34924,880Notes and accounts
receivable - trade105,003

105,458(455)

27,270Share of profit of entities accounted for using equity method

623

268

355

664

653

11

2,900

2,759

141

Long-term borrowings

82,897

69,29913,598

4,080

4,546

(466)

Retirement benefit liability

19,92920,115(186)

Interest expenses

1,033

1,211

(178)

Other non-operating expenses

3,047

3,335

(288)

Ordinary profit

24,03023,475555

Extraordinary losses

16,20011,0005,200

Sediment control costs

16,20011,0005,200

Profit before income taxes

7,830

12,475(4,645)

Income taxes - current

6,691

4,897

1,794

Income taxes - deferred(3,958)(1,707)(2,251)

Profit

5,097

9,285

(4,188)

Profit attributable to non-controlling interests

1,731

1,809

(78)

Profit attributable to owners of parent

3,366

7,476

(4,110)

5,348

Other

5,611

5,789

(178)

299,851

268,806

31,045

Non-current liabilities

Total liabilities
Net assets

184,763

184,547

216

Share capital

46,52546,525—

Capital surplus

18,992

18,983

9

119,377

119,108

269

(131)

(69)

(62)

6,234

Land

54,69054,587103

Retained earnings

Construction in progress

9,555

8,894

661

Treasury shares
Accumulated othercomprehensive income

49,99644,006

5,990

Investment securities

30,241

27,560

2,681

Deferred tax assets

11,898

8,981

2,917

OthersAllowance for doubtful
accounts
Total assets

65

Shareholders’ equity

Tools, furniture andfixtures

Investments and other assets

Integrated Report 2021

8,402

7,732

670

(545)

(267)

(278)

506,955

470,004

36,951

502

106,465

173,757

1,650

3,414

133,735

179,105

4,312

3,916

6

14,025

5,962

Non-operating income

387

10,609

Other

(413)

393

24,634(444)

24,607

Interest and dividend income

Allowance for sedimentcontrol measures

1,555

24,194

1,115

12,544

1,111

Operating profit

33,191

223,630

Goodwill(3,127)34,306236,174

1,206

69,002

Other

—

5,867

65,875

673

(385)

7,073

Selling, general and administrative expenses

2,654

(385)

Intangible assets(3,540)3,327

Bonds payable

576

93,609

Income taxes payable

(197)

5,658

90,069(2)

10,767403

Gross profit

62,670

10,57049,104(29,838)

62,668Other49,507372,337

Short-term borrowings(1,016)

Machinery, equipment andvehicles342,499

1,989

66,6103,605

Cost of sales

63,826

65,59455,514(33,378)

65,815Inventories

59,119465,946

Notes and accounts
payable - trade

1,195

Buildings and structures

432,568

3,775

27,575

Property, plant and equipment

Sales

Increase(decrease)

162,341

28,770Non-current assets

Fiscal Year Ended March
2020

166,116

Current liabilities

Electronically recordedmonetary claims - operating

Allowance for doubtful
accounts(Unit: million yen)
Fiscal Year Ended March
2021

Item

Increase(decrease)

Liabilities

Current assets

Consolidated Statements of Income

5,949

1,728

4,221

Valuation difference on
available-for-sale securities

3,642

2,230

1,412

Deferred gains or losses onhedges

24

(120)

144

Revaluation reserve for land

145

145

—

Foreign currency translation
adjustment

2,665

1,084

1,581

Remeasurements of defined
benefit plans(527)(1,611)

1,084

Non-controlling interests

16,392

14,923

1,469

Total net assets

207,104

201,198

5,906

Total liabilities and net assets

506,955

470,004

36,951Other non-operating income
Non-operating expenses

Consolidated Statements of Cash Flows(Unit: million yen)
Fiscal Year Ended March
2021

Fiscal Year Ended March
2020

Cash flows from operating activities

41,942

48,676(6,734)

Cash flows from investing activities(25,674)(29,684)

4,010

Cash flows from financing activities

8,194(15,745)

23,939

418

(296)

714

Net increase (decrease) in cash and cash equivalents

24,8802,951

21,929Cash and cash equivalents at beginning of period

36,29633,345

2,951

Cash and cash equivalents at end of period

61,17636,29624,880Item

Effect of exchange rate change on cash and cash
equivalents

Increase(decrease)

Integrated Report 2021

66

Basic Information

Company and Share Information

Global Network

Corporate Overview

Value Creation

Foundations of Value Creation

Alumina, Chemicals, and Ingot Business

Sheet and Extruded Products Business

Fabricated Products and Other Businesses

Foil and Powder Products Business

Share Information (as of March 31, 2021)

Company Name

Nippon Light Metal Holdings Co., Ltd.

Total Number of Authorized Shares

200,000,000 shares

Head Office Location

Urbannet Uchisaiwai-cho Building,
1-1-13 Shinbashi, Minato-ku, Tokyo

Total Number of Issued Shares

61,993,750 shares

Share capital

46,525,000,014 yen

President and Chief Executive Officer

Ichiro Okamoto

Number of Employees

13,162 (consolidated)

Nippon Light Metal Holdings
Nippon Light Metal
Nikkei Sangyo

48,930

Number of Shareholders

Note: The Company conducted a 10-to-1 reverse stock split of common shares on October 1, 2020.

Established

October 1, 2012

Stock Exchange Listings

Tokyo Stock Exchange First Section(Securities Code: 5703)

Note: All data as of FY2020 or March 31, 2021

Major Shareholders (top ten)
Number of
Ratio of
Shares Held Shareholding(%)(in thousands)

Name of Shareholder

The Master Trust Bank of Japan, Ltd.
(Trust Account)

7,913

Custody Bank of Japan, Ltd. (Trust Account)

5,046

8.2

The Dai-ichi Life Insurance Company, Limited

2,000

3.2

Nikkei-Keiyu-Kai

1,722

2.8

The Light Metal Educational Foundation, Inc.

1,491

2.4

Custody Bank of Japan, Ltd. (Trust Account 9)

1,358

2.2

Asahi Mutual Life Insurance Company

1,275

2.1

JPMC GOLDMAN SACHS TRUSTJASDEC LENDING ACCOUNT

1,212

2.0

Mizuho Bank, Ltd.

1,126

1.8

DFA INTL SMALL CAP VALUE
PORTFOLIO

1,057

1.7

12.8

Nikkei MC Aluminium
Aluminium Wire Rod

Nikkei Kenzai Kogyo

Nikkei Partners

Nikkei Panel System
Nikkei Engineering

Nikkeikin OhLiS
Shiga Nikkei

Nikkei Information Systems

Shimonoseki Nikkei

Shizuoka Kosan

Nikkei New BusinessArumi Reinetsu

Kinki Kenmazai Kogyo

Nikkei Logistics

KeinaraNikkeikin Kakoh Kaihatsu Holdings

Nikkei Hokkaido

Nikkei Fujioka ikkeikin Aluminium CoreN
Technology

Nikkei Matsuo

Fruehauf Industries

Toyo Rikagaku Kenkyusho
Nikkei Niigata

Nippon Fruehauf

Fruehauf Hokkaido

NLM ECAL
Nikkei Heat Exchanger

Fruehauf Okayama
Fruehauf Kyushu

Nippon Electrode

Fruehauf Shiga

NikkanNKS

Fruehauf Service
Toyo Aluminium
Toyo Aluminium Ekco Products
Toyo Tokai Aluminium Hanbai

Nikkei Kambara
Riken Light Metal Industry
Nikkei Inazawa
Nikkei Metal
Nisshin
Nikkei Technology Center
Nikkei Extrusions

ALP
Toyo Aluminium Kosan
ALPHAMIC

Note: Ratio of shareholding is calculated after excluding treasury shares (89,050 shares).

Nippon Light Metal Group Management Structure
Nippon Light Metal Holdings Co., Ltd.

Nippon Light Metal
Co., Ltd.

Toyo Aluminium K.K.

Nippon Fruehauf Co., Ltd.

Nikkeikin Kakoh Kaihatsu
Holdings Co., Ltd.

Nikkei MC Aluminium
Co., Ltd.

Toyo Aluminium Ekco
Products Co., Ltd.

Nippon Fruehauf domestic
regional companies

Nikkeikin Aluminium CoreTechnology Co., Ltd.

Nikkei Panel System
Co., Ltd.

Toyo Tokai Aluminium
Hanbai Co., Ltd.

Shandong Conglin
Fruehauf Automobile
Co., Ltd.

Riken Light Metal Industry
Co., Ltd.

Nikkei Siam
Aluminium Ltd.

Toyal America, Inc.

Toyo Rikagaku Kenkyusho
Co., Ltd.

OthersNippon Electrode Co., Ltd.

OthersFruehauf MahajakCo., Ltd.

Toyal Europe
Nikkei MC Aluminum America
Nippon Light Metal Georgia
Nippon Light Metal North America
Toyal America

Nikkei Extrusions Co., Ltd.

OthersOthersNikkei MC Aluminum (Kunshan)
Nikkei MC Aluminum (Thailand)
Nikkei Singapore Aluminium
NI Nikkei Shenzhen
Nikkei (Shanghai) Body Parts
Toyo Precision Appliance (Kunshan)
Nikkei (Shanghai) International Trading
Shandong Nikkei Conglin Automobile Parts

Nikkei Siam Aluminium
Nikkei Trading Indonesia
Nikkei Panel System Vietnam

Hunan NingXiang JiWeiXin Metal Powder
Toyal Zhaoqing
Toyal (Thailand)

Fruehauf Mahajak
Toyo Aluminium (Shanghai) Management
Toyo Tokai Aluminium Hanbai (Shanghai)Suzhou Toyo Aluminium Ekco Household
Products

Toyal MMP India

Toyo Aluminium Ekco Trading (Suzhou)
Note: Two dormant companies are excluded.

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Integrated Report 2021

Integrated Report 2021

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