特色

CMYK
DIC223

C84 M80

DIC138

C98 Y11

K100

K100
https://www.nok.co.jp/en/

NOK CORPORATION

Integrated Report2023

NOK Group’s Value Co-Creation

CONTENTS
CHAPTER

01

02

NOK Group Strategic Vision

Top Message
Corporate History

P.02
P.08

Value Creation Process

P.10

Management Capital

P.12

NOK Group’s Main Businesses and Products

P.14

Long-Term Vision and Management Plan
Financial Strategy

P.20
P.22

R&D Strategy
Special Feature: NOK Group’s “Exceeding Expectations with
Extraordinary Efforts” in Manufacturing Technology
HR Strategy

P.24

Promotion of Sustainability Management

P.32

Information Disclosure Based on TCFD Recommendations

P.34

Environment

CHAPTER03
Society

Implementing ESG Initiatives

Governance

Data / Information

Data / Information

NOK Group’s management ethos, embodied in the principle of respect for employees based on care and trust, hasserved as the bedrock of our organization for nearly 80 years. In 2023, we built upon this enduring legacy by crafting
Our Purpose and Our Values — new guiding principles thoughtfully aligned with the prevailing social context.
As Global One NOK, we unite with the shared values embraced by our worldwide workforce, and together, we aim
to achieve a sustainable society while continuing to elevate our corporate worth. We intend to accomplish this goalby generating value that serves social needs and engaging in self-driven, responsible initiatives.

P.26
P.30

Our Purpose
Why we are here

Climate Change Countermeasures
Resource Conservation and Waste Recycling

P.40
P.42

Management of Substances of Environmental Concern
Conservation of Water Resources

P.42
P.43

Human Rights

P.44

Human Resources

P.44

Diversity
Labor Practices

P.45
P.45

Occupational Health and Safety

P.46

Our Values

Supply Chain Management

P.47

The principles and values that guide us

Product Quality and Safety
Community Involvement and Development

P.48
P.50

External Director Interview
Corporate Governance

P.51
P.52

Compliance
Risk Management

P.57
P.58

Financial Data
Non-financial Data

P.60
P.62

Corporate Profile / Stock Information

P.63

NOK Group Sites

P.64

Shaping Possibilities with Unique Technology

RESPECTIGNITEEXPLORE

EXCEED

We respect diversity
and inclusivity

We ignite a passion
for innovation

We explore every
possibility for better
solutions

We exceed expectations
by delivering
exceptional results

We pursue our dreams

Our Founding Principles

Editorial Policy
This report is designed to facilitate stakeholders’ understanding of NOK’s initiatives for medium- to long-term value creation from both financial andnon-financial perspectives. We consider this report to be an important means of improving communication with you. Please also refer to the
ESG Data Book 2023, which presents more details and related information. We would appreciate your candid opinions and thoughts about thisreport and our initiatives.
• Period Covered
FY2022 (April 1, 2022, to March 31, 2023)* This report also includes some activities that predate the
Period Covered or that were conducted after it.

• Covered Organizations
NOK CORPORATION and 91 consolidated subsidiaries• Date of issue
November 2023

Implementing ESG Initiatives

NOK Philosophy

NOK Group’s Value Co-Creation

CHAPTERNOK Group Strategic Vision• Referenced Guidelines and Initiatives- International Integrated Reporting Framework- Guidance for Integrated Corporate Disclosure andCompany-Investor Dialogue for Collaborative Value Creation- ISO 26000: 2010 - Guidance on social responsibility- Global Reporting Initiative (GRI) Standards- United Nations Global Compact- Task Force on Climate-related Financial Disclosures

1 The Management has to run the Company based on feelings of care and trust in

its employees.
2 The Management has to run the Company while uniting to ensure full ventilation

without forming any cliques.
3 The Management has to run the Company while making absolutely incredible

efforts against all odds and risks.
4 The Management has to run the Company while pursuing dreams withmanagement plan.

Contact
Inquiry form
https://www.nok.co.jp/en/faq/

NOK CORPORATION Integrated Report 2023

Corporate Affairs Office, NOK CORPORATION
1-12-15 Shiba Daimon, Minato-ku,
Tokyo 105-8585, Japan
TEL: +81-3-5405-6372 FAX: +81-3-5405-6379

NOK CORPORATION Integrated Report 2023

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NOK Group’s Value Co-Creation

CHAPTERNOK Group Strategic Vision

Implementing ESG Initiatives

Data / Information

01

NOK Group’s
Value Co-Creation
Throughout our history, the NOK Group has been synonymous withdelivering a diverse range of products characterized by unwavering
quality and exceptional functionality, such as our advanced sealing
technology that gives rise to reliable oil seals. Our commitment tosociety’s well-being remains steadfast as we adapt to evolving times
and market demands. To achieve this ongoing commitment, we must
inspire our employees and the organization to venture into new
domains, embracing challenges and fostering innovation. Through therelentless advancement of our proprietary technologies and our
dedication to fostering a sustainable society, we persistently pursue
our aspiration of becoming a company that resonates with pride
among all our stakeholders.
CHAPTER 1 highlights how the NOK Group exemplifies a company
dedicated to generating social and economic value through aninterview with Representative Director, Chief Executive Officer
Masao Tsuru.

02

TOP MESSAGE

An organization where all can catalyze change duringa transformative era for the automotive industry

Top Message

P.02

Corporate History

P.08

Value Creation Process

P.10

Masao Tsuru

Management Capital

P.12

NOK Group’s Main Businesses and Products

P.14

Representative Director,
Chief Executive Officer

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Data / Information

TOP MESSAGE
Constructing a Foundation forTransformation People Can Be a Driving
Force for Business Change
NOK’s founding dates back to 1941, when it ventured into
industrial product manufacturing amidst the turmoil ofWorld War II. However, the post-war period marked apivotal juncture, prompting the company to explore new
avenues for business expansion. As the automobile
industry began to take center stage in Japan, NOK’slong-standing product, oil seals, assumed a crucial role asvital components in automobiles, effectively preventing oilleakage. NOK Group’s remarkable growth journey wasclosely intertwined with its substantial contributions to theburgeoning automobile sector’s development.
Over the next eight decades, the NOK Group has
harnessed its extensive and distinctive technologicalexpertise across a diverse spectrum, encompassing
automobiles, mobility solutions, and telecommunications.
NOK has played a pivotal role in enriching people’s everyday
lives and various industries by manufacturing essential
core products such as oil seals — where NOK stands as thepioneer in Japan — and flexible printed circuits (FPCs).
However, we currently find ourselves in a changing
environment characterized by growing uncertainty. One
notable shift is the increasing emphasis on decarbonization,
which is leading the automotive industry into a transformative phase where the primary energy sources aretransitioning from fossil fuels to electricity and hydrogen.
In light of this, the NOK Group faces mounting pressure toadjust and excel across all industry sectors. Historically,
our business has thrived on a foundation of trust with ourcustomers, primarily for our expertise in oil seals as thehallmark of NOK’s reputation. However, moving forward,
we must adapt to the evolving landscape by taking
innovative approaches and tackling new challenges inemerging fields.
As part of its Medium-Term Management Plancommencing in April 2023, the NOK Group’s mission is to“Construct a Foundation for Transformation.” Central to thistransformation is the role of NOK employees. In its history,
the NOK Group has weathered management crises. Yet, it
has consistently emerged from these challenging periods
while remaining steadfast in its commitment to one of its
founding principles: Management with respect for people.
This principle endures today. Our organization operates
numerous plants and facilities responsible for producing
valuable goods. However, the people within these facilities
drive their functionality and success. We firmly believe that
individuals have the potential to be a driving force forchange within our business.
I frequently encourage NOK employees to utilize thecompany to their advantage. We provide opportunities forthem to foster personal growth by actively engaging in
educational initiatives, interfacing with suppliers within the
NOK Group, and acquiring fresh knowledge. We believe thatthe first step toward change involves individuals developing
the capacity to think independently about nurturing theirown happiness instead of depending on external guidance
to dictate their choices.

had temporarily contracted due to the COVID-19 lockdown
in China and supply shortages of parts for semiconductors
and other products, there has been a gradual recovery.
Looking ahead to FY2023, the outlook remains uncertain.
Demand from the automotive industry is subdued, owing tosoaring raw material and energy costs and persistent
supply shortages of semiconductors and other components
in certain segments of the industry. The challenge ahead isthe further recovery of profitability in the electronic productbusiness, and we are actively implementing various
measures to address this.
Throughout our company’s history dating back to the1950s, we have operated under a framework of planning
management involving the formulation and execution of
medium- to long-term plans. However, as witnessed in theprevious fiscal year, external factors have the potential toimpact our business performance, and adhering strictly toa plan does not always yield outcomes aligned with our
expectations. The NOK Group’s stock price and PBR (pricebook value ratio) have yet to reach the desired levels.
Consequently, we are resolute in prioritizing tangible
results in FY2023.

FY2022 in review and reinforcing
Commitment Management

Aiming for one trillion yen in sales,
minimum 8% operating income margin
in FY2031

During FY2022, our consolidated net sales grew; however,
our income declined. When examining our businesssegments, the seal business recorded an uptick in revenue,
but a decrease in profit, primarily attributable to escalating
raw material and energy costs, which surpassed thepositive impact of price adjustments. In the electronic
products business, we reduced operating losses thanks toincreased sales, reduced labor expenses, and the influenceof foreign exchange rate fluctuations.
The overall business environment in FY2022 proved
challenging, with external factors impacting our businessperformance and stock price. Although economic activity

Aiming for sales of one trillion yen and operating income margin of 8% in FY2031, the 90th anniversary of the company’s founding
Jump
Step
Hop
2023–2025 Medium-termManagement Plan

2026–2028 Medium-termManagement Plan

Drive growth

Developing a Foundation forTransformation
Build new business pillars

Establish cycle
for implementing reforms

FY2025Net sales
845 billion yen
Operating income margin6.8%
FY2022
Net sales
710 billion yen
Operating income margin2.2%

2029–2031 Medium-termManagement Plan

Clarify new pillars

FY20231
Net sales
Over one trillion yen
Operating income margin
8% or more

Our target for FY2031 is to reach a milestone of one trillion
yen in net sales, accompanied by a minimum operating
income margin of 8%. This ambitious goal has been set as
we commemorate the 90th anniversary of our founding.
To attain these objectives, we have devised a strategic planthat unfolds in three distinct phases spanning the next nine
years. In the initial phase, covering the first three years of
our Medium-Term Management Plan from 2023 to 2025,
our primary aim is to elevate the profit margin of our sealbusiness to 10% by the end of this period.
IT plays an essential role in enhancing operational
efficiency. To begin with, we will drive the digital transformation of traditionally paper-based processes, such as
converting slips and production plans into digital formats.
Additionally, we will implement a system for managing Billof Materials (BOM) and Bill of Process (BOP) data toenhance data quality. We aim to establish more accurate

profitability management practices by providing real-timevisualization of fluctuating costs.
In the future, our strategic emphasis will be on marketing. Historically, NOK Group’s sales have been managed
by technically proficient sales professionals with deep
knowledge of our technology and products. While thismethod enabled us to provide meticulous services andactively address our customers’ challenges, it was a
relatively passive strategy. Going forward, we intend to
adopt a more assertive stance, proactively presenting
bold proposals to our customers and demonstrating ourcapabilities with statements such as, “We can also
provide this solution.”
To proactively engage with customers and offer
innovative development proposals, it is imperative that webolster our technology development infrastructure. In April
2023, we consolidated our technical divisions and rechristened the Fujisawa Plant as the Shonan R&D Center,dedicated to research and development. This transformation has created an optimal environment for our
researchers and engineers, enabling them to fully
immerse themselves in their work while harnessing our
extensive resources. With a unified technical department,
we can now present comprehensive solutions to ourcustomers, encompassing product development, design,and process design, all from a single integrated source.

Investment in growth drivers with a keen
eye on evolving market dynamics, striving
to expand market presence and bolster
profitability
To navigate the evolving landscape effectively, NOK
recognizes the importance of investing in growth-driving
businesses. As the global push to curb the production andsale of gasoline-powered vehicles gains momentum, it isanticipated that the demand for engine and transmission
components — NOK’s traditional core business — maywane. Conversely, the surge in electric vehicles (EVs)presents an expanding market, with a rising need for
FPCs integrated into battery monitoring systems.
The trend towards decarbonization is an o
­ pportunity,
as NOK Group’s products have the potential to mitigate

Four key initiatives to realize the Medium-Term Management Plan (FY2023–FY2025)
goal of Constructing a Foundation for Transformation
Create new growth
drivers

Optimize operational
structure for global
expansion• Develop and expand sales forfunction-specific EV products• Establish Audit & Supervisory
Committee• Develop and expand sales forgreen energy-related products• Strengthen diversity of Boardof Directors• Expand sales for semiconductor
equipment products• Expand and accelerate datautilization

Construct diverse
human capitalfoundation• Introduce new personnel system• Invest in human resource
development

Optimize management
resources• Secure orders at fair market
prices• Execute capital policy• Implement DE&I initiatives• Implement robust ESG initiatives

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Data / Information

TOP MESSAGE

environmental impact, enhance fuel efficiency, and offer
solutions to our customers’ challenges.
Previously, our electronic products business, primarily
centered around FPCs, faced financial challenges stemmingfrom focused investments in specific products and elevatedcosts. In FY2023, we are embarking on a journey to restore
profitability by reshaping our cost structure, notably bytransitioning to products with predictable, stable demand.
Our strategy involves periodic assessments of the businessenvironment every three years. Simultaneously, we aim togenerate cash from our established ventures, including
engines and transmissions, while directing investments into
emerging sectors like EVs. This adaptable approach aligns
with the evolving business landscape.
For more about NOK’s R&D Strategy, refer to page 24.

We live in an era of rapid change, and the future remains
uncertain. Although recent events like the COVID-19
pandemic and the situation in Ukraine were unforeseeable,
there is a sense of retrospection regarding potential earlierinterventions we could have made. Looking ahead, theability to skillfully address emerging risk scenarios will
gain greater significance. The NOK Group adheres to thefoundational principle of local production for local
consumption, strategically manufacturing and delivering
products in proximity to our customers via a global networkof facilities. In parallel, the exchange of equipment andmaterials essential for production occasionally occurs
among our Group companies across international borders.
In such instances, challenges within the supply chain canarise when transportation faces disruptions. Our proactive
procurement department has instituted policies to ensurethat any supply chain interrup­tions do not impede ourcustomers’ production processes. By mitigating risk for ourcustomers, we aim to cultivate enhanced trust in the NOKGroup, ultimately elevating our corporate value.

Shonan R&D Center

Enhance corporate value through pursuing
capital efficiency and generating profit
exceeding stock market expectations
In addition to implementing reforms on the operational
front, we are adopting a fresh capital policy for FY2023–25.
Historically, our approach leaned heavily toward the P/L(profit and loss statement), with a concerted effort toelevate sales, operating income, and net income andmaintain a steady dividend payout. In our Medium-Term
Management Plan commencing in FY2023, we are shifting
our emphasis toward capital efficiency, with ROIC (return on
invested capital), ROA (return on assets), capital adequacy
ratio, and ROE (return on equity) emerging as our primaryfinancial objectives. Our approach entails more than merely
attaining profitability; we are committed to elevating
corporate value by surpassing market expectations ingenerating profits that exceed stock market expectations
and judiciously returning these gains to shareholders
through suitable dividend channels.
ROIC is applied not only at the consolidated level but also
in optimizing earnings within specific business segments.
Its role extends beyond ensuring business continuity;
it enhances profitability through adaptable portfolio adjustments while evaluating future growth prospects.
Over the next three years, we anticipate an­approximately 160 billion yen investment in our­established business area and the promising sectors ofautomotive FPCs and emerging hydrogen-­related (green
energy) business. As we embark on portfolio restructuring,
we will thoroughly evaluate our investment targets.
For more on NOK’s Financial Strategy, refer to page 22.

Key financial objectives and investment plans of
the Medium-Term Management Plan
ROIC

ROA

6.5%

4.6%

Evolving governance structure andcultivating a unified global company culture
As times change, so must our corporate culture andenvironment. The NOK Group significantly emphasizes
diversity and has initiated our DE&I Project. We actively
advocate for the participation of women and are committed
to proactively recruiting individuals from diverse backgrounds. While the current representation remains modest,
our future plans include increasing the presence of womenand foreign nationals within our management ranks.
We envision growing diversity within our workforce will
give rise to a revitalized corporate culture.
For more on our Diversity, Equity, and Inclusion (DE&I) initiatives, refer to
HR Strategy on page 30.

The evolution of our governance structure is a vital
aspect of our preparation for transformation. We intend torefresh our Board of Directors as needed, actively seeking
individuals who align with our company’s mid-to-long-term
objectives and are connected to our business direction.
We acknowledge society’s call for diversity within our Boardof Directors and seek individuals from diverse backgrounds
who can genuinely contribute to NOK’s growth.
Looking at our organization from a global perspective,
the NOK Group has established a widespread presence
worldwide, necessitating an urgent reinforcement of ourorganizational capabilities under the banner of “Global One
NOK.” With nearly 40,000 employees on a consolidated
basis, our workforce is predominantly non-Japanese, with
only around 10,000 japanese employees. To enhance our
global organizational prowess, we have outlined Our
Purpose and Values as the guiding principles for all our
employees. We aim to disseminate these principles to every
member of our workforce, both in Japan and abroad.
While our overseas operations have traditionallycentered on catering to regional customer needs, our future

Inaugural Global Summit in July 2023

Consolidated
Capitaladequacy
ratio

57.6%
In April 2023, the Fujisawa Plant was rebranded as the “Shonan R&D
Center.” Simultaneously, the Technical Division, Cell Seal Development
Office, and Production Engineering Division within the Center were merged
and restructured into a unified entity named “NOK R&D.”

Investment

ROE

8.0%
Total approx. 160 billion yen
over three years

For more on NOK’s Financial Strategy, refer to page 22.

NOK held the Global Summit 2023 as part of our commitment to bolster theorganizational capabilities of “Global One NOK.” This event convened
approximately 500 participants, predominantly from management ranks,
hailing from different corners of the globe, with the primary aim of enhancing
their grasp of Our Purpose and Values.

trajectory will be guided by our employees’ collective
aspiration to pioneer new frontiers as part of the NOK Group,
driven by the recognition that we are a unified global entity.
To enhance the overall value of the NOK Group, ourrecruitment practices are evolving. Historically, the norm
was for individuals to enter employment, implying a commitment to a single company for the entirety of their careers.
In today’s landscape, a more common approach isjob-hunting, wherein individuals explore various career
opportunities, and we’ve observed cases of former employees
returning to the company. Our focus has expanded toencompass career recruitment across a broad spectrum ofroles, ranging from middle management to executive
positions. To support employee development post-hire,
we have crafted an education system that empowers
them to cultivate their skills and progress independently.
This framework features parallel programs that foster
leadership through volunteering and merit-based selection
processes and training tailored to specific job levels.
We aim to effectively convey our philosophy, ensuringthat people comprehend NOK’s objectives articulated
through our Purpose and Values. We strive for individuals
to resonate with our values and corporate culture, fosteringa sense of connection and a desire to be part of ourorganization.
For more on Our Purpose and Values, refer to page 1.

Until now, NOK may have been perceived as a traditional
manufacturer specializing in crucial functional components
for the automotive and electronics sectors. In an era where
established, large Japanese companies with outdated
practices are often labeled as “Japanese Traditional
Companies,” the NOK Group is committed to preserving thepositive aspects of its traditions while implementing
necessary changes. We aim to convey not only our quantitative achievements but also our unparalleled technologicalcapabilities, as well as the value and services we contributeto society. Through proactive communication with ourcustomers and the market, we aspire to raise awarenessabout the untapped potential and strengths of the NOKGroup that may not yet be familiar to our customers.
Together, we hope to invigorate the manufacturinglandscape in Japan.

For more on the Global Summit, refer to page 31.

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Data / Information

Corporate History
NOK celebrated its 80th anniversary on July 9, 2021.
Since its founding as the first oil seal manufacturer in Japan, the Company has expanded its business along withthe growth of the market and contributed to the development of motorization. Working closely with customers not
only in the automotive industry but also in a wide range of other industries, including electronics and industrial
machineries, and refining our technical capabilities, we have been a source of products that are useful to society.
As we approach our centenary in 2041, we will continue to strive to provide safety and comfort.

Net sales(Billions of yen)800

NOK Group’s History: Always Looking Ahead
and Continuing to Take on Challenges

700

Synztec Co. Ltd. established

600

2007
2023

Company name changed to
NOK CORPORATION

Technology organizations
integrated and reorganized
as NOK R&D

Unimatec Co., Ltd. established

500

2002

1985

400

NOK Klueber Co., Ltd. established
1976

Nippon Mektron Co., Ltd. establishedCompany name changed to
Nippon Oil Seal Industry Co., Ltd.
1951

Nippon Bearing ManufacturingCo., Ltd. founded
1941

300

1969

NOK-USA, Inc. (present-day NOK Inc.)
established

200

1968

Wuxi NOK-Freudenberg Oilseal
1995
Co., Ltd. established

Capital alliance with Freudenberg Fujisawa Plant(present-day Shonan R&D Center) established

100

Thai NOK Co., Ltd. established 1988

1960

0
1940

1960

1970

Development of motorization

1980

1990

Development of electronics

2000

2010

Progress of information technology

2020(Fiscal year)

Mobility evolution

Changes in the automobile market

Late 1960s

1970s

1997

2009

• Greater motorization• Shift to car electronics• Debut of mass-produced hybrid vehicles• Start of mass production of battery
electric vehicles (BEVs) in Japan

Changes in the electronics market

08

1960s

1980s

1980s

1990s

2007

2019

• Downsizing of audio cassettes andvideocassettes• Debut of notebook PCs• Electronization of cameras• Debut of mobile phones• Launch of the iPhone• Transition to 5G communication

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Data / Information

Value Creation Process
Based on the NOK Philosophy, the NOK Group aims to create economic value and social value through the creation ofvalue beneficial to society, acting autonomously and responsibly.

Input

Our BusinessOutcomeManagement Capital 

Business Activities Business Outcomes 

Human Capital• Number of employees:

37,913 (consolidated, FY2022)
Including 692 R&D personnel

Intellectual
property
management(major domestic Group companies, FY2022)• Sales share for Oil seals: Approx. 70% (in Japan)• Number of suppliers:• Shareholders’ equity: 411 billion yen

P.15
Evaluation
and analysis
technology

Production
technology

Approx. 3,000 (worldwide)
Financial CapitalBasicresearch

Seal BusinessOil seals, O-rings, etc.

Integration oftechnologies

Social and Relationship Capital

Input ofmanagement capital

Electronic Products Business
Flexible Printed Circuits (FPCs), etc.

Information, Inc. (R&I): A (FY2022)• Investment in growth drivers:

50 billion yen or more (FY2023–FY2025)
Intellectual Capital• Number of patents held: 4,349(NOK Group worldwide, as of March 2023)

Manufacturing Capital• Number of production companies worldwide: 58

P.16

NOK Vision: Dream Journey 2041 
Three dreams pursued by NOK
1. Evolution of all forms of mobility
2. Realization of carbon neutrality
3. Evolution of a digital society
Business fields addressed by NOK• Mobility • Digital • Wellness• Manufacturing

Other Business
Development rollers, Specialty
lubricants, etc.

P.17

Targets in the Medium-Term Management Plan
Net sales

OperatingincomeOperatingincome
ratio

ROIC

ROA

Shareholders’equity ratio

ROE

Fiscal year ended
March 2023

710 billion yen

15.4 billion yen

2.2%

1.9%

1.5%

60.6%

2.6%

Fiscal year ending
March 2026

845 billion yen

57.5 billion yen

6.8%

6.5%

4.6%

57.6%

8.0%

• Capital investment: 47.8 billion yen(consolidated, FY2022)

Our Purpose 

Natural Capital• Electricity consumption: 4,160 TJ(consolidated, FY2022)• Total water withdrawals: 8,666,000 m3(consolidated, FY2022)

Automobiles and next-generation vehicles,
trucks, construction machinery, production
machinery and equipment, industrial robots,
power generation plants, bullet trains, ships,
aircraft, agricultural machinery, housing
equipment, water purifiers, smartphones andtablets, PCs, HDDs, cameras, satellites,
drones, medical and healthcare devices,
office automation equipment

Producttechnology(consolidated, FY2022)• Rating by Rating and Investment

Major final products to whichNOK Group products are assembled

NOK Group’s products

Material
technology

Shaping Possibilities with
Unique Technology

Creating Value
Values Provided to Stakeholders

Customers• Developing and supplying highly
functional products that enhance thesafety and comfort of our customers’
products• Cultivating trust by establishing astable supply system without delay inany market conditions

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NOK CORPORATION Integrated Report 2023

Suppliers• Trust and mutual prosperity built
through fair and responsible
transactions

Shareholders and investors

Employees• Appropriate shareholder returns
that meet the expectations ofshareholders and investors• Providing a working environment inwhich diverse human resources canexperience job satisfaction• Evolution from plan-based
management to commitment-based
management• Providing opportunities for every
employee to develop his or her abilities• Providing an environment in which
researchers and engineers can focus
and pursue their research themes

Local communities

Global environment• Creating stable employment in regions
where our facilities, such as production
plants and research facilities, arelocated and contributing to local
communities (We have a track record ofbuilding plants in locations to which itis easy for employees to commute.)• Contributing to realization of a carbon
neutral society by creating productsthat contribute to improvement ofenergy conversion rates• Realization of environmentally friendly
plant equipments

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Data / Information

Management Capital
The NOK Group leverages its proprietary technologies to deliver safety and comfort. Our six capitals are thefoundation for creating valuable and exceptionally dependable products for our customers. Our commitment
extends to pursuing ongoing business expansion while strategically allocating capital to foster growth in key areas.

Human capital
Number of employees

37,913 (FY2022)
Non-consolidated: 3,419 (FY2022)
Including 692 R&D personnel
Consolidated(major domestic Group companies,
FY2022)Social and
Relationship capital
Sales share for Oil seals
Approx.

70% (in Japan)

Number of suppliers
Approx.

3,000 (worldwide)

Job satisfaction and growth for employees based on the founding principleof Management with Respect for Employees
Guided by the founding principle of “Management that operates with a foundationof care and trust for its employees,” the NOK Group is dedicated to cultivating awork environment where our workforce can experience job satisfaction andpersonal growth. This commitment is deeply rooted in our Basic Philosophy and
HR Development Vision. To realize this vision, we are actively enhancing the skillsof our employees through tailored training programs based on job levels andspecialized educational initiatives.
Our robust development capabilities are one of the NOK Group’s distinctive
strengths. We possess a unique ability to leverage the collective expertise of
researchers in chemistry and physics to craft innovative products utilizing materials
like rubber, resins, and metals, setting us apart from many other companies.

Leveraging intellectual property for strengthening competitivenessIntellectual capital
Number of patents held

4,349
(NOK Group worldwide, as of March 2023)

Number of registered formulations
Approx.

88,000 formulations

Shareholders’ equity

411 billion yen (consolidated, FY2022)
RatingRating and Investment Information, Inc. (R&I):

A (FY2022)
Investment in growth drivers

50 billion yen or more (FY2023–FY2025)

For more on NOK’s R&D Strategy, refer to page 24.

For more on NOK’s HR Strategy, refer to page 30.

Continue to Pursue Dreams in Management with a strong emphasis on
stakeholder engagement
The NOK Group’s Charter of Corporate Behavior underscores our dedication to
becoming a driving force for realizing a sustainable society, stating, “We should
maintain sight of our objective to be a source of prosperity and pride for all
stakeholders and enable an environment where we can collectively pursue ourshared dreams.” Our commitment to enhancing product quality, coupled with astrong emphasis on engaging with stakeholders to advance our business,has garnered commendation from our customers. This approach has further
contributed to our significant market share in oil seal products.

Manufacturing
Capital
Number of production companies
worldwide

58
Capital investment

47.8 billion yen (consolidated, FY2022)
Create high-value businesses by strategically allocating resources

Financial capitalIntellectual capital is the driving force behind innovation within the NOK Group.
Our strength lies in developing and formulating technologies for various products
such as rubber, resin, adhesives, lubricants, and coatings. In particular, the numberof registered formulations for rubber, essentially our “formulations,” has reached
88,000. This enables us to create rubber, resin, adhesives, and coatings tailored to
specific purposes and applications. At the NOK Group, we are dedicated toprotecting and managing this intellectual property while focusing on maintaining
and enhancing our competitiveness.
At the Shonan R&D Center in Kanagawa Prefecture, numerous researchers andtechnical experts collaborate, advancing our research and development efforts ona daily basis.

In FY2022’s consolidated financial results, net sales increased by 4.0% from theprevious year, reaching 710 billion yen. However, operating income declined by
50.9%, totaling 15.4 billion yen, primarily due to the steep rise in raw material andenergy prices. Despite the uncertain business landscape, we remain committed toour high-value business, bolstering our R&D efforts and venturing into new
business prospects to ensure continued profitability.
For more on NOK’s Financial Strategy, refer to page 22.

Natural capital
Electricity consumption
4,581 TJ (consolidated, FY2021)

4,160 TJ (consolidated, FY2022)
Year-on-year decrease: 9.2%

Total water withdrawals
9,187,000 m3 (consolidated, FY2021)

Ensuring stable supply of high-quality products at domestic andinternational production bases
Commencing with the inauguration of the Fujisawa Plant in Kanagawa Prefecture
in 1960, we have progressively expanded our manufacturing facilities in Japan andoverseas, establishing a robust system dedicated to ensuring a consistent supplyof premium-quality products. Our capabilities extend to designing our production
facilities, tailored to accommodate a diverse range of product manufacturing,
including rubber, resins, adhesives, and coatings.
Having achieved a solid global track record and reinforced our position as acomprehensive parts manufacturer, we strategically utilize our manufacturingbases to explore new avenues for added value in growth sectors such as EVs.
For more on NOK’s R&D Strategy, refer to page 24.

Aligning with our long-term environmental vision: The NOK Twin Green Plan
2030 for environmental impact reduction
In line with our long-term environmental vision, the NOK Twin Green Plan 2030*,
the NOK Group remains committed to conducting business operations while
upholding its environmental responsibilities. Formulated in 2018, this visionary
plan has set a clear objective: achieving carbon neutrality by 2050. Our dedicatedefforts focus on reducing CO2 emissions throughout the entire product lifecycle.
Beyond carbon reduction, the plan actively promotes resource conservation,
waste reduction, water usage minimization, and sustainable wastewater
management.
The NOK Twin Green Plan 2030 underwent revisions in the FY2022 to further
enhance its impact.
For more on NOK and the Environment, refer to page 38.

8,666,000 m

3(consolidated, FY2022)
Year-on-year decrease: 5.7%

12

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13

NOK Group’s Value Co-Creation

NOK Group’s Main Businesses and Products

NOK Group Strategic Vision

Implementing ESG Initiatives

Data / Information

NOK Group’s Main Businesses and Products

Seal Business

The NOK Group is a comprehensive manufacturer of parts essential for products and services that underpin society
and enrich everyday life. Our business operations comprise the Seal Business, Electronic Products Business, andOther Business, and our products are used in diverse fields, including the automotive sector. The Seal Business,
mainly operated by NOK, manufactures and sells seal products and other products for automobiles, construction
machinery, and general industrial equipment. The Electronic Products Business, mainly operated by NIPPONMEKTRON, manufactures and sells electronic components and other products. Other Business, mainly operated by
NOK, SYNZTEC, and NOK KLUEBER, manufactures and sells rollers, special lubricants, and other products.

Seals are indispensable for a wide range of machinery, including automobiles,
construction machinery, general industrial equipment, and home appliances.
NOK’s numerous lines of seal products, including oil seals, offer high reliability
underpinned by extensive research into the materials used and mechanical design.

NIPPON MEKTRON, LTD.

UNIMATEC CO., LTD.

Flexible printed circuits (FPCs)NOK CORPORATION

Synthetic rubbers, Industrialorganic chemicals

Oil seals

Oil seals, O-rings

SYNZTEC CO., LTD.

NOK KLUEBER CO., LTD.

Rollers for office automationequipment

Special lubricants

347.1 billion yen
Operating income: 17.9 billion yen
Net sales:

Other Business

4.0%

Electronic
Products
Business

47.1%

FY2022
Net sales

Seal Business

710

48.9%

billion yen

Other BusinessNet sales:

28.4 billion yen
1.2 billion yen

Sales increased reflecting a recovery in demand related to officeequipment as well as the positive effect of foreign exchange rate
movements, despite a decline in demand for special lubricants inconjunction with decreased demand for automobiles. As a result,net sales were 28.4 billion yen (up 11.8% year on year); operating
income was 1.2 billion yen (up 34.3% year on year).

NOK CORPORATION Integrated Report 2023

Sales for automobile applications increased as a result of foreignexchange rate movements as well as passing on soaring raw
material prices and energy prices to selling prices, despite thenegative effect of lockdown in China and the supply shortageof semiconductors and other components. Looking at demand
for general industrial machinery applications, demand frommanufacturers of machine tools in Japan remained firm.
However, overall, excluding the impact of foreign exchange rates
and the impact of selling price transfers, real net sales decreased.
As a result, net sales stood at 347.1 billion yen (up 3.2% year onyear). Operating income amounted to 17.9 billion yen (down 49.6%
year on year).

Electronic Products Business

Operating income:14

Oil seals are functional parts used toseal oil. Composed of synthetic
rubber, metal rings, and springs, they
prevent oil from leaking from gaps inmachine shafts. They also prevent theentry of dust from the outside.

Seal Business

Sales Composition by Segment

Net sales:

O-rings

Main applications

Main applications

Automobiles, construction machinery, agricultural machinery, railroad
vehicles, steel mills, industrial robots, aircraft, marine vessels, officeautomation equipment, home electronic appliances, etc.

Automobiles, construction machinery, agricultural machinery, piping joints,
water-resistant cell phones, etc.

Industrial rubber products

Rubber vibration/sound isolators

These are functional parts forindustrial use made of synthetic
rubber, such as dust covers, boots,
and diaphragms. We provide a wide
range of products, including rubber
products, as well as rubber-lined
metal and resin products.

A wide variety of vibration/sound­isolators are available, including
torsional vibration dampers to
reduce crankshaft vibration in­automobile engines, and center-­bearing supports to absorb and­isolate vibration by supporting thepropeller shafts of rear-wheel andfour-wheel drive vehicles such as
passenger cars and trucks.

Main applications

Main applications

Automobile suspension and steering, housing equipment, etc.

Crankshafts of automobile engines, drive shafts of rear-wheel andfour-wheel drive cars, etc.

Iron Rubber (polyurethane elastomer) products

NOXTITE

Iron Rubber (polyurethane elastomer),an intermediate product between
rubber and plastic, demonstrates
excellent performance in resistingabrasion and absorbing shock/vibration. We provide a wide range of
products, including packing forreciprocating parts of equipment
and traffic signs & safety devices
that require superior durability.

334.5 billion yen
3.7 billion yen

Operating loss:

Demand for automobile applications increased despite thenegative impact of lockdown in China, the Russia-Ukraine conflict,and the supply shortages of semiconductors and other components. Demand for smartphones decreased due to the impact of
new lockdowns in some Chinese cities. And demand for HDDs also
decreased. Although sales volumes rose, real net sales decreasedon the back of the significant effect of foreign exchange rate
movements. As a result, net sales were 334.5 billion yen (up 4.2%
year on year). Operating loss came to 3.7 billion yen (compared toan operating loss of 5.0 billion yen in the same period of theprevious fiscal year).

O-rings are O-shaped rubber ringgaskets. They are moderately
compressed by fitting into grooves ofmachinery, and prevent leakage ofvarious fluids, including oil, water, air,and other gases.

The NOXTITE acrylic elastomer has anumber of well-balanced functions,
including oil resistance, heat
resistance, high strength, andresistance to permanent compression
set. In addition to use as a material
for oil seals and O-rings, it is used indevices that require heat resistanceand oil resistance, such as thoseadjacent to automobile engines.

Main applications

Main applications

Construction machinery, automobiles, semiconductor manufacturing
equipment, food manufacturing machinery, traffic signs & safety devices, etc.

Special rubber materials

NOK CORPORATION Integrated Report 2023

15

NOK Group’s Value Co-Creation

NOK Group’s Main Businesses and Products

Other Business manufactures and sells high-performance rollers for office automation(FPCs), which are used in information and precision equipment, and precision rubber

equipment, and special lubricants. Rollers are widely used in office automation equip-

and plastic components, which are products endowed with additional waterproofing

ment such as copiers and printers. Special lubricants, which include oils, coatings,

functionality and an anti-shock mechanism (protection) by molding rubber or resin togreases, etc., can withstand harsh operating conditions such as extreme temperatures,

FPCs. Our electronic products are used in digital devices such as mobile terminals, PCs,

high speeds, and high loads. They are used mainly in automobiles, industrial machinery,and cameras, for which miniaturization is required. In recent years, they have increas-home appliances, and food processing machinery.

ingly been adopted for automotive applications.

Double-sided FPCs
FPCs with circuits on one side are
structured to best exhibit their thinand flexible characteristics. They are
durable against repetitive bending
and can be mounted on moving parts
while taking up little space. They arealso suitable for multi-dimensional
wiring in narrow gaps.

Development rollers and charge rollers
These have circuits on both sides.
Compared to single-sided FPCs, they
allow more complex wiring, andcontribute to downsizing and weight
reduction through the mounting ofparts on both sides. They can also be
used for various designs because
they are freely bendable.

Main applications

Main applications

Automobiles, HDDs, digital cameras, media players, game consoles, medical
and healthcare devices, etc.

Smartphones, digital cameras, automobiles, medical and healthcare
devices, etc.

Fixing belts and pressure rollers

The developing roller feeds a
specified quantity of toner to thephotoreceptor, and the charging
roller applies a certain charge to thephotoreceptor. The electric conductivity of these products is controlledwith high precision.

Fixing belts are made by combining
metal and rubber, with high heat
conductivity and pyrogenicity. Pressurerollers are used to provide evenly
distributed pressure when fixing toner.
Stable fixing outcomes are maintained
for a long time.

Main applications

Main applications

Area surrounding office machinery photoreceptors

Fixing parts of office automation equipment

Oils

Coatings
Our high-performance oils provide
outstanding lubricating performance,heat resistance, and oxidation
resistance, leading to longer machine
operating life and improved efficiency.
NOK KLUEBER provides products
suitable for various fields, including forlarge plants, precision machinery, foodprocessing machinery, and semiconductor manufacturing equipment.

Component assembly FPCs
These FPCs have realized higher
functionality, smaller size, and lighter
weight through multi-layered circuits.
Integrated boards and cables
contribute to downsizing, as theyrequire no connectors.

FPCs are very thin films and therefore
require a special mounting process.
Nippon Mektron not only manufactures
FPCs, but also fulfills requests for
FPC module units by mounting
semiconductors, microchip components, and connectors on them.

Our coating products offer beneficial
effects such as excellent lubrication
performance, resistance to wear,
non-adhesiveness, and insulation
performance, through their application
to the surface of metal parts, including
in environments where grease and oil
cannot be used. They are employed invarious fields such as automobiles,
home electric appliances, and officeautomation equipment.

Main applications

Main applications

Main applications

Main applications

Smartphones, digital cameras, automobiles, medical and healthcare
devices, etc.

Smartphones, HDDs, digital cameras, automobiles, medical and healthcare
devices, etc.

Large plants, precision machinery, food processing machinery,­semiconductor manufacturing equipment, etc.

Automobiles, household appliances, office automation equipment, etc.

Precision rubber and plastic components

Greases
Our grease features high reliability
and long operating life even in severe
environments such as extremes intemperature, high-speed machinery,
and high-load applications. It is usedin various fields such as automobiles,
industrial machinery, household
appliances, office machinery, foodmachinery, and semiconductor
manufacturing equipment.

These products are sealing parts thatprevent the entry of water and dust by
fitting them inside HDDs andsmartphones or on the exterior.
Utilizing the technologies fostered indevelopment and manufacturing
processes, Mektron also offers
products with additional waterproofing
functionality and an anti-shockmechanism (protection) by molding
rubber or resin to FPCs.

16

Data / Information

Other Business

The Electronic Products Business manufactures and sells flexible printed circuits

Multi-layer FPCs

Implementing ESG Initiatives

NOK Group’s Main Businesses and ProductsElectronic Products Business

Single-sided FPCsNOK Group Strategic Vision

Main applications

Main applications

HDDs, smartphones, automobiles, etc.

Automobiles, industrial machinery, household appliances, office automationequipment, food processing machinery, semiconductor manufacturing
equipment, etc.

NOK CORPORATION Integrated Report 2023

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NOK Group’s Value Co-Creation

CHAPTERNOK Group Strategic Vision

Implementing ESG Initiatives

Data / Information

02

NOK Group Strategic Vision
The NOK Group is navigating a rapidly changing medium- tolong-term landscape marked by the swift evolution of technologies
like EVs and stringent environmental regulations. In response,
we have crafted a three-year Medium-Term Management Plan
spanning from FY2023 to FY2025. We aim to establish a robust
business foundation, facilitating sustainable growth and enhanced
corporate value in the medium to long term while undergoinga transformative journey. Guided by the overarching principle ofDeveloping a Foundation for Transformation, this plan centers onfour key initiatives. These include the creation of new growth drivers
to foster the Group’s global expansion.

18

Long-Term Vision and Management Plan

P.20

Financial Strategy

P.22

R&D Strategy

P.24

Special Feature: NOK Group’s “Exceeding Expectations with
Extraordinary Efforts” in Manufacturing Technology

P.26

HR Strategy

P.30

Promotion of Sustainability Management

P.32

Information Disclosure Based on TCFD Recommendations

P.34

NOK CORPORATION Integrated Report 2023

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NOK Group Strategic Vision

NOK Group’s Value Co-Creation

Implementing ESG Initiatives

Data / Information

Long-Term Vision and Management Plan

Long-Term Vision: Dream Journey 2041
NOK created its long-term vision, “Dream Journey 2041,”
in honor of the company’s 80th anniversary in 2022. The
vision is a goal for the NOK Group to strive for as the company
approaches its 100th anniversary and one that aligns with
NOK’s inherent strategy of Pursuing Dreams in Management.

The three dreams we are pursuing are Evolution of all
Mobility, Achievement of Carbon Neutrality, and Advancementof Digital Society. Additionally, we have identified fourbusiness drivers necessary for realizing these aspirations.

Key objectives of the Medium-Term Management Plan for FY2023-FY2025
Financial targets

CFO discusses financial strategy (Pg. 22–23)

Consolidated net sales

Consolidated operating income/margin(Billion yen)

748

710

(Billion yen)

845

804

6.8%
5.5%

57.5

44.3

3.5%
26.2

2.2%
15.4

FY2022

FY2023

FY2024FY2025

FY2022

FY2023Results Medium-Term Management Plan | Target

Results

Medium-Term Management Plan | Target

Three-year CAGR 6.0%

Create new growth drivers

3 dreams
we are pursuing
Achievement of Carbon Neutrality
Evolution of all Mobility

Three-Year Medium-Term Management Plan and Long-Term Management Plan for 2041

New Areas

initial phase of the Long-Term Management Plan, strategically working backward from the envisioned Dream
Journey 2041 to chart the path toward its realization.

2023

2026

2031

2041

Dream Journey 2041
Long-Term Management Plan (FY2023–FY2031)
Long-Term Plan or more about the concept behind the Long-Term Management Plan,F
please refer to Top Message on page 4.

Medium-Term Management Plan
(Every three years, starting from FY2023)

Medium-Term Plan Medium-Term Plan Medium-Term Plan

• FY2023–FY2025 are categorized as “Hop,” FY2026-FY2028 as “Step,” andFY2029-FY2031 as “Jump.”• Quantitative targets that lead to the Long-Term Plan have been established.

20

Construct diverse humancapital foundation

Optimize management
resources

Establish Audit & Supervisory Committee

Introduce new personnel system

Secure orders at fair market prices

Strengthen diversity of Board of Directors

Invest in human resource development

Execute capital policy

 evelop and expand sales for greenDenergy-related products

Expand and accelerate data utilization

Implement DE&I initiatives

NOK CORPORATION Integrated Report 2023

Investment in
new growth
driversOver

50 billion yen

Earnings potential

Foundation Areas
General industry machinery/mobility sharing/ICE/HD/
high-performance office equipment (MFP, POD)

Ensure revenue through expanded sales and securityof orders at fair market prices

HR executive discusses HR strategy (Pg. 30–31)

Creating new corporate value occurs when a diverse range of employees harness their abilities and unique traits to theirfullest potential. We will undertake a range of initiatives aimed at establishing the groundwork that enables every
employee to actively contribute and excel.

Construct a diverse human capital foundation

 evelop and expand sales forDfunction-specific EV products

 xpand sales for semiconductorEequipment products

Smartphone & printerEV & semiconductor equipment

Generate revenue primarily through expanded salesof EV-related products

A foundation for human resource empowerment

FY23–FY25 FY26–FY28 FY29–31

Optimize operational structure
for global expansion

Improvement Areas

Growth Areas

Long-Term Plan

Four key initiatives to realize the Medium-Term Management Plan (FY2023–FY2025)
Create new growth drivers

Green energy

Cultivate into a growth business

Ensure return to stable profitability

Dream Journey
Quantitative targets have been set as milestones for 2031,
including sales and operating profit.

Three-year CAGR 55.1%

CTO discusses R&D strategy (Pg. 24–25)

Alignment with Our Purpose and market
growth potential

2021

FY2025

Over the next three years, starting from FY2023, we are committed to investing 160 billion yen across four key initiatives.
Out of this total, over 50 billion yen will be directed towards expanding Electric Vehicle (EV) related products, semiconductor
equipment, and our venture into the emerging field of green energy. Our approach to EVs will primarily involve thedevelopment of innovative products. In green energy, we will leverage our existing product portfolio, renowned for its
high technological expertise and quality honed through ventures such as fuel cell development, to establish
a strong foothold and nurture it as a burgeoning sector.

Advancement of a Digital Society

NOK has a history of crafting and executing comprehensive
management plans since the 1950s. The inception of theMedium-Term Management Plan in FY2023 marked the

FY2024For consolidated net sales,
we are targeting a three-year
CAGR of 6.0%, with a target of
845 billion yen for FY2025.
For operating income, we aretargeting a three-year CAGR of
55.1% and operating income of
57.5 billion yen for FY2025.

• Introduce new personnel system (from FY2024)• Introduce new next-generation development program (from FY2023)

HR revitalization in accordancewith Our Values
From an “International Company”
to a “Global Company”• Implement new DE&I initiatives (from FY2022)

Implement robust ESG initiatives

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NOK Group Strategic Vision

NOK Group’s Value Co-Creation

Implementing ESG Initiatives

Data / Information

Financial Strategy

Three-year cash allocation as indicated in the Medium-Term Management Plan (FY2023–2025)

FINANCIAL STRATEGY

Investing 50 Billion Yen in New Growth Drivers
A CFO’s New Financial Approach for NOK

1. Security

Maintain capital adequacy ratio of 55% to 58% in order to achieve stable business operations

2. Cross-shareholdings

Sell 25% of market capitalization over 3-year period

3. Return to shareholders Minimum of 67.5 billion yen over a 3-year period
Director, Executive Operating Officer,
Chief Financial Officer

220.4(Billion yen)

Akira Watanabe

Prioritizing enhanced capital efficiency and risk analysisa

As the CFO of NOK, I manage the end-to-end process,encompassing capital strategy planning through execution,
while always remaining committed to enhancing ourcorporate value. In recent years, I’ve focused on enhancing
capital efficiency, taking a holistic approach that considers
both profit and loss and balance sheet aspects whileremaining mindful of capital costs. Another key part of myrole is to assess risks from short-term, medium-term, andlong-term viewpoints in light of the volatile shifts in theexternal landscape and communicate strategic choices tothe executive team. Our continuous endeavor is to upholdfinancial stability, ensuring our readiness to address any
potential risks that may arise.
Historically, the NOK Group’s approach prioritized
enduring customer relationships over profit generation
when navigating escalating costs. However, external

factors like the recent surge in raw material expenses
prompted a shift. In FY2022, the Group witnessed an uptick
in revenue accompanied by a decrease in profits. Despite
our best corporate efforts, there are limits, so we’ve been
engaging in ongoing consultations with our customers for
multiple years to address price and cost adjustments.
Furthermore, over the past several years, the automotive
sector, closely intertwined with our operations, has been
experiencing a monumental transformation characterized
as a once-in-a-century occurrence. With the increasing
prevalence of electric vehicles (EVs), the demand forengine oil seals is projected to diminish, underscoring thenecessity of revamping our business, product, and market
strategies. As CFO, I recognize that the moment has arrived
for a new financial approach for the NOK Group.

24.0

18.0

123.5
–14.7

–67.5

FY2022

Operatingcash flow

Capitalinvestment

Shareholder
returns

In our seal and electronic products businesses, wehave computed ROIC on a per-business basis, focusing on
portfolio management. We acknowledge that incorporating
business-specific ROIC alongside the consolidated ROIC
represents a significant milestone in our ongoing efforts tobolster our Group’s profitability in the future.
Within our Medium-Term Management Plan, we

AssetdivestureLoanspayableOther

FY2025maintain a vigilant assessment of the practicality of ourbusiness strategy. Our projected operating income
incorporates anticipated revenue from new businessventures and investments planned for the upcoming
period. Of course, there are inherent risks, so weremain vigilant and prepared to take swift action if andwhen necessary.

Investing 50 billion yen in new growth drivers

Implemented ROIC, ROA, and ROE as key metrics in our Medium-Term Management Plan
To bolster our earnings potential, we’ve recognized thesignificance of utilizing ROIC (return on invested capital),
ROA (return on assets), and ROE (return on equity) as key
metrics for gauging capital efficiency and considering capitalcosts. Starting in April 2023, we have incorporated these
metrics into our Medium-Term Management Plan. We aim–161.4104.7

to reach the specified targets in our plan: “ROIC 6.5%,”“ROA 4.6%,” “Capital adequacy ratio 57.6%,” and “ROE
8.0%.” While achieving these targets according to our
Medium-Term Plan may be challenging, we will do ourbest to make a positive EVA spread through heightened
situational awareness.

Advancing profit-oriented management with sound financial strategies
ROIC

ROA

Capital adequacy ratio

ROE

6.5%

4.6%

57.6%

8.0%

Regrettably, our performance over the three years,
encompassing FY2020 to FY2022, fell short of expectations.
We acknowledge that our ability to adapt to significant
external shifts, including the impact of the COVID-19
pandemic and surging raw material costs, could havebeen better. Consequently, we faced challenges in making
swift decisions, such as transitioning from fixed to variable
costs, and we are conscious that this as an area for
improvement moving forward.
Conversely, as part of our transition toward the next
phase of growth, we have outlined plans for a comprehensive investment of approximately 160 billion yen spanningfrom FY2023 to FY2025. Notably, over 50 billion yen of thisbudget will be allocated to nurture new growth initiatives.
These growth prospects predominantly revolve around green

energy, electric vehicle technologies, and semiconductor
equipment sectors. The outcomes of these investments are
anticipated to manifest from 2026 onwards.
Furthermore, various endeavors are underway toextensively reshape our entire Group. In our commitment
to human capital management, we are actively crafting
Our Purpose and Our Values while concurrently instituting
substantial modifications to our personnel framework. We
have incorporated external perspectives and insights into
Our Values by soliciting input from individuals outside theorganization. Additionally, we are channeling investments
into recruiting and developing exceptionally skilled
professionals to drive our digital transformation
efforts forward.

Meeting commitments to our investors• Secure orders at fair market prices• Expand sales of products for EV applications* Figures are consolidated data

22

NOK CORPORATION Integrated Report 2023

• Implement shareholder returns with a minimumof 67.5 billion yen

Our shareholder base comprises individuals with diverse
investment strategies and motivations for holding ourcompany’s shares. To enhance the medium to long-term
corporate value of NOK group, we place significant
importance on listening to shareholder perspectives, andI personally derive great enjoyment and meaning fromengaging in these discussions. Over the upcoming three
years, starting from FY2023, we will allocate profits toshareholders through dividends and share buyback, andwe are dedicated to divesting policy shareholdings. I will
persist in fulfilling my responsibilities by maintaining an
open dialogue with investors.
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NOK Group’s Value Co-Creation

NOK Group Strategic Vision

Implementing ESG Initiatives

Data / Information

R&D Strategy

R&D STRATEGYThe R&D Division is Driving Intra-Group Collaboration
Challenging the Lead in Sales Expansion, Business Diversification,
and Efficiency Enhancement
Senior Operating Officer, Chief Technology Officer,
Head of NOK R&D

Yuki Satosales by introducing innovative products and nurturinguntapped markets. The collaborative work by our R&D
and sales divisions is of notable importance, with their
particular emphasis on EVs in the core automotive sector
and hydrogen in the green energy areas.

Shifting business areas by redefining our technology and business to develop new markets
We are directing our attention towards burgeoning markets
that arise in response to evolving societal trends. The growing
demand for environmentally sustainable hydrogen
infrastructure presents exciting opportunities, and we are
actively investing in this sector. In pursuing new market
development, we are embracing a “shift” paradigm within
our R&D endeavors. This entails a reevaluation of ourestablished spheres, pivoting our focus. We will delve
deeper into the technologies and operational assets
within the Group’s scope, adopting a fresh perspective toreinvigorate them as novel initiatives.

One of our ongoing projects entails the development of cell
seals for water electrolysis equipment, leveraging our existing
technologies. As we prepare for a significant increase in
future orders, we are also actively working on enhancing
our molding and design technologies. Furthermore, we arededicated to advancing the materials used in EV components.
During the development process, we remain committed toclosely addressing EV-specific challenges and requirements,
including electrical and heat conductivity and high-speed
forward and reverse rotation.

Reviewing processes and eliminating the need for molds can contribute to reducing environmental impact
In line with the revolution in product development, we feelthe need to drastically reform our production processes
over the medium to long term. Our group has been good atmass production, but we will need to respond to small-lot
production to meet customer needs in the future. Therefore,
we have launched a project to build a line that can handle
small-lot production and aim to have it up and runningwithin 10 years.
Additionally, we are reevaluating the processes for the
products we have been manufacturing up to this point. By
reassessing our production lines, we can potentially reducethe manufacturing process of oil seals by half. And with 3D
printers, storing molds becomes unnecessary, allowing us

to cater to small batches; for example, we could handle acustomer request for just five pieces. In such a scenario,changing our approach, starting from product design, will
be imperative. We are now initiating a movement to gather
knowledge in design, manufacturing, and production
technology and are also considering the materials we use.
This marks the beginning of reevaluating our previous
methods and ways of thinking.
The transformation is also driven by the societal importance of producing eco-friendly items and minimizing waste.
For instance, drilling holes to fasten parts rather than using
adhesives makes it easier to gather recyclable materials.

Enhancing cross-team collaboration to adapt quickly to customer requirements and promote a shift in
employee mindsets
Historically, NOK has followed each business unit approachto product development. However, in line with our ongoing24

NOK CORPORATION Integrated Report 2023

encouraged and rallied.
When discussing expanding our sales efforts, we often
focus on products, adhering to a philosophy that revolves
around creating “physical items” for sale. We believe there’s
a need to modernize our existing catalogs by digitizing
them, making them more accessible for reading, andfacilitating updates to product listings. Simultaneously,
we emphasize the value our products offer customers andpromote a more “conceptual” approach to sales. We are
actively exploring various avenues for marketing reform togain fresh insights and perspectives.

Optimizing efficiency through the integration of technical departments and visualization of engineers’ activities

The R&D Division’s three-year strategy embraces challenges with a shared goal of sales growth
The R&D Division has initiated a three-year plan slated forcompletion in 2025. Within this timeframe, we will pinpoint
areas necessitating transformation and champion a rangeof strategic initiatives, with the primary objective being
expanding our sales. Our overarching aim is to bolster

demands at the component level.
For example, the Oil Seal Division, one of our primarybusiness units, currently manages established products for
powertrains, such as engines and transmissions. In the
future, the Oil Seal Division will need to develop innovative
products not currently featured in the NOK product lineup,emphasizing the importance of adaptability. To create new
products in response to customer demands, it is essential
to adjust the organization’s structure and processes andtransform employee mindsets. Recognizing the imperative
for change, the business unit leaders and employees
across our technical and sales teams nationwide are beingtransformation, we recognize the need to establish asystem that empowers us to address unique customer

In addition to our initiatives geared towards expanding
sales, we are placing particular emphasis on consolidating
our engineering departments. In April 2023, we rebranded
our Fujisawa Plant as the “Shonan R&D Center” and merged
our development and production engineering units into a
unified entity named “NOK R&D.” Within this consolidated
organization, we will establish specialized teams forresearch, process development, prototyping, and mass
production. While preserving the traditional functions ofbusiness divisions, projects, and development activities will
be carried out collaboratively across the entire organization, fostering a cross-functional approach. We believe thatcompanies should be able to institute significant changes
as needed.
While FY2023 to FY2025, we have focused on DX efforts
to enhance the efficiency of our R&D processes andoptimize human resource management by aligning withindividual aptitudes and skills. In practical terms, thisentails empowering each employee engaged in engineeringand sales roles to record data on who they worked for,their tasks, and the duration of their efforts. We are actively
exploring methods to gather this data efficiently, linking itto productivity enhancements and other strategic measures.
We acknowledge that managers have demanding schedules,
making it challenging to monitor our technical staff’s
diverse contributions comprehensively. By “visualizing” ourengineers’ career trajectories and development focuses,
we gain greater clarity on their key areas of concentrationand potential areas for improvement. This visibility into
their ongoing projects also provides valuable insights into
individual skill sets, facilitating collaboration on novel
developments. For sales personnel, this system simplifies
understanding the utilization of technology, enabling themto comprehend requests and effectively communicate
feasible solutions. Furthermore, it streamlines scheduling,which is particularly beneficial for our busy engineers.

As the CTO, my role involves bridging the gap between engineers and management and proactively identifying
potential risks
To be candid, our research and development expenditures
may be relatively conservative compared to global standards.
This is attributed to our historical approach of investingexclusively in business deemed highly likely to succeed.
Our investments are typically made once we have secured
customer orders and clearly understand the necessary
equipment and personnel. In an era characterized bymarket expansion without substantial proactive efforts,such a cautious strategy proved successful, leading to thecompany’s growth.
However, as we navigate a rapidly evolving landscape, it
becomes evident that sustaining growth with this approachis challenging. As the leader of the R&D department, I bear
the responsibility of charting a growth strategy. This
involves making decisions regarding investments, theirscale, and the direction they take. It necessitates embracing
DX to ascertain available resources and optimize marketing
efforts. Furthermore, my role is to foster robust connectivity
between our engineering teams and management,
ensuring effective collaboration and alignment in our
pursuit of growth in this dynamic era.

Themes and keywords for NOK R&D
ThemesKeywords

Halving environmental
footprint

 utting electricity consumptionCMinimizing CO2 emissions

Resource conservation
and a 50% waste reduction

 ecreasing raw material utilization
DEnhancing yield rates

Reducing fixed costs
by 50%

Efficient equipment utilization

Shortening production
timelines by 50%

Accelerating development andprototype production cycles
Moldless and jigless approaches

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Data / Information

Special Feature“Exceeding expectations with extraordinary efforts” in manufacturing technology:

One of NOK’s assets is the knowledge we have gained from achieving technological advancements throughout
the production process, from material and product development to manufacturing.

NOK Group’s “Exceeding Expectations with Extraordinary Efforts”
in Manufacturing Technology
The NOK Group possesses a wide array of expertise encompassing product design technology, formulation technology for rubber,resin, adhesives, and lubricants, in-house production technology, including molding machines, inspection equipment, andfunctional evaluation devices, and product quality management technology. The integration of these capabilities allows us tocreate high-quality products.
Achieving this level of excellence in manufacturing is driven by a spirit of innovation unbound by conventional norms. In thiscontext, we will introduce NOK R&D and the manufacturing technology at Thai NOK Co., Ltd. as exemplary aspects of NOK Group’s“exceeding expectations with extraordinary efforts.”

NOK R&D“Exceeding expectations with extraordinary efforts” in manufacturing technology:

theoretical understanding and became a pioneer in thesealing industry by publishing research papers on thesealing principles of oil seals in 1959.
Behind this was the belief of the management at thattime that “technology is the lifeblood of the company.”
To refine their technical expertise, the engineers at NOK
pursued the underlying principles and were unwavering intheir commitment to theorizing. This engineering spirit
became a stance that remains to this day, characterized by
the attitude that “if there were no testing machines orinspection equipment, we would create them ourselves tounderstand the theory.”“Exceeding expectations with extraordinary efforts” in manufacturing technology:

Part two

Combining product design and material technologies
thousands of different materials depending on the sealing
target is another of our strengths.
Combining product and material formulations enables
the precise functioning of oil seals, and NOK possesses a
wealth of expertise in this area. This has been cultivatedthrough the adept utilization of organic chemistry andmechanical engineering techniques.

(Left image)	NOK Group products
used in the e-Axle.
(Center image)	Cross-sectional photo ofan oil seal.
(Right image)	Oil seal structure andthe names of each part.
A thin oil film of a few
micrometers forms
between the main lip andthe shaft, enabling thesealing function.

26

NOK CORPORATION Integrated Report 2023

From this extensive knowledge base, we identify the
optimal recipe based on elements such as the required
functionality and characteristics and then develop andmanufacture the product. The vast knowledge and expertise
accumulated through pursuing fundamental principles
underpinned the ability to accomplish such tasks.

“Exceeding expectations with extraordinary efforts” in manufacturing technology:

Part four

Housing

Fitting portion
Synthetic
rubberAir side

Metallicring
Spring

Sealing target side
Seal lip
Lip tip

軸

The engineer’s spirit of pursuing fundamental principles isalso applied to problem-solving. To understand the causes
behind occurring issues, the team formulates hypotheses

before acquiring and analyzing supporting data. We arecommitted to never giving up until we identify the root
cause and implement corrective measures.

Part one

Thoroughly clarifying and theorizing the principles underlying phenomena

Oil seals installed on machinery with rotating shafts
require a thin film of oil to form between the rotating shaft,
known as the lip, and the part it contacts to prevent wear
as the shaft begins to rotate. The thickness of this film is at
the level of a few micrometers (one micrometer isequivalent to one-millionth of a meter), and the productdesign for this extremely thin oil film is one of NOK’s
strengths. Blending technology that masters the use of

We can complete material and product development,
manufacturing, and sales within our own Group. Amongthese capabilities, we specialize in the development andblending technology of materials such as rubber, resin,
adhesives, and lubricants. We have registered over 80,000
different rubber formulations within our organization.

Continual commitment to problem-solving

Relentless challenges in pursuit of principle-based technology — NOK Group’s engineering spirit

The history of NOK Group’s technical development can be
described as a history of identifying and theorizing thefactors behind phenomena. NOK initiated the production ofoil seals, the company’s founding business, in Japan for the
first time in 1942. Oil seals are components used in machinesand devices with rotating shafts or pistons, preventing theinternal oil from leaking to the outside and keeping
external elements like rainwater and dust from entering.
While rubber oil seals became widespread in Japan in
the 1950s, the underlying principles of why oil did not leakwere not fully understood by any manufacturer, and they
were essentially designed and manufactured based on
empirical knowledge. NOK was quick to embark on thePart three

Dust lip

We have strong connections with universities andprovide a research environment where young
researchers can collectively realize their ideas.
Head of Seal Research Section Engineering Research Department NOK R&D

Ayako Aoyagi

A free and open research environment thatappeals to researchers
I specialized in chemistry during my master’s program at
graduate school, but I obtained my Ph.D. in mechanicalengineering. This career path is likely similar to other NOK
researchers. Traditionally, NOK has believed in educating
researchers in chemistry and mechanical engineering,
resulting in a significant number of researchers like me withexpertise in both fields.
We have a free and open environment where researchers
can bring their ideas to life, even allowing researchers to

A photo of Aoyagi with colleagues from her department, with her in the center ofthe front row.

build test machines themselves. It creates an atmospherereminiscent of university research labs.
There is active collaboration with universities, too, andthe connection between Kyushu University, where I earned
my Ph.D., and NOK has a long history.

Current research themes
We are focusing on three research themes in Seal Research
Section, where I am currently assigned. The first theme is“Wear Resistance Required for e-Mobility.” In e-Mobility,
situations arise where machine shafts rotate at ultra-highspeeds. We are researching how to prevent any adverse
phenomena during these high-speed rotations and how toaddress them if they occur.
The second theme, “Low Friction Technology,” is directly
related to energy-saving techniques. Even with insufficient oil
film, achieving good boundary lubrication can reduce thecoefficient of friction. While studying this mechanism, we arealso advancing research on polymer brushes. By applying
not only traditional oil films but also special macro-molecular-shin film polymer brushes to seal surfaces, we expect toreduce friction.
The third theme involves technological contributions to ahydrogen energy society. We are engaged in two projects: one
is our participation in a project with NEDO (New Energy andIndustrial Technology Development Organization), where we
conduct research through industry-academic collaboration.
Hydrogen is often stored in high-pressure tanks, and we areinvestigating how rubber deteriorates or fails in suchenvironments. Examining the condition of rubber under highpressure is challenging, but we envision ways to leverage
NOK’s expertise in visualization technology. The other project
involves our participation in SICORP, which aims to develop
low Life Cycle Assessment (LCA) materials for hydrogenenergy compatibility. This is an international project incollaboration with NOK, Kyushu University, the Freudenberg
Group and its subsidiary companies in Germany, as well as
the German materials research institution BAM (Bundesanstalt
für Materialforschung und -prüfung).

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Data / Information

Special Feature
TOPIC

Thai NOK Co., Ltd.

The secret to maintaining NOK quality globally is the power of people
Thai NOK Co., Ltd., or TNC, was established in 1988 as the core company of the NOK Group in Southeast Asia. It has become
the largest within the Group, with over 4,300 employees.
TNC manufactures all product items from business divisions and manufacturing subsidiaries in Japan.

The crucial skill of “adapting to manufacturing” is developed through training in Japan
In the manufacturing field, the management of “4M,”
which stands for Man, Machine, Material, and Method, iscrucial, and changes in 4M can be the cause of nonconformance issues.
The NOK Group emphasizes education in 4M management, including knowledge, to ensure consistent quality
across different countries.
When innovative products from Japanese businessdivisions are transferred and production is initiated at TNC,

staff members led by TNC’s on-site leaders visit therelevant business division for training. They learn the
management points of 4M and specific manufacturing
points for the product by following manuals and throughon-the-job training (OJT).
Through several months training periods, relationships
between team members deepen, making it easier for themto consult with the personnel from the transferringbusiness division when issues arise after their return.

Education, training, and material development for employees
At TNC, as with other overseas factories, we have developed our own education system. The Training Center is at
the core of this system, providing education ranging frombasic training for new employees to hierarchical education
and OJT.
In the Training Center, the QC Room is a dedicatedspace for imparting the essential principles of quality.
Central to this mission is the commitment to upholding
standards. To instill this concept in new staff members, wehave implemented innovative approaches to underscore its
significance. One illustrative method involves the creationof story-driven picture books, which revolve around
preparing the renowned Thai dish, Tom Yum Kung.
These books employ the recipe as a metaphor for standards,
shedding light on the consequences of deviating from thecorrect process. Additionally, we utilize cutaway automobile

models that integrate TNC products to underscore ourmessage. These instructional materials and programs
have greatly enhanced our ability to capture employees’interests and facilitate
enjoyable learning
experiences, resulting
in heightenedawareness of theimportance of quality.
This investment inpersonnel education
has yielded results,
As one of our factory rules, Employee isallowing us to achieve
taking good care of personal appearance.
NOK Quality in our
manufacturing.

The Global Summit 2023 NOK Group: around 500 employees fromaround the world gathered to align on pursuing further global growth
and to deepen their understanding of Our Purpose and Values

From an “international company” to a “global company”
Shifting away from a model where group companies
in various countries operated independently as“international companies,” the NOK Group hosted its
inaugural global gathering, the Global Summit 2023
NOK Group, in Tokyo on July 6th and 7th, 2023.
Approximately 500 employees joined the event, witha predominant representation from management
roles, encompassing 82 of the 91 consolidated groupcompanies worldwide. As part of the NOK Group’s

longstanding global strategy, nurtured for over five
decades, the summit provided an opportunity todisseminate our newly revised Purpose and Values(introduced in May 2023) to the organization.
These new objectives aim to elevate the NOK Group’s
worth and contribute to a more inclusive future forsociety, with a steadfast commitment to achieving
further global growth.

International employees collaborate on empowerment programs for self-initiated transformation
At this event, organizational leaders orchestrated
a series of initiatives to empower employees to drive
their own transformative efforts. During a presentation
led by the management team, CEO Masao Tsuru
underscored the significance of fostering unity
throughout the organization. He emphasized, “Even in
an unpredictable world, it remains vital that we holdour technical expertise and customer relationships
dear while steadfastly practicing Our Purpose andValues, thereby realizing the vision of Global One NOK.”
After the presentation, subject matter experts fromdiverse backgrounds shared cutting-edge perspectives on investments, technology advancement, and
ESG during a lecture series.

Deepening understanding of Purpose and Values among employees of different nationalities
During the meeting, employees from diverse nationalities shared business strategies and identified
challenges within their respective departments.
They conducted discussions based on these insights.
The sessions encouraged mutual understanding andcommunication among team members by incorporating team-building activities, resulting in a serious yet
lively training environment. Employees engaged ingroup work sessions as the final part of the two-day

event. They were divided into smaller groups andguided by consultants who had helped shape NOK’s
Purpose and Values. Within these sessions, employees
enhanced their comprehension of the Purpose andValues while engaging in meaningful discussions.
NOK Group will continue to take steady steps
toward becoming a global company, drawing fromthe experiences gained by multinational employees
who participated in this summit.

Placing value on people at TNC

Thai NOK Co., Ltd.
Human Resource
Development Dept.
Department Head

Duangporn Takayanagi

28

My main role at TNC is HR development. Specifically, I am involved in creating development plans, ensuring
the transfer of expertise, knowledge, and skills based on these plans, and nurturing the next generationof leaders.
I have been working on implementing ongoing education, including helping all department managers
understand that HR development is crucial for the company’s sustainable growth. As a result, I feel that each
employee’s skills are improving daily.
TNC practices management based on care and trust, cherishing its people, and continuously enhancing
teamwork and unity. In the face of crises such as floods, the Lehman Shock, and the COVID-19 pandemic,
everyone has come together to overcome challenges. Employee well-being is always a top priority for TNC,
and employees take pride in being part of the TNC family.
Moving forward, we will consistently foster an environment and culture that empowers all employees toproactively pursue their own growth.

NOK CORPORATION Integrated Report 2023

Approximately 500 attendees engaged in various programs during the event, including meetings to identify current challenges, team-building
activities, and workshops aimed at personalizing the Purpose and Values. Participants delved into the Medium-Term Business Plan and future
initiatives, pledging to embrace the vision of transformation.

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Data / Information

HR Strategy
Key highlights for the new HR system commencing in FY2024

HR Strategy

A Continual Process of Challenge and Growth
Toward an Organization Where Employees Feel Fulfilled

Enhanced Evaluation Visualization

Talent Development

Replacement of the current salary system,
which relies heavily on seniority, with a new“role grading system.” Under this system,
salaries will be determined based on employees’roles, positions, and performance.

Implementation of a system to visually represent
personnel evaluations, allowing for transparent
feedback on evaluation outcomes and how they
influence compensation. This visual representation facilitates a clearer understanding of thechallenges that need to be overcome.

Prioritization of talent development initiatives
that go beyond traditional job-level training tofoster growth among our workforce. This
includes specialized education programs toenhance expertise and leadership training
tailored to young employees.

Senior Operating Officer, General Manager, Corporate Administration Office

Noriyuki Takahashi

Introducing a Role Grade System to enhance engagement
One of the core values I hold most dearly is that every
employee should engage in continuous challenges andgrowth that lead to fulfillment, and our HR system should
be structured to realize this value.
For employees to embrace continuous challenges andgrowth, it’s crucial for each individual to maintain andenhance their motivation. However, our previous system had
certain limitations that made this challenging. Traditionally,
we believed that rewards should match contributions andpositions should align with virtues. This meant that compensation was determined based on seniority and performance,
while job positions were assigned based on suitability.
However, this approach did not always ensure a direct link
between compensation and job position. This traditional
approach strongly emphasized seniority, which could
hinder employees from maintaining high motivation.
To address these challenges, we have been actively
exploring reforms to our HR system for some time. We arerevising our compensation structure based on roles rather
than age or seniority. Starting from FY2024, we plan to
introduce a new Role Grade System. Under this system, we
aim to enhance transparency by openly providing feedback
to employees regarding their performance evaluations andcompensation adjustments. In this system, employees whoachieve outstanding results will have the opportunity forpromotion and advancement, accompanied by corresponding salary increases. This approach allows employees toexperience the direct impact of their efforts on their career
progression and financial rewards. Consequently, the RoleThe growth cycle envisioned by the new system
Recognized
growthOur employee development efforts have emphasized
creating a framework for nurturing young leaders. NOK U-35,
which we internally solicited in July 2023, is a program
designed to develop young leaders selected through avolunteer-based process. Those who pass the selection
process are given the opportunity to undergo several yearsof challenging assignments, with the aim of nurturing
future leaders who will contribute to the company’s

NOK CORPORATION Integrated Report 2023

job roles are not known in advance. Recognizing that
individuals have their own strengths and weaknesses,
we anticipated that many employees might be hesitant toapply. However, the NOK Group has been actively rolling out
new initiatives across various departments, fostering aculture that encourages and embraces challenges beyond
just the HR department. This supportive environment,
coupled with the prevailing momentum, led to a significant
increase in the number of applications for the program.

Regarding employee education, defining the necessary
skills and knowledge for each department and role iscrucial. Subsequently, employees should comprehend what
actions to take and what skills to acquire to fulfill theirrespective roles. This entails developing a structured
approach at every hierarchical level.
By empowering employees to chart their own growthroadmaps and actively pursue them, we aim to cultivate anenvironment that facilitates the organization’s overall growth.

Toward a genuinely equitable organization that empowers diverse talents
Encouragement toenhance skills

Boost inmotivation

Grade System is a highly motivating mechanism that fosters
self-growth and development.
In implementing this Role Grade System, evaluators
must provide effective feedback, and we have conductedtraining sessions on the new evaluation methods tofacilitate this. We ran one such training session in FY2022
and plan to continue these sessions in FY2023 and beyond.
Our objective is to ensure that evaluators are well-equipped
to provide meaningful feedback. Furthermore, we arecommitted to enhancing evaluator education to support thisprocess better. Additionally, considering the importance ofaligning assessments with Our Values that we introducedin May 2023, we continuously examine how to effectively
incorporate them into our assessments.

NOK U-35: Fostering young leaders

30

Implementation of Role Grading Systemmanagement. Traditionally, our educational system
primarily revolved around hierarchical training. However,this volunteer-based and selective educational approachmarks a pioneering initiative within our organization.
When we initially considered introducing the NOK U-35
program, there were concerns about whether we would
receive adequate applications. This program is not a
short-term one or two-year commitment, and the specific

The impact of the COVID-19 pandemic accelerated theimplementation of remote work at our company. While wepreviously had criteria, such as years of service, fordetermining eligibility for remote work, we recognized theneed to reevaluate our work arrangements comprehensively in response to the pandemic. For instance, forcing
employees to commute against their will due to personal
circumstances, such as family obligations, is detrimental toboth the employees and the company. However, creating
rules to accommodate every possible situation is administratively challenging. To address these issues, we decided
to embrace the concept of equity. It is a loss for both theindividual and the company when personal circumstancesor rules hinder individuals from realizing their full potential.
While we have always been attentive to equality, we acknowledge that equality alone cannot give every employee equal
opportunities. Moving forward, based on the principles of
equity, we will work on creating a framework that allows
diverse employees to unleash their potential in ways thatalign with their individual situations.
For example, a male-dominated organizational culture
remains prominent within the NOK Group, where men
account for more than two-thirds of the workforce. In theGroup, we have two categories of positions: major career
path and minor career path. Initially, the sole distinction
between these positions was whether they entailed job
transfers. However, in practice, major career path tended tofocus more on strategic responsibilities, while minor
career path leaned towards routine tasks. To overcome thissituation, we are introducing various career paths, such ascourses aimed at becoming specialists in practical work,
courses equivalent to current management roles, andcourses that allow career expansion without job transfers,
thus broadening the choices available to our employees.
Furthermore, in January 2023, we launched the DE&I
Project. This is a diversity advancement initiative composed
primarily of around 20 women employees, including
returnees from maternity leave, paternity leave, andforeign nationals, among other employees with diverse
backgrounds. The project involves conducting internalsurveys, researching other company practices, andorganizing seminars with external speakers to expand the
project’s impact across the entire NOK Group. We eagerly
anticipate the future activities of project members.

Future challenges and initiatives
A key challenge moving forward is to ensure that thesereforms are embraced and sustained throughout theorganization. Additionally, as a measure of the effectivenessof our initiatives, we initiated an Employee Engagement

Survey from FY2022. We will analyze the survey results,
identify areas related to job satisfaction and growth, andimplement measures to enhance employee engagement.

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Data / Information

Promotion of Sustainability Management

NOK Group Sustainability Statement

NOK Group’s Products and Technologies Contributing to Sustainability

At the NOK Group, we aim to go beyond generating economic
benefits for stakeholders: we aspire to evoke a profoundsense of pride within them. To that end, we have been
dedicated to fostering a sustainable society alongside ourbusiness endeavors since our founding.
Our Purpose statement, “Shaping Possibilities with
Unique Technology,” reflects our ambition to enhancepeople’s lives with innovative products created using

proprietary technologies based on our R&D, and we strive
to offer people safer and more comfortable lifestyles byharnessing these capabilities and embracing diversity anduntapped possibilities.
We remain committed to proactively tackling worldwide environmental and social challenges by leveraging
the inherent value within our company to realize asustainable society.

Contribution tosustainability

1

Products

Not generating andemitting substancesthat affect theenvironment

Products and technologies that are particularly
contributing to improvement of environmental
and social issues

Oil seals, O-rings, gaskets,electromagnetic shielding rubber(EM Guard), mechanical seals, metal
bellows, etc.

Dust-resistance improvement technology
Technology that prevents sand and dust from entering anengine while maintaining stable seal performance indemanding environments such as deserts and very cold
regions, and the rough and unpaved roads seen indeveloping countries.

Le-μ’s series, iron rubber(polyurethane elastomer) products,
accumulators, solenoid valves,
actuators, thermally conductive
rubber, etc.

TF Coat oil seals
Oil seals treated with a special coating called “TF Coat”
achieve 30% torque reduction compared with existing oil
seals. In addition to saving energy and reducing heatcaused by sliding, the effect lasts for a long time because
the coating is highly durable.

Noise and vibration control products,
special lubricant products, coatingproducts, wastewater treatment
membrane modules, water purifiermembrane modules, etc.

Industrial membrane modules
Industrial membrane modules are used to remove fineparticles from water at various kinds of sites, including
water purification and recovered water treatment facilities.
NOK’s industrial membrane module uses polysulfone, amembrane material with excellent pore size and flow ratebalance, to achieve high filtration performance andcontribute to the effective use of water, a global issue.

Rustector specification soft metal
gaskets and special lubricant greases

Rustector specification soft metal gaskets and special
lubricant greases
We have developed soft metal gaskets and greases
resistant to saltwater corrosion that can be used foraluminum housings such as electric vehicle units.
The Rustector specification soft metal gasket features
a seal with a unique cross-sectional shape that effectively
prolongs the life of units by slowing down the advance ofcorrosion while maintaining high sealing performance.
Corrosion can be contained further by using the seal in
combination with highly water-resistant grease.

Biological rubber electrodes,
gaskets

Biological rubber electrodes
Biological rubber electrodes have opened up new possibilities
that exceeded the capabilities of existing metal electrodes,
such as the measurement of brain waves, electrocardiac
signals, and myoelectric signals. With the adoption ofthese products, we expect to contribute to new R&D
related to promoting people’s health and wellness.

Recycled plastic products

Median strip blocks
We produced a recycling system for median strip blocks
used on roads whereby 98% of the raw materials arerecycled. The blocks are highly durable, which extends
their service life.

Tran-Q clay, Tran-Q rubber, conductive
rubber rings, high-speed rotating
seals, Rustector series, Fla(m)tector,
Le-μ’s series, FPCs for automobiles,
FPCs for high-speed transmission,cushion rubber, anti-vibration andanti-noise technology, space-saving
gaskets, high-heat-resistant andhigh-current FPCs

Tran-Q rubber
Thermally conductive rubber can be molded into a threedimensional shape along the heating element. While having
the elasticity peculiar to rubber, following the shape of theheating element increases the contact area and provides ahigher heat dissipation effect compared to sheet-shaped
heat conductive rubber. Since it has electrical insulationand low outgassing characteristics, it can be used in
automobile units such as ECUs, inverters, and PCUs, aswell as in the vicinity of electronic components.

Oil seals

Sustainability Framework, Governance
The NOK Group established an ESG Committee under the
direction of the Board of Directors to be a body that formulates various management policies from a medium- tolong-term perspective. The ESG Committee, chaired by
the President and CEO, is made up of the various generalmanagers and directors who oversee ESG activities.
The committee promotes corporate management thatincorporates ESG values, such as by establishing policies
and targets for the NOK Group related to the environment,
society, and governance and monitoring progress toward
these targets.

The ESG Committee has also established two subcommittees to support the implementation of ESG measuresfrom a specialist perspective. The Carbon Neutral
Subcommittee works on efforts across the Group toachieve carbon neutrality. The Climate Change Scenario
Analysis Subcommittee seeks to understand risks andopportunities for our business activities based on therecommendations of the Task Force on Climate-related
Financial Disclosures (TCFD), and to reflect these risks andopportunities in our business activities. Initiatives discussed
by the ESG Committee are reviewed by the Board of Directors.

2

Efficient energy
transfer

Le-μ’s series

3

Reducing
environmental
impactIndustrial membrane modules

Reorganization and Establishment of the Sustainablity Office
In May 2023, NOK established its Purpose and Values andformulated a medium-term management plan throughFY2025 and the NOK Group Sustainability Statement.
In June, NOK established the Sustainability Office as a
dedicated organization responsible for promotion ofsustainability management based on this statement. In
order to realize a more effective and efficient management

system, the Sustainablity Office is responsible for integrating
and supervising the sustainability activities of individualorganizations and Group companies. The Sustainablity
Office is within the Shonan R&D Center in order to work
closely with NOK R&D, which creates new value to resolve
social issues and develop products capitalizing on NOK’s
proprietary technologies.

Board of Directors
ReportReportReportDirections Report

Related internal organizations
NOK Group Environmental
Conservation Committee, etc.

Directions

Climate Change Cooperation
CarbonScenario
NeutralAnalysis
Subcommittee
Subcommittee
Promotion and Execution

Cooperation

Promotion and Execution

Sites and Group companies

Promotion andExecution

5
Factory Environmental
Engineering
Department
Responsible for promoting andoverseeing on-site improvement
work and measures related tothe environment and healthand safety

Sustainability
Department
Promoting implementation of ESG
measures to realize the NOKGroup’s sustainability
management

Extending product life

Special lubricant grease

Sustainablity
OfficeApprovals and Directions

ESG Committee(Chairperson: President)

4

Stable supply ofnecessary parts fordevices that protect
people’s health

Environment,
Health & Safety(EHS) Department
Responsible for operation of
the environmental management
system and the occupational
health and safety
management system

Biological rubber electrodes

6

Recycling of
raw materials
Median strip blocks

PickupSigning the UN Global Compact
The NOK Group is developing businesses globally in regions such as China and Southeast Asia. In April 2021, we becamea signatory of the UN Global Compact (UNGC) to announce to the world that NOK is a company that aims to realize a sustainable
society and is a company that addresses human rights issues. We are also actively collecting information and exchanging viewsby participating in several subcommittees.
We also support the Ten Principles of the UNGC and implement them in our business activities to contribute to thedevelopment of a sustainable society. The details of our initiatives will be disclosed to our stakeholders in a timely manner.

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NOK CORPORATION Integrated Report 2023

Provision of parts forelectric vehicles

7

Products used inelectric vehicles
https://www.nok.co.jp/en/
product/ev.html

Tran-Q rubber

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NOK Group Strategic Vision

NOK Group’s Value Co-Creation

Implementing ESG Initiatives

Data / Information

Information Disclosure Based on
TCFD Recommendations
Governance

Risks and Opportunities

The NOK Group has established an ESG Committee under
the auspices of the Board of Directors to formulate policies
and targets related to environmental, social, and governanceissues, and to also monitor progress made towards achieving
those targets. Initiatives discussed by the ESG Committee
are subject to review by the Board of Directors. In addition,
the Climate Change Scenario Analysis Subcommittee andthe Carbon Neutrality Subcommittee have been establishedunder the ESG Committee as specialized bodies for climatechange actions. The Climate Change Scenario Analysis
Subcommittee estimates the potential impacts of climatechange, while the Carbon Neutrality Subcommittee
formulates and promotes specific climate change actions.
These subcommittees take the lead and work with related
internal organizations, sites, and Group companies topromote climate change initiatives, and regularly report on
the progress of these initiatives at ESG Committee meetings.

Board of Directors
Approvals and Directions

Risk Management Committee

ESG Committee (Chairperson: President)
ReportDirections

ReportDirections

BCM Committee
Information Security CommitteeRawmaterials

Opportunities

Actions emand for control/electrical unitsDand electronic components grows
with electrification.
Carbon neutrality increases opportunities togrow sales of low-friction, long-life products.
Markets related to renewable energy,
semiconductors, and labor- andpower-saving (robots, etc.) grow.

 xpand sales to the electric vehicle (EV/FCV)
E
market and growth industries (renewableenergy, semiconductors, etc.).
Create more opportunities to expand sales ofseal products for electrical units andbatteries for electric vehicles, as well as
newly developed products.
Develop and expand sales of products withsmaller environmental footprints (lowfriction, long life, high durability, bio-based
raw materials, etc.)
Develop and expand sales of FPCs for electricvehicle batteries.
Expand sales in the renewable energy
storage battery market.
Cultivate the electric vehicle infrastructure
market (charging stations).

Rising procurement costs due to carbon
taxes on raw materials.
Rising raw-material prices due to shifts insupply-demand balance.

Reduce raw-material costs throughrecycling and other effective uses ofresources.
Reduce costs by improving supply-chain
efficiency.

Monitor supply-and-demand forecasts for
raw materials, and optimize procurement
costs and prices. (Seal products: raw-rubbermaterials, steel materials, etc.; Electronic
components: copper, etc.)
Strategy for developing material-saving
fabrication methods (to improve yields).
Consider increasing the use of reusedmaterials and product recycling.

Rising operating costs due to carbon taxes.

Promote manufacturing efficiency andenergy-saving initiatives. (Improve
motivation to save energy.)

Revise the targets in the NOK Twin Green
Plan 2030.
Introduce in-house carbon pricing.
Develop new low-energy materials andfabrication methods.

Rising energy procurement costs due toshifts in electricity demand and powersource makeup.

Intensifying competition among electric
power suppliers.
Promote the introduction of in-houserenewable energy power sources using
public subsidies, etc.

 ptimize our power procurement sources.
O
Introduce renewable energy sources such as
solar power generation.

Corporate valuation negatively impacted
due to insufficient environmental initiatives.
Concerns that these will become a standard
for making investment and funding decisions.

Attract ESG investment by improving
external evaluation.

Proactively disclose corporate information inaccordance with the ESG Framework.

Safety and Health Committee
Labor-Management Council

Carbon Neutrality Subcommittee

Climate Change Scenario Analysis Subcommittee
Cooperation

Cooperation

Promotion and Execution

Promotion and Execution

Carbonprice

Bases and Group companies
EnergyRisk Management
NOK’s “Risk Management Regulations” stipulate the basic
policy and management system for risk management acrossthe entire Group. Based on these regulations, the Company
has established a management system in which the CEO
is responsible for risk management and promotes risk
management for the Group. The ESG Committee evaluatesand manages climate change risks and opportunities.
The Climate Change Scenario Analysis Subcommittee

collaborates with related internal organizations to pick out
and identify climate change risks and opportunities basedon their degree and duration of impact on our businesses.
The results of that identification process are reported to the
ESG Committee, which then assesses and discusses them,
before examining countermeasures and reflecting them inbusiness strategies. The most important risks and opportunities
are periodically reported to the Board of Directors.

Strategy
We recognize that climate change is an importantmanagement issue that will affect our finances into the
future. As such, we have carried out scenario analyses inaccordance with TCFD recommendations to assess theimpact and reflect climate change countermeasures in ourmanagement strategy. Based on data from sources suchas the International Energy Agency (IEA), the impacts ofclimate change on our businesses were defined under two

scenarios, the 4°C and 2°C scenarios. We then evaluatedthe risks and opportunities those two scenarios pose to the
NOK Group. Based on the results of these scenario analyses,
we will be promoting actions to address the identified risks
and opportunities. We will also continue to expand ourscenario analyses and incorporate their results into ourbusiness strategies and management plans. The goal is toimprove the resilience of our management strategy.
	For the “Scenario Definition,” please refer to the NOK website.
https://www.nok.co.jp/en/csr/tcfd.html

External
evaluation

DisastersElectronic Products

Risks

Markets

NOK Group Environmental
Conservation Committee

Seal eclining sales of conventional products forDinternal combustion engine applications dueto the increase of electric vehicles.
Declining market competitiveness due todelays in response to environmental issues(prices, customers’ purchasing policies).

Related internal organizations

ReportReportImpacts

Group-wide

 upply-chain disruptions due to disasters.
SSuspension of operations at Company
plants and damage to inventory in storage.

—

Carry out hazard risk assessments andtropical cyclone/disaster countermeasures(water protection) at all sites.
Secure inventory levels that are appropriate
for the risk exposure.

Indicators and Targets
As part of our climate change actions, the NOK Group
formulated the NOK Twin Green Plan 2030, and has beenpromoting the reduction of CO2 emissions and developmentof next-generation eco-technologies. To strengthen our
climate-change actions, we have recently raised the CO2
emission reduction targets set in the NOK Twin Green Plan

20182030 based on results from our TCFD scenario analyses.
With the aim of achieving carbon neutrality by 2050, we willcontinue to promote efforts to address climate change andconsider revisions to our targets from time to time basedon the results of scenario analyses and social conditions.

2030

Base year
Reduce CO2 emissions by
Reduce CO2 emissions intensity by

50% (Domestic group companies)
30% (Overseas group companies)

2050
Achievecarbonneutrality	See page 8 of ESG Data Book 2023 for details.

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CHAPTERNOK Group Strategic Vision

Implementing ESG Initiatives

Data / Information

03

Implementing ESG Initiatives

E NVIRONMENT

A company’s operations are inherently reliant on the sustained
existence of the Earth and society. In today’s global landscape,marked by pressing social challenges such as climate change,poverty, human rights violations, and corruption, integrating ESG(Environmental, Social, and Governance) measures is an imperative
aspect of corporate management.
CHAPTER 3 highlights the ESG initiatives of the NOK Group andthe status of their implementation.

Environment

Society

Governance

Climate Change Countermeasures

P.40

Resource Conservation and Waste Recycling

P.42

Management of Substances ofEnvironmental Concern

P.42

Conservation of Water Resources

P.43

Human Rights

P.44

Human Resources

P.44

Diversity

P.45

Labor Practices

P.45

Occupational Health and Safety

P.46

Supply Chain Management

P.47

Product Quality and Safety

P.48

Community involvement and development

P.50

External Director Interview

P.51

Corporate Governance

P.52

Compliance

P.57

Risk Management

P.58

S OCIALG OVERNANCE36

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NOK Group Strategic Vision

Data / Information

Environment
In recent years, a variety of environmental problems have emerged and are affecting our lives. To solve them and achievea sustainable society, we must reduce the environmental burden in all aspects of our economic and social activities. In the
Sustainable Development Goals (SDGs), environmental issues are regarded as one set of the social issues that must be
resolved, and many countries are tightening environmental regulations and working to protect the environment. Companies
are required not only to comply with the regulations of each country, but also to help realize a sustainable society by taking
the environment into account in their overall corporate activities.
NOK has established a system in accordance with ISO 14001 standards, promotes environmental management, andstrives to implement environmental management with the next generation in mind, thereby reducing its environmental
burden. The current percentage of NOK Group establishments with ISO 14001 certification is 98.5%.
Basic Policies on Environmental Conservation: https://www.nok.co.jp/en/csr/environment/management.html

Environmental Management System
With the Paris Agreement adopted in 2015 and the SDGs
agreement for 2030, society’s perception of environmental
issues is also changing. The Task Force on Climate-related
Financial Disclosures (TCFD) has proposed “climate-related
disclosures that have an impact on corporate finances,” andScience Based Targets (SBT) consistent with the levels
required by the Paris Agreement have stimulated activities
aimed at realizing a sustainable society, and corporations
are being urged to implement “environmental management,”
which is a business activity that takes the environment
into account.
The NOK Group established the NOK Twin Green Plan

2030, a long-term environmental vision for the year 2030
as its environmental management plan. Under this plan,
we have been engaged in environmental protection activities
such as climate change countermeasures, resource
conservation and recycling, conservation of water resources,
management of substances of environmental concern,
development of environmentally friendly products, andconservation of biodiversity. To realize a sustainable
society, we will continue to fulfill our social responsibility
by promoting environmentally friendly business activities
and provide environmental value to society by providing
products that contribute to the environment.

2020

2022

The Eighth Corporate Environmental
Conservation Targets(FY2020 to FY2022)

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Green Factory

Green ProductClimate change

Climate change• We aim to achieve carbon neutrality by 2050.
•A s a milestone toward achieving carbon neutrality, reduce
domestic CO2 emissions by 50% by 2030 (compared to 2018) andoverseas CO2 emissions intensity by 30% (compared to 2018).
• Introduce internal carbon pricing to help reduce CO2 emissions.
• We will actively promote the use of renewable energy.
• We will develop production facilities that reduce energy
consumption by 20% compared to conventional facilities.

• We will respond to the electrification of automobiles andoffer products that contribute to carbon neutrality throughvarious approaches.
•C ontributing to CO2 reduction through our products by developing
low-friction technology that helps to reduce fuel consumption.
• A sustainable company that provides products that contributeto the spread of renewable energy and promote the formation ofa sustainable society.
• We will provide products that contribute to the spread ofnext-generation energy technologies such as fuel cells.

Resource circulation

Resource circulation• We aim to conserve resources, reduce waste, and achieve a recycling
rate of 100%.

• Thorough control of chemical substances in products improves
environmental quality.

Water risk

Water risk

• We will work on reducing water use and ensuring cleaner
water discharge.

• We will supply products that contribute to the effective use of water(sanitary water supply and water circulation).

Biodiversity• We will promote biodiversity conservation activities tailored to
local characteristics.

Supply chain• We will work with suppliers to revitalize our efforts to address
climate change, resource recycling, water risk, and biodiversity.

The Eighth Corporate Environmental Conservation Targets (FY2020 to FY2022)
Slogan: Creating corporate value by increasing environmental value

Roadmap for Achieving Carbon Neutrality in 2050
In response to the global trend toward decarbonization andthe results of TCFD scenario analysis, in 2022 we revised
the NOK Twin Green Plan 2030 formulated in 2018 anddeclared that we will aim to achieve carbon neutrality by
2050. Under this long-term vision, the Group will work
together to realize a sustainable society through theprovision of eco-friendly products and business activities
in response to electrification of automobiles andcarbon neutrality.
Moreover, in order to achieve the long-term vision,
the NOK Group set goals related to environmental
management, climate change countermeasures, resource
conservation and waste recycling, conservation of water

NOK Twin Green Plan 2030 Long-term Environmental Visionresources, management of substances of environmental
concern, and environmentally friendly products as theEighth Corporate Environmental Conservation Targets for
FY2020 to FY2022. The progress has already met the target
level, except for the targets for CO2 emissions and water
withdrawals. In addition, although we are making steadyprogress in reducing our CO2 emissions and water
withdrawal targets, we will continue to work hard to reducethem because of the significant impact of fluctuations in
production trends arising from the COVID-19 situation.
We are preparing a roadmap for reducing CO2 emissionsfor 2030 and considering specific measures to reduce
CO2 emissions.

2030

NOK Twin Green Plan 2030
Long-term Environmental Vision

2050
Achievementof Carbon
Neutrality

Category

Environmental
management

Initiatives and targets[Fostering and establishing an environmental spirit]
Promoting activities that contribute to a better environment, tailored to the characteristics of each region[Improving the management level of the environmental management system]
Promoting and expanding education by rank and developing environmental human resources
Reducing environmental protection risks through a steady PDCA cycle[Strengthening the prevention of environmental non-compliance]
Promoting environmental risk assessments for equipment and facilities[Reducing CO2 emissions]
Developing energy-saving equipment for production processes
Reducing CO2 emissions in logistics processes
Actively introducing renewable energy[Targets]
Global:• Reduce CO2 emissions by 10% (compared to FY2018)• Reduce five-year average CO2 emissions intensity by 1% ormore (year on year)[Target]Recycling rate of 98.0% or more

Resource
conservation andwaste recycling[Resource conservation]
Promoting resource conservation through design andprocess changes, optimization of material inputs etc.
[Waste reduction]
Promoting recycling and countermeasures for productnon-conformity, reducing the amount of waste disposal in
landfills by converting waste to recyclable materials, andimproving the recycling rate

Conservation ofwater resources

Checking the volume of water withdrawals and water
discharge in Japan and overseas
Controlling the increase in water withdrawals[Target]Global:• Clarify the current water consumption and curtail an increase

Management of
substances ofenvironmental
concern[Reducing the environmental burden]
Reducing VOC emissions[Strengthening the chemical substance management system]
Promoting green procurement (thorough management ofchemical substances by suppliers)[Target]Global:• Reduce VOC emissions to less than the results for FY2010

Environmentallyfriendly products

Developing environmentally friendly products
Improving the level of environmental conservation assessment in products

Climate change
countermeasures* Recycling rate = (1 - Amount of landfill disposal / Total waste
discharge) x 100

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Data / Information

Environment

Climate Change Countermeasures
Basic Concept

Total electricity consumption of the NOK Group (domestic)
are actively reducing greenhouse gas emissions.
Recognizing that climate change is an important global
issue that must be addressed to create a sustainable society,
the NOK Group is working to achieve carbon neutrality by
2050. In line with TCFD recommendations, we are analyzing
the impact of climate change on the Company and promoting
the incorporation of climate change countermeasures into
our management strategies. We are also working to reduce
CO2 emissions throughout the product life cycle, including
through energy-saving activities, the active introduction ofrenewable energy, and the reduction of fuel used in logistics.

Concerns have grown in recent years about how abnormal
weather events occurring throughout the world may
threaten the survival of the human race. In Japan andoverseas, the decarbonization movement is gaining
traction, highlighted by the adoption of the Paris Agreementin 2016, and the Japanese government’s 2050 carbon
neutral declaration. It has also become important forcompanies to pursue carbon neutrality as a factor that
influences management. They are required to reflect thisapproach in their long-term management strategy, andalso disclose measures and information about how they

Targets and Results

(GWh)

500
400

Target 18% reduction

378

300
200
100
0

2018 2019 2020 2021 2022

2030 (FY)

CO2 intensity of the NOK Group (overseas)(t-CO2/million yen)

1.600
1.425
1.250
1.075
0.900
0.725
0.550
0.375
0.200

Target30% reduction
1.088
FY2022

16.9%

reduction of CO2 emissions
intensity compared to
FY20182018 2019 2020 2021 2022

2030 (FY)

CO2-free electricity ratio of the NOK Group (consolidated)
reduction in CO2 emissions intensity. The introduction ofrenewable energy sources and our day-to-day efforts tosave energy are leading to reductions in CO2 emissions.

In terms of progress toward the current three-year (FY2020
to FY2022) targets, we have achieved a 13.6% reduction in
CO2 emissions from FY2018, achieving our target, and a 3.9%

(%)

10
8

Three-year Targets and Results for FY2022

6
Unit

Baseline figure / Base year Target figure / Target year

Results for FY2022

CO2 emissions reduction target (consolidated)

1,000 tons-CO2

759.36/2018

683.42/2022

655.94CO2 emissions intensity reduction target (domestic)

ton-CO2/million yen

1.251/2021

1.238/2022

1.203 (-3.87%)* CO2 emissions are the sum of fuel and electricity consumption multiplied by the conversion factor. Fuel CO2 conversion factors are calculated using emission
factors based on the Law Concerning the Promotion of Measures to Cope with Global Warming.
The CO2 conversion factor for electric power is “CO2 Emissions from Fuel Combustion” from the International Energy Agency (IEA) (based on a location-based method).
CO2 emissions intensity represents a five-year average; the target is to reduce the five-year average change year on year by 1%.

4.2

4
2
0

2018 2019 2020 2021 2022

2030 (FY)

Adoption of internal carbon pricing
NOK Group Medium- to Long-Term Targets
Unit

Baseline figure / Base year Target figure / Target year

Results for FY2022

CO2 emissions reduction target (consolidated)

1,000 tons-CO2

759.36/2018

Carbon neutral/2050

655.94CO2 emissions intensity reduction target (domestic)

1,000 tons-CO2

258.60/2018

129.3/2030

188.23CO2 emissions intensity reduction target (overseas)

ton-CO2/million yen

1.31/2018

0.92/2030

1.09

GWh

455.45/2018

373.47/2030

377.58%0.06/201810/2030

4.20

Electricity consumption (domestic)
CO2-free electricity ratio (consolidated)* CO2 emissions are the sum of fuel and electricity consumption multiplied by the conversion factor. Fuel CO2 conversion factors are calculated using emission
factors based on the Law Concerning the Promotion of Measures to Cope with Global Warming. The electric power CO2 conversion factors are: domestic—emission
factors by electric utility; and overseas—“CO2 Emissions from Fuel Combustion” by the International Energy Agency (IEA) (using both market-based andlocation-based methods).
The CO2-free electricity ratio includes credits and certificates.

CO2 emissions of the NOK Group (consolidated)(1,000 tons-CO2)

800
700
600
500
400
300
200
100
0

40

CO2 emissions of the NOK Group (domestic)(1,000 tons-CO2)

300

656

250
200
TargetAchieving carbon
neutrality

150
100
50

2018 2019 2020 2021 2022

NOK CORPORATION Integrated Report 2023

2050 (FY)0188

Target 50%
reduction

FY2022

27.2%

reduction of CO2
emissions comparedto FY20182018 2019 2020 2021 2022

2030 (FY)The NOK Group is promoting the adoption of internalcarbon pricing (ICP) to further measures aimed at reducing
CO2 emissions with a view to achieving carbon neutrality.
Internal carbon pricing is a mechanism that we use toattach our own monetary value (carbon price) to CO2emissions. In doing so, it provides a frame of reference forinvestment, thereby facilitating investment in equipmentthat contributes to CO2 emission reductions. We have set

a carbon price of 30,000 yen/ton-CO2 for capital investments(environmental investments) that help lower CO2 emissions(Scope 1 and 2), such as in extremely energy-efficientequipment and renewable energy equipment (solar power
generation). Using this mechanism, we intend to step up
the pace of efforts to reduce CO2 emissions and do
everything we can to achieve carbon neutrality.

Reduction in energy consumed by recovering waste heat (China)
As a means of curbing its CO2 emissions, NOK (Wuxi)
Vibration Control China Co., Ltd. is reducing its energy
consumption by recovering waste heat generated at
its plants.
Waste heat (from compressors and VOC treatment)

generated in each process is reused and supplied as a heatsource to a single plant with a heat pump. As a result,
we were able to lower energy consumption in the factoryand reduce emissions by 593 tons of CO2 equivalent.

Purchase of renewable energy (Japan, China)
To achieve carbon neutrality, we continue to purchaserenewable energy.
In November 2022, the Tokai Plant switched to 100%
CO2-free energy for the electricity it consumes. As a result,as of the end of March 31, 2023, the plant had been able toreduce emissions by 772 tons of CO2 equivalent.
Mektec Manufacturing Corporation (Zhuhai) Ltd. has
reduced emissions by 7,079 tons of CO2 equivalent annuallyby adopting renewable energy sources.

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Data / Information

Environment

Resource Conservation and Waste Recycling

Conservation of Water Resources

Basic Concept

Basic Concept

We live a convenient and prosperous life with many
material advantages in a social system of mass production,
mass consumption and mass disposal. At the same time,
various environmental problems are occurring, such as thedepletion of natural resources and destruction of theenvironment. In recent years, people around the world are
calling for a shift to a recycling society and demanding thatbusinesses further promote the efficient use of resources,
taking into account entire product lifecycles, as well as the

3Rs (Reuse, Reduce and Recycle).
The NOK Group has been promoting the 3R initiative torealize a recycling-oriented society. The Group strives tocontribute to a sustainable society and to enhance corporate
value through a range of measures throughout the productlife cycle, including the efficient use of raw materials,
water, and energy as well as waste reduction and recyclingof resources by improving each process.

manufacturing process of our products, and by taking
thorough measures to clean wastewater. In addition, theNOK Group assesses the water risks in each country andregion to respond to different water risks according to thecountry and region, and promotes conservation of water
resources activities tailored to the characteristics of eachcountry and region.

Targets and Results

Targets and Results
The amount of waste sent to domestic landfill in FY2022
was 977 tons, a significant reduction from 1,986 tons in
FY2018, when the foundry began operations. However,
the recycling rate was 97.9%, slightly below the target
level. Going forward, we will continue to reduce the amountof waste by implementing measures to conserve resources
and prevent non-conforming products, such as checking
mold shapes and reviewing the proper weight of rubber
fabric, promoting recycling, and converting waste into
valuable resources, in order to achieve the NOK Twin Green
Plan 2030 target of a 100% recycling rate. In addition, theNOK Twin Green Plan 2030 clarifies our vision for resource
recycling, and we aim to realize a recycling-oriented
society through activities such as waste plastic reduction.

Currently, the global shortage of water resources is seen asa problem, exacerbated by an increase in drought-stricken
regions and the mounting severity of flood damage as a resultof the worsening climate crisis. It has become increasingly
important for companies to make effective use of water
resources to build a sustainable society.
The NOK Group works to protect water resources byidentifying and reducing the amount of water used in the

Final amount disposed of in landfill and waste
recycling rate of the NOK Group (domestic)
(t)

(%)

3,000

98.0

Target (recycling rate)

2,500

97.9

2,000

100.0
98.0
94.0

1,500

977

1,000

92.0
90.0

500
0

2018

2019

2020

Amount disposed of in landfill (left)

2021

2022 (FY)88.0

Waste recycling rate (right)

As a result of global efforts to grasp the volume of water
withdrawals and water discharge at each plant and to
reduce the volume of water withdrawals, the volumes ofwater withdrawals and water discharge were 8,666,000 m3
and 6,026,000 m3, respectively, in FY2022. In the production
process, efforts were made to reduce water withdrawals
by optimizing water circulation facilities in cooling towersthat use water, and reusing wastewater. As a result of these
activities, the actual amount of water withdrawals in FY2022
was lower than in FY2021.
In light of growing concerns about water risks worldwide,
the NOK Group is working to conserve water resourcesinternally and externally. We are proactively promotinginternal activities to reduce our water withdrawals toachieve the target and are also participating in external

water resource conservation activities such as groundwater
recharge activities.

NOK Group’s total water withdrawals(1,000 m3)

10,000

8,666

9,000
8,000
7,000
6,000
5,000

2018

2019

2020

2021

2022

(FY)

Assessment of Water Risks

Management of Substances of Environmental Concern
Basic Concept
To minimize the impacts of climate change, the depletionof resources, waste treatment, the growing demand forwater resources, and other environmental risks, and tocreate a sustainable society, we cannot ignore the environmental burden of the products we use on a daily basis.
Accordingly, companies must develop products andtechnologies that contribute to environmental protection

in ways that consider the entire life cycles of their products,from the procurement of raw materials to the products’
manufacture, transportation, use, and disposal.
The NOK Group is developing products that contributeto next-generation eco-technologies, taking into accountthe entire product lifecycle.

and conserve water resources, taking water withdrawals
and wastewater into consideration.
* A water risk assessment tool published by the World Resources Institute(WRI). It provides a world map with information on water risks such as
quantity of water, water quality, regulations, and reputation.

Water stress

4%

6%
16%

25%
Total of

Extremely HighHigh
Medium - HighLow - MediumLow

76 sites
49%

Water withdrawals in regions with high water stress

Targets and Results
The NOK Group’s VOC emissions during FY2022 were2,900 tons, keeping its VOC emissions below the Group’s
target of 5,855 tons. NOK will continue to seek ways toreduce emissions from adhesives and paints at eachstage of production so that we can maintain or reduce
VOC emissions. We will also pursue the development oftechnologies to prevent an increase in VOC emissions
when the use of organic solvents increases due toincreased production.

The NOK Group conducts water risk assessments acrossthe Group to efficiently promote measures in response towater risks. As a result of the survey on water stress at
global production sites by using AQUEDUCT*, operated by
the World Resources Institute (WRI), it was revealed that of
the total of 76 sites, six sites in Thailand and China and twosites in Germany are production sites with high water stress.
The NOK Group is currently working to grasp andcontrol water withdrawals on a consolidated global basis.
In addition, we will conduct water risk assessments when
new facilities are established, and we will strive to produce

Total VOC emissions of the NOK GroupCountry(t)

6,000
Target

5,000
4,000

2,900

3,000

Manufacturing sites

Number of sites

Water stressAmount of water
withdrawals

ThailandThai NOK Co., Ltd.

2

Extremely High

660,448 m3

China

Changchun NOK-Freudenberg Oil seal Co., Ltd.

1

Extremely High54,939 m3

Thailand

Mektec Manufacturing Corporation (Thailand) Ltd.

1

High

984,212 m3

Thailand

Mektec Precision Component (Thailand) Ltd.

1

High

59,999 m3

2,000

Legal Violation concerning Water Withdrawals and Wastewater

1,000
0

2010

2018 2019 2020 2021 2022 (FY)

There have been no serious violations or fines related to water quality or wastewater.
See page 17 of ESG Data Book 2023 for conservation of biodiversity.

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Data / Information

Society
Human Rights

Diversity

Basic Concept

Basic Concept

In its principles of corporate conduct, the NOK Group upholds
an approach to management that respects human rights.
To address respect for human rights more concretely,
we formulated a Human Rights Policy with the desire to
make our basic stance on human rights known across theCompany and among outside stakeholders, and to gain
understanding and cooperation in promoting respect forhuman rights. The Board of Directors approved the revised
policy on May 24, 2023.
Our management principle is “Respectful managementof people based on care and trust.” We value the life of each
employee and respect their humanity, and at the sametime, we strive to maximize the potential of each employee.
This is a key way we maintain and reinforce the Company’scompetitive edge. That is to say, we firmly uphold thestance of respecting human dignity across all aspects of
our operations.
A precondition for such management based on respect
for the human dignity of employees is the idea of respect
for basic human rights. Based on this principle, we respect
the human rights outlined in the International Bill of
Human Rights and the ILO Declaration on Fundamental
Principles and Rights at Work, and we became a signatoryof the UN Global Compact.
The NOK Principles of Corporate Behavior features thefollowing declaration: “We will carry out management that
respects the human rights of all people,” and we aredeveloping our business in accordance with this declaration.
NOK Group Human Rights Policy: https://www.nok.co.jp/en/csr/human_rights.html

Initiatives for FY2022
Human rights due diligence
We carried out surveys on human rights and labor atdomestic Group companies and certain overseas subsidiaries,
confirming that there were no human rights violations
requiring corrective action.
We also conducted similar surveys for our major
suppliers and received responses from approximately 60%of them, confirming that there were no human rights

violations requiring corrective action. We will continue tocarry out regular surveys, conduct ongoing monitoring, andpropose improvements as necessary.
Human rights education
We offered education to all employees by producing a humanrights education video and distributing it to Group companies
in Japan and overseas.

NOK is taking various measures to increase the number offemale career-track hires. We are also working to enhance
training and guidance functions so that female employees
currently in non-career-track positions can actively advanceto career-track positions, and beyond that to management
positions, in line with their willingness and abilities.
The medium-term plan in effect through FY2025 callsfor NOK Corporation and major domestic Group companies

Human Resources

Labor Practices

Basic Concept

Basic Concept

It is in the respective workplaces where employees canfeel that the company is carrying out “management that
respects people based on care and trust” as stipulated in
the Management Principles. Under the Basic Principle of
Human Resources Development and the Vision of Human

Resources Development, NOK aims to create workplaces
where employees can find satisfaction in their jobs and feelthat they are growing. To this end, we are working todevelop personnel who can contribute to the creation ofsuch workplaces through various programs.

Basic Principle of Human Resources Development“A workplace nurtures its people,
and people nurture their workplace”

Vision of Human Resources Development“Development of human resources
who take pride in their jobs and respect each other”

The employee education program of NOK consists oflevel-specific education and development/specialized
education. The level-specific education is intended toenable attendees to correctly understand their own roles
and the expectations of the Company, and to contribute to
the creation of workplaces where attendees themselves
and their colleagues can find satisfaction in their jobs andfeel that they are growing.
Rather than simply developing people who can speak
English, the goal of the Global Human Resource Development
program is to develop people who can work in English.
To improve overall English communication skills, in addition
NOK CORPORATION Integrated Report 2023

overseas sites, the NOK Group promotes the development
and appointment of human resources who acknowledge andunderstand local conditions, regardless of their race or gender.
Interaction among executives and the technology,
manufacturing, sales, operations, and other departments ofboth domestic and overseas sites is facilitated so that they
can utilize the outcomes to develop personnel and improve
operational quality and efficiency in each department.
Furthermore, non-Japanese employees are appointed tothe executive positions of overseas subsidiaries. In addition,
we proactively advance the appointment, development,
and participation of employees of foreign nationalities by
providing training for engineering staffs and manufacturing
operators of overseas subsidiaries in the technology andmanufacturing departments, and hiring non-Japanese
students in Japan.

Women’s Empowerment

NOK’s Human Resources Development Program

44

The NOK Group takes the stance of recruiting and appointing
various diverse human resources regardless of their gender,race or nationality. Approximately 38,000 employees ofdiverse nationalities, races, genders, and employment
types are currently working in the NOK Group. We ensurethat executives at both domestic and overseas sites
understand management based on respect for humandignity, which is the basic principle of the NOK Group, andpromote the practice of such management in accordancewith the circumstances in each region.
We are working to ensure that the percentage ofwomen, foreign nationals, and mid-career hires who arepromoted to management positions is at the same level
as that of regular hires, and there is no discrimination
regarding promotion.
With the stance of localizing business execution by

to regular language training, we provide opportunities toexperience as many different cultures as possible whilestill in Japan, and are nurturing human resources who will
be active globally.
In 2022, we introduced an online video learning service
called Schoo and worked to expand learning opportunities
for interested employees as a part of our development/
specialized education program. Employees can watch
videos on demand, but we also work to cultivate awarenessof the importance of learning, including through groupsessions watching videos on business skills and otherareas directly related to work.

Practicing the management principle of respecting humandignity means respecting and protecting workers’ rights.
In putting into practice management that respects humandignity, we comply with Principles 1 to 6 of the UN Global
Compact. Moreover, putting into practice one of NOK’s
Management Principles, to be “a company with open

to double the number of female managers compared tothe end of FY2022, and to raise the ratio of leader andprofessional career minded women to 30%.
We achieved our targets for FY2022, which were toraise the percentage of women hired for career-track
positions up to 10% and to triple the number of female
employees in management positions.

communication,” leads to the active promotion of dialogue
among employees and between the Company and employees.
Under these Management Principles, NOK is striving tocreate a workplace where employees can work with vitality
and peace of mind.

Compliance with Labor-related Laws
Our domestic Group companies are instructed to ensurecompliance with the Labor Standards Act, the Labor Union
Act, and any and all other labor-related laws. Our overseas
Group companies are also instructed to ensure compliancewith labor-related laws of each relevant country corresponding
to these labor-related laws.

There were no serious legal violations in FY2022
Business sites in Japan that accept foreign technicalinterns have been checked for compliance with the
Immigration Control Act as well as for the working andliving environment and working conditions for interns toensure that there were no problems overall.

Establishment of Healthy Labor Management and Labor Relations Based on Dialogue
Dialogue between management and employees is essential
to realizing “management that respects people based oncare and trust” and promoting healthy development.
Through respecting the right to organize, the right tobargain collectively, and other rights of workers, the NOKGroup has built a healthy labor-management relationship.
100% of employees of NOK Corporation and major domestic
Group companies are members of labor unions (apart from

non-eligible employees). Regular labor-management
meetings are held with the participation of the top management. Not only do we carry out negotiations on working
conditions, but also explain business conditions and present
management issues. Also, discussions on the Company’s
important policies and measures take place so that both thelabor side and the management side can cooperate inrealizing business development and employee wellbeing.
NOK CORPORATION Integrated Report 2023

45

NOK Group’s Value Co-Creation

NOK Group Strategic Vision

Implementing ESG Initiatives

Data / Information

Society

Occupational Health and Safety
Basic Concept

Initiatives for FY2022

Respect for human dignity is one of the NOK Group’s
Management Principles, and we believe safety is a vital
precondition for human dignity.
We have always operated our business according to theidea that health and safety are a top priority in everything
we do. To communicate the safety commitment of top
management more explicitly to employees, we formulated
the Safety Principles of NOK Group in FY2017 and are
pursuing health and safety activities across the Group withthe aim of eliminating industrial accidents.
In addition, in FY2022, the President released a

Health Declaration to indicate the commitment of top
management to initiate health promotion based on a healthmanagement approach.
As a company, we view mental and physical health asa management issue and are working to support employee
health. We also encourage employees to engage in healthy
activities on their own.
Safety Principles of NOK Group“Safety is the foundation for implementing management spiritthat respects human dignity, my desires, and my mission”

Occupational Health and Safety Promotion Framework
Although the NOK Group does not have a certified safety
management system, we have established a labor health andsafety management framework led by the President, and are
pursuing a PDCA cycle in accordance with ISO 45001
standards for occupational health and safety management
systems to promote health and safety activities for Group
Companies and for all operations both on the premises ofvarious business sites and beyond. Also, based on emergency response standards, each business site has established its own emergency response protocols.
In addition, at each business site we have formed
health and safety committees made up of representatives
from labor and management. The committees meetmonthly to confirm the status of activities and discuss anddecide on health and safety measures.
The Safety and Health Promotion Department*1 collaborates with the health and safety secretariats of each businesssite, branch, and Group company to maintain and improve
the health and safety management level of the NOK Group.

Occupational Health and Safety Promotion Framework
Representative Director, Chief Executive Officer

At the NOK Group, based on the status of industrial
accidents, the Central Safety and Health Committee,
chaired by the executive in charge of health and safety andmade up of representatives from labor and management,deliberates and decides on the annual action plan, which it
disseminates to all business sites along with priority action
items. Business sites that have experienced industrial
accidents and require particular improvement draw up
improvement plans as designated “specified managementbusiness units.” The safety and health control division
follows up with these sites on an individual basis.
The NOK Occupational Health and Safety Policy
formulated in FY2022 based on the Safety Principles of
NOK Group indicates the specific direction of health andsafety activities in line with the thinking of the Company’s
top management. We are implementing measures toenhance workplace safety, including establishment of a

See page 32 of ESG Data Book 2023 for our initiatives about health.

Central Safety and Health Committee (Chair: Safety Officer)

NOK Safety and HealthControl Departmern

Supply Chain Management
Basic Concept

NOK
Domestic plants

Safety and HealthCommittee(Chairperson:
General Manager)

Group Companies

Head office/branches
Safety and HealthCommittee

Safety and HealthCommittee(Chairperson: Safety
and Health Officer[head office], BranchManager [branches])(Chairperson:
General Manager)*1 EHS Department, Sustainability Office since June 2023

We believe that to fulfill our corporate social responsibility,
it is essential to share a common awareness across the
procurement supply chain while building relationships
based on mutual trust.
Today’s society is also facing many problems such asenvironmental and human rights issues, and companies
are expected to help address these to build a sustainable
society. To this end, we established the NOK Group
Procurement Policy for conducting procurement activities

We formulated a medium-term health and safety plan spanning FY2019 to FY2022 and have continued to take measures in
the following three key areas.
Improving the level of safety management to eliminate lost-time injuries and reduce the total number of occupational
accidents to halfEquipment safety measures through risk assessment
Zero explosions and fires and thorough implementation of measures to prevent recurrence

1.50

0.120

1.00

0.080

0.50

0.040

0.00

2018

2019

2020

2021

Manufacturing industry (calendar year)
Domestic Group companies (FY)

*2 Rate of lost-time injuries per 1 million hours

46

Lost-time injury severity rate*3

NOK CORPORATION Integrated Report 2023

2022

0.000

with suppliers.
At the same time, we ask suppliers to respect ourCharter of Corporate Behavior, the NOK Group Human
Rights Policy, the CSR Procurement Guidelines, and the
NOK Group Green Procurement Guidelines as we work
across the entire supply chain to achieve equitable, fair,and socially and environmentally friendly procurement
and bring about a sustainable society.

	For the NOK Group Procurement Policy and the CSR Procurement Guidelines, please refer to the NOK website.
https://www.nok.co.jp/en/company/procurement.html

Development of Medium-term Occupational Health and Safety Plan

Lost-time injury frequency rate*2

monthly Safety Day to carry out health and safety activities
at each workplace and elimination of hazards based onrisk assessment results and past data such as near-missincidents and findings of safety patrols. Health and safety
education begins with basic education when employees
first enter the Company and includes follow-up regulareducational programs to help employees gain the knowledge
and skills needed to work safely, as well as hazard simulations. We also carry out training for line managers to instilla shared awareness of health and safety.
As part of business continuity management (BCM),
we have formed a fire prevention Task Force to consider
issues and response measures and deploy them across theGroup. We have also established a database that we use toshare Group-wide information on near-miss incidents andsmall fires and deploy response measures horizontally.

Building Relationships of Trust with Suppliers
We believe that mutual development with our suppliers isimportant, and are committed to building strong relationshipsof trust and long-term cooperation.
Concidering trends in government and industry, theNOK Group joined the Declaration on Building Partnerships

in April 2022, and has held training sessions on topics for
those involved in procurement operations to keep in mind,
as well as guidelines for dealing with types of conduct thatare likely to be seen as problematic. We are striving topractice proper trading while raising awareness.

Promotion of Green Procurement
We globally publish the NOK Group Green Procurement
Guidelines, which describe the NOK Group’s environmental
policy and green procurement policy. We are working to
reduce our environmental impact in the entire supply chain
in cooperation with suppliers by asking them to submit
2018

2019

2020

2021

cooperation agreements to the NOK Group Green Procurement
Guidelines to ensure that suppliers are aware of ourenvironmental philosophy and policies, and that they canprocure raw materials and parts in an environmentallyconscious manner.

2022

Manufacturing industry (calendar year)
Domestic Group companies (FY)*3 Severity of injuries represented by the number of workdays lost per 1,000 hours
NOK CORPORATION Integrated Report 2023

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NOK Group’s Value Co-Creation

NOK Group Strategic Vision

Implementing ESG Initiatives

Data / Information

Society

Product Quality and Safety
Basic Concept

Quality Improvement Activities

The NOK Group has long engaged in manufacturing under
the concept that “quality is built in through the manufacturing
process.” Since our founding, our technology and quality
have earned the trust of numerous customers, who use our
products in a variety of fields.
To build in quality through the manufacturing process,our efforts have concentrated on cultivating the people
involved in manufacturing under our Management Principles
of respecting human dignity. This is the source of our quality.

We have developed a variety of educational programs forthis purpose. Recently, we have focused in particular on
strengthening the training of managers and supervisors,
driven by the desire to pass on the basics of manufacturing
to future generations as veteran employees retire frommanufacturing sites.
In recent years, we have also been proactively
incorporating digital technologies to further enhancecustomer satisfaction.

Quality Management Framework
Quality Assurance Framework
The Quality Officer supervises planning, coordination, andpromotion of quality assurance worldwide for all theoperations of the Seal Business, the Electronic Products
Business, and Other Business, regardless of their geographical locations. We develop Quality Assurance (QA) Action
Plans in line with the NOK Quality Assurance Policy andconduct regular on-site Quality Assurance (QA) Reviews.
In addition, our mother factory in Japan takes the leadin supporting the launch of overseas production transfers,
implementing priority action items, and resolving quality
issues. The Quality Control Office is also involved in key
matters associated with these operations, seeking theirseamless implementation.
Quality Assurance Action Plan
We have deployed the quality assurance policy and quality
targets to each business division, and they have formulated
the action plans. We pursue activities by setting out priority
action items and metrics for achieving quality goals.

Quality Assurance Review (QA Review)
The Quality Officer conducts on-site QA Reviews to assess
whether implementation plans have been formulated withan understanding of the intent of the Quality Assurance
Policy and whether quality improvement activities arebeing carried out effectively. In recent years, one focus has
been on addressing weaknesses by having production sites
take the lead in conducting reviews.
Quality Control Department Managers’ Meeting
This is a regular venue for quality control department
managers to gather and exchange information on thedevelopment of priority action items for the fiscal year andthe progress of activities. This occasion gives participating
managers an opportunity not only to share best practicecases presented by various sites, but also to sharelessons learned.
In this way, Group companies in Japan and abroad canreadily exchange information on quality management
systems in place to ensure that NOK’s products have auniform level of quality worldwide, thereby enhancing
customer satisfaction.
Domestic production departments
Overseas production departments

Policy,Decision Making
Formulation of a quality
assurance plan
Supervision of planning,
coordination, and promotion

Seal BusinessPresident

Quality Control Representative

Quality Control OfficeElectronic Products Business

Quality Officer

Quality Control Representative• Deployment of best practices• Sharing of lessons learned

Other Business
Quality Control Representative

Production subsidiary

Production subsidiary

Plants in Japan do the following as mother factories:• Support for quality assurance activities• Support for product transfers and launches of overseas production• Promotion of priority issues
See page 39 of ESG Data Book 2023 for our acquisition of quality management system certification.

48

NOK CORPORATION Integrated Report 2023

audit and review, and emphasize communication at the
Quality Control Department Managers’ Meeting for thoroughmanagement. Moreover, the support process, which isthe foundation of our quality improvement activities,
includes internal education and training, human resource
development, enhancement of motivation, and revitalizationof workplaces.

Field Quality Monitoring Activities
NOK draws on field quality data to regularly monitor foranything that could lead to significant complaints from themarket. Using results obtained from past activity performance assessments, surveys, and analyses, among otherdata, we collaborate on initiatives related to themes thathave been able to be established, including proposing
improvements to customers.

Field
Customers
Proposal of improvement measures

Collection of actual products for survey

Sales Department• Grasp of customer
information• In-house information
development

Database
Technology Department (business division)

Quality Assurance Department• Actual product survey• E xamination and implementation of
improvement measures• A ccumulation of our unique technology• Early detection of abnormalities
through data monitoring and analysis• Selection of survey target products

Improvement Activities through Quality Control Education and Practice Based on QC-Oriented Thinking
NOK offers quality control education at each level of theorganization. We put a particular emphasis on problem
solving, where we advocate fact- and data-based logicalanalysis and improvement under the motto of “Let’s argue
from the data,” which is a hallmark of QC-oriented thinking.
The business today demands a swift response at the
point of problem solving. To achieve this, NOK offers a SuT*
Program which aims to support the more widespread useof tools that help speed up problem-solving.
* SuT stands for Speed-up Tools of Problem Solution.

Having started out with a course on the “Seven QC
tools,” we now offer more than 20 courses ranging frommultivariate analysis to Design of Experiments. We also
have an advanced curriculum to train participants inmethods through hands-on exercises.
Advancedcouarse(specialized course)

Response surface method, Weibull
analysis, DRBFM, etc.

Intermediate
courseMultivariate analysis, Design ofExperiments, KT method, etc.

Entry course

Seven QC tools, QC story,root-cause analysis, etc.

Production subsidiary

QA Reviews

Quality Control Department
Managers’ Meeting

The NOK Group is taking steps to improve quality in all of
its processes, from order receipt to delivery. Our initiatives
to ensure safety in the product realization process include
those focused on field quality, judgment at quality gates,
mass-production process improvement, and customer
satisfaction. In the management process, we deploy policies
in line with the quality assurance action plans, conduct

QC Circle Activities

Customer Commendations

NOK employees take the initiative in conducting quality
control (QC) circles to pursue quality improvement activities
in small groups.
QC circles seek to resolve matters employees deal within their day-to-day workplaces, and also provide a venue
for the growth and character formation of members
through shared activities, which also leads to more vibrantworkplaces.
In FY2022, total 740 QC circles in Japan and overseas
took part in a quality control competition. The top activity
presentations of circles selected by each company wereentered into the NOK Group QC Circle Convention, and theoutcomes of the winning circles’ activities were showcased.
Since the first NOK Group QC Circle Convention washeld in 1963, this competition has been held 70 times overthe span of 59 years.

We have received high marks from customers for ourquality achievements and improvement activities. In FY2022,
we received 14 commendations for quality.

NOK CORPORATION Integrated Report 2023

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NOK Group’s Value Co-Creation

NOK Group Strategic Vision

Implementing ESG Initiatives

Data / Information

GovernanceSocietyCommunity involvement and development

External Director Interview

Youth development through rugby
NOK’s Shonan R&D Center supports Fujisawa Rugby Kickball Club, an NPO that aims to facilitate thephysical and mental development of youth by promoting and popularizing sports in the community.
In May 2022, the Shonan R&D Center made its sports field available for the holding of a kids’
rugby school. Members of the Milky Class, ranging from preschoolers to second graders, gathered
to play tag rugby, a game in which children compete for a tag belt worn around the waist instead oftackling each other. About 50 children and instructors participated in the event, which was a great
success. Parents expressed their appreciation for the event.
The provision of the practice field had been temporarily suspended because of the COVID-19
pandemic, but has now resumed and the Shonan R&D Center will continue supporting the club inorder to continue contributing to the community.

A Diverse Board of Directors Backs Up
Proactive Management
We have provided a training ground in
Shonan R & D Center as a venue for
Kids Rugby School

Proposing solutions to resolve social issues to customers at exhibitions
In order to expand contact with customers, the NOK Group exhibits various products and technologies
aimed at resolving environmental and social issues at exhibitions throughout Japan.
At the Automotive Engineering Exposition 2022 held in Yokohama and Nagoya from May to July
2022, we introduced products with the performance required for environmentally friendly EVs. Amongthe products unveiled at the exhibition was ethylene propylene rubber (EPDM), a type of synthetic
rubber made from biomass-derived raw materials. Compared to conventional general-purpose
EPDM, CO2 emissions in the manufacturing process of the raw polymer were reduced by approximately 40%, contributing to progress toward carbon neutrality. Other exhibits included the Conductive
Ring, an oil seal that energizes the motor shaft and housing while maintaining sealing performance.
By preventing the entry of foreign matter, it solves problems such as AM radio noise and corrosionof bearing races, a type of wheel. The Conductive Ring has a simple structure, combining rubberwith conductive properties, grease, and fabric, that reduces cost and space compared to theconventional structure.
At the 49th International Home Care & Rehabilitation Exhibition (H.C.R. 2022) held at Tokyo Big
Sight in October 2022, we exhibited for the first time the new Sotto Fabric + (Plus), a new product in
the Sotto series of rubber electrodes for biological signals, released in July 2022. It delivers uniform
electrical muscle stimulation (EMS) over a wide area and high conductivity for high-precision
sensing performance, enabling applications in physical therapy equipment used for rehabilitation ofpeople requiring nursing care and athletes, EMS equipment, and “smart wear” for measuring
biometric information.
By introducing highly functional products at exhibitions, the NOK Group helps customers
address environmental issues and improve operational efficiency in the nursing care sector, andcontributes to resolve diverse other issues.

For other initiatives, please refer to the NOK website.

50

Social / Local Area Activities

https://www.nok.co.jp/en/csr/social/social_contributions.html

Sports Promotion Activities

https://www.nok.co.jp/en/csr/social/sports.html

NOK CORPORATION Integrated Report 2023

Naoki Shimada
The role of stimulating management

Showcasing products for electric vehicles
to achieve carbon neutrality

I have been an external director at NOK since FY2022.
The NOK Group has made a significant shift from defensive
to proactive management, where quick decisions and therealization of new businesses and M&A are at the forefront.
Specifically, as the Group possesses strong technical,
manufacturing, and sales capabilities, it used to be amatter of efficiently producing what customers requested,resulting in profits. However, in line with the changing
times, we are now proactively exploring new ways ofselling and generating profits that align with the futurebusiness environment.
I was appointed as an external director based on the
expectation that my experiences in entrepreneurship,

management, and working with foreign consulting firms
would support a shift in business model thinking.
As the NOK Group launches its Medium-Term
Management Plan this fiscal year, we are pursuing a
Commitment Management approach. The “C” and “A” inthe PDCA cycle are essential to our success; any minor
deviations from our plan are quickly corrected to ensurea swift recovery. The board of directors plays a crucial rolein monitoring and guiding these assessments. Additionally,
achieving our goals demands fresh perspectives, where
external directors are instrumental. I am committed tosharing candid opinions with the board, striving to challenge
the Group’s existing thought patterns.

Spirited discussions at board of directors’ meetings
Showcasing composite materials to be
applied for urination detection sensors
and rehabilitation equipment

Sponsoring “Enosui eco” environmental activities promoted by Enoshima Aquarium
Since FY2019, NOK’s Shonan R&D Center has been sponsoring “Enosui eco,” environmental activities
promoted by Enoshima Aquarium (Fujisawa City, Kanagawa Prefecture). In June and July 2022,
a cumulative total of 102 employees of the Shonan R&D Center and their family members participatedin the beach cleanup activities organized by Enoshima Aquarium.
On the beach, which is popular with local people and tourists, there was a lot of plastic debris
scattered about. In recent years, microplastics, tiny pieces of plastic, have been identified as a major
cause of marine pollution.
We will continue to engage in community revitalization, environmental beautification, waste
reduction, and other environmental protection activities.

External Director
Founder & CEO, P&E DIRECTIONS INC

Within the board of directors are two other external
directors. Kensaku Hogen, a former diplomat who has
served as the Under-Secretary-General for Communications
and Public Information, and Makoto Fujioka, who, after
a diverse career at the Ministry of International Trade andIndustry (now the Ministry of Economy, Trade and Industry),
currently holds positions as an external director in multiple
companies. Although their areas of expertise vary, spanning from global business to domestic administration, I find
it intriguing that their opinions and ideas align remarkably
when it comes to a particular managerial challenge.
Our monthly meetings cover a wide range of management
issues, including overseas investments, M&A, fundraising,and talent development. We also receive updates on thestatus of each business division. All directors and auditors
actively share their opinions during these meetings,
leading to spirited discussions, and I’ve noticed that our
talks become livelier with each meeting.
In the early days of my tenure, I felt some hesitation
among the executives when I brought up topics from industries outside their own. However, I now see an atmosphere
where directors freely exchange their opinions, regardlessof internal or external perspectives.
NOK CEO, Masao Tsuru, encourages active participationand discussion, so I believe I have been able to contributeto some extent.

Elevating marketing efforts at customer-centric NOK Group
Sponsoring “Enosui eco” environmental
activities promoted by Enoshima Aquarium

Since my appointment, I have had the opportunity to visit
various NOK business units and Group companies, and I’ve
come to recognize several strengths. A wealth of knowledge in technology and production is accumulated at thegrassroots level with a dedicated team of individuals who
genuinely commit to their work. Furthermore, NOK Group’s

significant power lies in the strong relationships of trust it
has built with its customers. Looking ahead, it is crucial for
NOK to make its offerings known to existing customers andpotential new ones. Therefore, pursuing new sales and profit
strategies through marketing efforts becomes paramount.

NOK CORPORATION Integrated Report 2023

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Implementing ESG Initiatives

Data / Information

GovernanceCorporate Governance
Basic Concept

1 Board of Directors
plan to secure economic growth with stability and strong
increases in revenue over the medium to long term.
For this reason, the NOK Group considers continuously
strengthening the corporate governance framework as oneof our business management priorities, and we arecommitted to this goal.

The NOK Group aims not only to contribute to the development of economic society by creating added value throughfair competition, but also to become a company that benefitssociety at large by promoting management that can make all
stakeholders proud of the company and continue pursuingtheir dreams together. We are also promoting a management

Corporate Governance Framework
In addition, significant management risks are checked andassessed at the Management Oversight Council periodically.
In terms of the internal audit function, the Internal
Control Audit Committee, an advisory body to the Board of
Directors, regularly audits the systems to ensure the proper
operation of NOK and its subsidiaries in accordance with
the Internal Control Regulations, and reports the results to
the Board of Directors and the Board of Corporate Auditors.
On June 28, 2023, NOK introduced the CxO System inorder to further strengthen the governance of the entire
NOK Group in business execution. Specifically, we haveestablished CEO, CFO, and CTO positions that we consider
necessary as a manufacturing corporate group, and alsoorganized their duties and authority. By separating andclarifying the governance of the entire Group from that ofeach business company and delegating appropriate
authority in line with the actual situation, we have createda corporate system that enables swift decision-making andefficient group management.

NOK has adopted the format of a company with a board ofcorporate auditors. To develop and provide products andservices from the customer’s perspective in a businessenvironment where technological innovation and the needsof end users are rapidly changing, we believe it is importantthat directors who are well-versed in operating a businessbe involved in making key management decisions.
From this point of view, the directors who concurrently
serve as executive officers cooperate with each other in theexecution of their duties, while directors, including external
directors, mutually monitor each other. The corporate
auditors, including external auditors, audit management.
The Board of Directors and the Board of Corporate Auditors,
which include personnel from outside the company, arethe key to strengthening the checking function.
To improve objectivity and transparency regarding
nominations and remuneration, the Board of Directors has
established the Management Oversight Council with key
members from outside the company as an advisory bodyto the Board of Directors, which regularly confirms
important matters such as nominations and remunerationand provides appropriate advice to the Board of Directors.

	See page 42 of ESG Data Book 2023 for our steps to enhance
corporate governance.

Shareholders’ Meeting
Appoint/Remove

3

Consult 1

Management
Oversight Council

Supervise

Appoint/Remove

Board of Directors
Eight directors (including
three external directors)

external auditors)•S ubmit importantbusiness execution plans

NOK Chief Executive Officer,
Senior Executive Officer, etc.

ReportAccounting Auditor
Information
Exchange

Consult and direct• Discuss important matters and report on businessexecution (consolidated, segments and companies)

Internal Control Audit
Committee/Internal Audit
Department

Report• Draft business execution plans• Promote business execution

Report HoldGroup Strategy
Council andManagement Council

DirectReport Central Labor Management

Council, etc.

Explain or discuss business plans,
important organizational changes,
management policies, etc.

ReportReport • Share management
policies and plans
DirectConsult• Discuss business execution
Share • Monitor

ReportHead Office Divisions
Direct

ESG, risk management, compliance,
quality and environmental
management, etc.

Operating Divisions/Group Companies
Plan and promote execution plans for the business in charge

52

NOK CORPORATION Integrated Report 2023

Eight directors (including three external directors)

Number of meetings
held in FY2022

12

Overview• The Board of Directors determines allocation of duties of Directors and important matters such as business strategies andmanagement policy. It appoints Operating Officers responsible for implementation of operations at individual divisions,authorizes them to execute operations at individual divisions, encourages them to execute operations quickly andaccomplish objectives, and supervises them.
• Operational authorities and rules on decision-making are clarified pursuant to the Rules concerning the Operational
Authorities of Upper Management. A system is in place to ensure execution of their respective duties in an appropriate andefficient manner by monitoring the progress of business plans, managerial policies, and operational implementation plansat regular management meetings and through management reviews.
• In order to ensure efficiency in the execution of duties by Directors, meetings of the Central Labor-Management Council
consisting of the representatives of both the management team and employees, and other committee meetings are heldand business plans, important changes to organizational structures, and managerial policies are explained and discussed.

Specific mattersconsidered in
FY2022• Matters concerning investments, fund procurement, medium- to long-term management plan, measures to deal withbusiness risks, and other management strategies, including those of Group companies.
• Matters concerning governance, such as decisions to convene general meetings of shareholders, evaluation ofeffectiveness of internal controls, appointment of key employees, selection of representative directors, etc.

2 Board of Corporate Auditors
Composition

Five auditors (including three external auditors)

Number of meetings
held in FY2022

11

Overview• In order to supervise the Directors’ execution of their duties, the Board of Corporate Auditors formulates the audit policy
and audit plan pursuant to the Board of Corporate Auditors Regulations and a system is in place that allows auditors toattend the Board of Directors meetings and other important meetings to investigate the Company’s operational andfinancial conditions. Moreover, the Accounting Auditor and auditors exchange opinions on a regular basis.
• In addition to the formulation of the above policies and plans, the Board of Corporate Auditors determines the allocation ofduties among the auditors, confirms the status of design and operation of the internal control system, and reviews theappropriateness of the method and results of audit by the Accounting Auditor.

3 Management Oversight Council
Composition

Masato Tsuru, Representative Director, Chairman of the Board; Masao Tsuru, Representative Director, Chief Executive Officer;
three external directors

Number of meetings
held in FY2022

2

Overview• The majority of the members of the Management Oversight Council are independent external directors. The Management
Oversight Council regularly confirms particularly important matters such as nominations and remuneration, including
succession planning, and provides appropriate advice to the Board of Directors from the perspective of diversity and skills.
• The Management Oversight Council periodically checks and assesses significant management risks.

Appoint/Remove

Audit/ 2 Board of Corporate Auditors
ReportFive auditors (including three
Report• Directions for executing management
policies and plans• Appoint/supervise• Request report

Composition

Audit

Audit

Nomination of Directors and Auditors
NOK decides candidates for directors and auditors at meetings of the Board of Directors, taking into account their abilities,
insight, character, etc., in a comprehensive manner. Specifically, the Company nominates directors and auditors based on their
qualifications and aptitude for the position in accordance with the following nomination policy.
Directors
The Company believes that it is important for directors who
execute business operations to be well-versed in the NOKGroup’s operations and involved in making key management
decisions. Based on this belief, the Company nominatescandidates for director in view of their experience.
External directors
In addition to complying with the external requirements set
forth in the Companies Act and the independence criteriaof the Tokyo Stock Exchange in nominating external
directors, the Company expects external directors to beable to advise on the Company’s corporate activities froman objective, wide-ranging and high-level perspective
based on their wealth of experience and high-level insight.

In this way, the Company nominates candidates forexternal director on the basis that there is no conflict ofinterest with general shareholders.
Auditors
Auditors are expected to perform functions and roles suchas conducting objective and appropriate audits based on
their expertise. The Company nominates candidates forauditor on the basis that there is no risk of conflict ofinterest with general shareholders.
In addition to the above approach, candidates forexternal auditor positions are nominated in accordance withthe external requirements set forth in the Companies Act
and the independence criteria of the Tokyo Stock Exchange.
NOK CORPORATION Integrated Report 2023

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Data / Information

Governance

Assessing the Effectiveness of the Board of Directors
In May of each year, NOK administers a self-evaluationquestionnaire to all directors and auditors, including thosefrom outside the company, asking them questions about
the composition, operation, and agendas of the Board of
Directors, as well as questions about the structure that

supports the Board of Directors. The aggregate results of
responses are shared with the Board of Directors.
The analysis and assessment of the self-evaluationquestionnaire survey conducted in May 2023 indicatedthat the Board of Directors as a whole was effective.

Remuneration
for Directors

Directors’ remuneration consists of a fixed remuneration portion, a remuneration portion for short-term expected
achievements and a remuneration portion for long-term expected achievements, with consideration given to directors’
responsibilities to improve business results each fiscal year and to increase the corporate value from a medium- to long-term
perspective. The Company classifies the remuneration in three types: (1) basic remuneration (monetary), (2) short-term
performance-linked remuneration (monetary) and (3) medium- to long-term performance-linked remuneration (shares).
On the other hand, external directors are expected to provide objective opinions and suggestions from an external perspective
independent from business execution, and in view of that role, they are paid only basic remuneration (monetary).

Remuneration
for Auditors

As auditors are responsible for auditing the execution of duties across the NOK Group, they are paid only basic remuneration(monetary) according to their positions.

Cross-Shareholdings
The Company has cross-shareholdings as assets based on the following views and verifies the suitability of holding theshares at regular intervals. Based on the results of the verification, the Company determines whether to continue or reducethe cross-shareholdings.
a. Purpose of holding funds
The Company believes that it is necessary to secure a certain
amount of funds to prepare for unforeseeable events under
the challenging business environment in our operation of
the Electronic Products Business, which is subject to highvolatility in the short term, and the Seal Business, in viewof concerns regarding a decrease in demand as electricvehicles and fuel cell vehicles become more popular in themedium to long term. Furthermore, to grow the Company
and expand its business, the Company believes that it isnecessary to secure funds on hand, separate from the usual
working capital, as necessary funds for new investmentsthat carry risk and funds to cover times when risks arise.
Given the above reasons, the Company has determinedthat a certain amount of funds is necessary and is holding
the funds as assets.
b. Purpose of cross-shareholdings
The Company believes that it is desirable to hold assetsthat provide three types of value, “financial value,” as wellas “business value” and “value as an investment,” and has
determined that listed shares of customers are appropriate.
Although there are risks associated with listed shares, suchas price fluctuation, the Company has the cross-shareholdings
based on the Company’s view that of the various kinds ofassets such as government bonds, and real estate, only

Directors

listed shares can be expected to contribute to businessgrowth and revenue.
c. Verification of cross-shareholdings
Regarding cross-shareholdings, the Company confirms
the purpose of holding each issuer’s stock individually at
regular intervals, evaluates the cross-shareholdings at
regular intervals based on the applicable standards of theevaluation standards that have been established, andverifies the necessity of the cross-shareholdings.
According to the results of this verification, the Company
believes that it is necessary to sequentially sell, or reduce
the number of, the shares of issuers that are determined
not to meet NOK’s purpose of cross-shareholdings or the
standards. The Company has established individual
numerical values as the verification standards to determine
whether the cross-shareholdings provide the three typesof value, “financial value,” “business value” and “value as
an investment,” evaluates individual issues of stock, andverifies the suitability of the cross-shareholdings.
At the meeting of the Board of Directors held on April 19,
2023, the Company resolved to reduce by 25% the total
market value of its cross-shareholdings as of March 31,
2023, during the period of its Medium-Term Management
Plan running from FY2023 to FY2025.

Masato Tsuru

Masao Tsuru

Yasuhiko Kuroki

Representative Director,
Chairman of the Board

Representative Director,
Chief Executive Officer

Representative Director, Senior Executive Officer Director, Executive Operating Officer,
in charge of Corporate Sales & Marketing
Chief Financial Officer

Kensaku Hogen

Makoto Fujioka

Naoki Shimada

Director

Director

Director

Nozomu Maehara

Hideki Watanabe

Osamu Kobayashi

Hideki Ogawa

Atsushi Kajitani

Standing Auditor

Standing Auditor

Auditor

Auditor

AuditorSkills possessed
Name
Corporate
management

Masato Tsuru
Masao Tsuru
Yasuhiko Kuroki

Auditors

To this end, we have introduced a new stock-based
compensation plan for the management of the NOK Group’s
core companies, in which a certain percentage varies
according to the level of achievement of KPIs related tothe priority implementation measures in the NOK Group’s
medium-term management plan. The goal is to increase
corporate value over the medium to long term and toenhance stakeholder satisfaction through monetary andstock-based compensation, which varies according to
the degree to which performance targets are achieved ina single fiscal year.

Directors

NOK CORPORATION Integrated Report 2023

Director, Executive Operating Officer, General
Manager, Corporate Business Strategy Office

Refer to the Corporate Governance Report for the reasons for appointment of external directors and external auditors.

With respect to the remuneration of directors and auditors, the Company has established the following policy for determining thedetails of remuneration for directors and auditors. Based on this policy, the amount of remuneration for directors is decided throughdiscussions at Board of Directors meetings and the amount for auditors through discussions of auditors respectively, within thelimits of the total amount determined at the general meeting of shareholders.

54

Junichi Orita

Auditors

Framework of Remuneration for Directors and Auditors

Basic Policy
The NOK Group aims to become a strong company generatinghigh profitability by producing and selling unique, technologybacked products that are useful to society around the world.
We believe that pursuing this policy as a Group with amedium- to long-term perspective will help to enhance the
NOK Group’s medium- to long-term corporate value andraise stakeholder satisfaction.
In carrying out this policy, we believe it is necessary to
encourage management, including the directors of the corecompanies of the NOK Group, to achieve their goals and toenhance stakeholder satisfaction by means of compensation.

Akira Watanabe

Akira Watanabe
Junichi Orita
Kensaku Hogen

External

Makoto Fujioka

External

Naoki Shimada

External

Nozomu Maehara
Hideki Watanabe
Osamu Kobayashi
Hideki Ogawa
Atsushi Kajitani

External
External
External

Business andtechnology strategy

Sales strategy

Financial, accounting,and capital policies

Global management

New business

Attendance at Board of Directors’ meetingsand Management Oversight Council
meetings (FY2022)
Management
ESG
Board of Directors
Oversight Council(Environment, Social, Governance)
12/12
2/2
(100%)(100%)
12/12
2/2(100%)(100%)
12/12—(100%)
12/12—(100%)
12/12—(100%)
12/12
2/2(100%)(100%)
12/12
2/2(100%)(100%)
9/9
2/2(100%)(100%)
—
—
—
—
—
—
—
—
—
—

NOK CORPORATION Integrated Report 2023

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Data / Information

GovernanceComplianceInternal Control System

Basic Concept

The NOK Group has implemented an appropriate “System
for Ensuring the Propriety of Operations (Basic Policy for
the Internal Control System)” established in accordancewith the provisions of the Companies Act, and is committed
to establishing this system under the basic policy ofcontinuing to strengthen corporate governance in accordance with the Corporate Governance Code stipulated by
the Tokyo Stock Exchange.
Specifically, the Company has established Internal
Control Regulations based on the Basic Policy for theInternal Control System. NOK’s Head Office divisions provide
rules for the internal control system and give directions to
NOK’s operating divisions and subsidiaries, while theInternal Control Audit Committee periodically audits theinternal control system to determine the progress ofimprovement and implementation. The results of theseaudits are reported once a year to the Board of Directors.
During FY2022, there were no legal violations or
lawsuits that could have seriously affected the Company’s
performance.

Compliance with the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade, the Act against
Delay in Payment of Subcontract Proceeds, etc., to Subcontractors, and the Unfair Competition Prevention Act
Based on the Principles of Corporate Behavior, the NOKGroup stipulates in the “Behavioral Guidelines concerning
Employee Compliance” its stance and relationship withagencies, distributors, competitors and suppliers, andcomplies with the Act on Prohibition of Private Monopolizationand Maintenance of Fair Trade, the Act against Delay inPayment of Subcontract Proceeds, etc., to Subcontractors, andthe Unfair Competition Prevention Act, etc. The NOK Group
continuously raises employees’ awareness of the principles
by distributing an introductory compliance booklet andthrough education, etc., by the department in charge.
In addition, to ensure fair trade, the Company has established “Fair Trade Regulations,” which stipulate prohibitions
and management methods to ensure fair transactions.

In the event of a violation of the Group’s
anti-corruption policy, the Risk Management Committee isprimarily responsible for taking action. Information on
violations of the anti-corruption rules can be shared via
the Whistle-Blowing Hotline.
The Internal Control Audit Committee conducts anannual audit on the status of compliance with the Act on
Prohibition of Private Monopolization and Maintenance ofFair Trade, the Act against Delay in Payment of Subcontract
Proceeds, etc., to Subcontractors, and the Unfair Competition
Prevention Act and reports its results to the Board of
Directors. During FY2022, there were no violations in
the NOK Group.

Prevention of Bribery and Corruption
The NOK Group declares in the NOK Charter of Corporate
Behavior that it will maintain “fair, transparent, and freecompetition, appropriate business transactions, and soundand normal relations with political and administrative
authorities,” and that corruption and bribery are prohibited.
As a signatory to the United Nations Global Compact, the NOKGroup respects the Ten Principles of the United Nations
Global Compact and has established the NOK Group Policyon Prevention of Corruption and Bribery to further promotemeasures to prevent corruption and bribery. In the event ofa violation of the Group’s anti-corruption policy, the Risk
Management Committee is primarily tasked with taking
response measures. Our Whistle-Blowing Hotline also
accepts information on violations of anti-corruption rules.
Meanwhile, the Internal Control Audit Committee
conducts an annual anti-corruption audit of all domestic
and international divisions and Group subsidiaries, andreports the results to the Board of Directors.

See page 46 of ESG Data Book 2023 for the NOK Group Policy on Prevention of Corruption and Bribery.

Communication with Shareholders and Investors
NOK states in its Principles of Corporate Behavior: “We will
disclose accurate information about the Company timely
and appropriately, and have constructive dialogues withthe various stakeholders who surround our business in order
to increase the corporate value.” We also practice this in
our investor relations activities, where senior executives andexecutives, led by the department in charge of investor
relations, engage in dialogue with shareholders and investors.
The NOK group holds two financial results briefings
every year: one in May for annual results and another in
November for interim results. Securities analysts, institutional investors, research institutions, journalists and56

NOK CORPORATION Integrated Report 2023

financial institutions are invited to these sessions, where
we explain the financial results and forecasts, and therepresentative director or other directors answer questions.
During the question-and-answer session, questions about
next-generation vehicles were asked, and the sales status
and future prospects of products for electric vehicles
were explained in detail. Presentation materials used forfinancial results briefings are available on NOK’s website.
In addition, from the standpoint of fair disclosure, NOK
participates in events for individual investors every year.
In FY2022, we participated in online events.

The NOK Group established the Compliance Rules in 2006,
based on the NOK Charter of Corporate Behavior, which
stipulates compliance with laws and regulations as well as
the Company’s various rules and regulations. The Company
established the Behavioral Guidelines concerning Employee
Compliance as a guide for specific details of the regulations.

This document specifies the items that employees must comply
with in their business activities, and we ensure that all
Group employees familiarize themselves with the Guidelines.
	For the NOK Charter of Corporate Behavior, please refer to the NOK website.
https://www.nok.co.jp/en/csr/charter.html

Behavioral Guidelines concerning Employee Compliance
1. Respect for Human Rights, Prohibition against
Discrimination and Harassment
2. Fair and Appropriate Trade
3. Regulations against Insider Trading
4. Export/Import Procedures (Security Trade Control)

5.
6.
7.
8.

Laws Related to Intellectual Property Rights
Severance of all Relations with Antisocial Forces
Environmental Conservation
Safety and Health

9. Provision of Useful and Safe Products
10. Appropriate Management of Information
11. Prohibition Against Acts that May Damage theCompany’s Interests
12. Giving Report of Violations of Ordinances etc.

Compliance Promotion System and Initiatives
In the “Compliance Rules,” the NOK Group designates
departments in charge of individual laws and regulations
that are responsible for promoting compliance activities intheir respective operations. These departments act as
contact points for reports and consultations on relatedlaws, internal regulations, and rules.
The NOK Group has designated October of every year
as the compliance promotion month to regularly inform
employees of NOK’s compliance initiatives and to help raise

their awareness of compliance, such as by conducting
a survey of all employees on their compliance awareness.
The Company also provides compliance education as partof the training for new employees and newly appointed
managers. We have created educational materials for all
employees titled “Introduction to Compliance” andregularly distribute articles on different themes concerning compliance to continuously promote awarenessabout compliance.

Reporting Desk and Whistle-Blowing Hotline
The NOK Group has established the NOK Group Reporting
Desk and Whistle-Blowing Hotline to detect and correct
illegal conduct that violates the Compliance Rules at an
early stage.
Any employee who has noticed a violation can contact
the Reporting Hotline. If the violation continues even after
the report to the Reporting Desk or the employee finds it
difficult to report the case, he or she can contact the
Whistle-Blowing Hotline.
The Whistle-Blowing Hotline consists of the internal
contact (NOK’s Legal Affairs Department) and independentlawyers. Reports can be made anonymously, provided thatthey are objective and specific. Moreover, the whistle-blower
is protected against disadvantageous treatment undercompliance regulations. Whenever a report or consultationis received, the Company takes appropriate action, such as
investigating and correcting the situation in question.
Regarding overseas sites, in FY2019 and 2020, theWhistle-Blowing Hotline was set up (in and outside of thecompany) at our Group companies in China. Furthermore,
in FY2021 and 2022, we expanded and establishedwhistle-blowing hotlines at 32 Group companies in the restof Asia to strengthen our whistle-blower system.

Reporting Desk

Whistle-Blowing Hotline

Investigation/
Correction

Violation of laws andregulations
Employees
Response

Investigation/
Correction
Response

Violation of laws andregulations

Response

Officers/employees

Reporting/Consultation

Reported to/Seeking Consultation from

ChooseIllegal act by a colleague

Department head

Human rights/harassment

Business site’s administrative
department

Internal contact [NOK Group]

External contact [lawyer]

Illegal act in other departments

	
Department in charge ofindividual laws and regulations

NOK’s Legal Affairs Department

Cooperation

When the department in charge
is unknown, etc.

Business site’s administrative
department

Reporting

Reporting

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Data / Information

GovernanceRisk Management
Basic Concept

Crisis and Risk Categories that May Significantly Impact Company Management
Business strategy risk is assessed at meetings for
examining the Group’s management strategy, where risks
associated with the promotion of business and new
projects at Group companies are identified and discussed
to maximize returns in a timely and appropriate manner.
As for risk of loss, the Risk Management Committee isestablished to assist the chief risk management officer,
who periodically identifies and analyzes risks, as well as
quantifies them through risk-level assessments that take
into account the frequency (timing) of occurrence and thescale of loss (amount of damage). Thus, the Risk Management
Committee examines issues and response measures byprioritizing their importance and urgency.

NOK’s Risk Management Regulations stipulate the basic
policy and management framework for risk management
across the entire Group. Based on these regulations, theCompany has established a management framework inwhich the President is responsible for and promotes risk
management for the Group. We believe there are two typesof business risks that may affect the management of theCompany: business strategy risk, for which we seek tomaximize returns while balancing risks to enhance
corporate value; and the risk of loss, for which we seek toprevent or minimize the probability of losses occurring tomaintain corporate value.

Risks of loss are categorized as follows based on the types of crisis that may significantly impact company management andtheir causes.
Type of crisis

Shutdown of operations

Legal violations, etc.

See pages 49-50 of ESG Data Book 2023 for business risks.
Employee death, serious injury,or the possibility thereof

Management and Supervisory Bodies

Cause
Fire, explosion
Natural disasters (earthquakes, floods, etc.)
Illness (COVID-19, H1N1 influenza, SARS, etc.)
Suspension of materials supplies
Unlawful obstruction of business
Disruption of critical infrastructure
Judicial risk (crime, provision of illicit profit, etc.)
Taxation (violation of tax laws, etc.)
Companies Act, Financial Instruments and Exchange Act (shareholder derivative lawsuits, etc.)
Environment (pollution, etc.)
Labor laws (violation of Labor Standards Act, sexual harassment, etc.)
Industrial accidents
Traffic accidents
Natural disasters (earthquakes, floods, volcanic eruptions, etc.)
Fire, explosion
Overseas armed conflict, riots, terrorism, kidnapping, etc.

Lawsuits

Board of Directors
ReportOther matters that significantly impact
company management

Guide and Supervise

Risk category• Disaster risk
• Country risk

• Legal risk
• Credit risk

• Disaster risk
• Country risk
• Legal risk
• Credit risk
• Credit risk
• Various risks

Loss, leakage of key confidential information
Serious quality issues
Other

Business Execution Bodies
President (Risk Management Officer)

Responding to Disaster Risk
DirectBusiness Strategy
Risk Management

Check and EvaluateGroup Strategy Review Meeting

Risk of Loss Management

ReportReportRisk Management Committee

Refer for Discussion

Subsidiaries

ReportHead Office Divisions(Business Administration Department)

Business Execution Division
Thorough Awareness

Report1. Business Continuity Management (BCM) System
NOK Group Business Continuity Management System
Regarding business risks and emergencies, the NOK Group
Central BCM Committee
defines natural disasters, fires, explosions, serious accidents
Segment BCM Committee
and epidemics of infectious disease as “events that interfere
Seal BusinessElectronic Products Business
Other Businesswith business continuity.” The Company established theBusiness Continuity Management System to ensure businessSub-committee in Segment
continuity and to promote business continuity activities
consistently and effectively should such an event occur.
Sub-committee by organization (by business division and business site)
Specifically, the NOK Group BCM Committee was
Sub-committee by function (cross-functional)
established as a standing committee to promote business
continuity management activities. The management* A sub-committee is established in each segment’s BCM Committee.
framework consists of the BCM Committee, which is
responsible for formulating, maintaining, and updating thebusiness continuity plan (BCP), securing the budget and resources to implement it, implementing preventative measures,conducting education and training, conducting inspections, and engaging in ongoing activities.
In the event of an emergency, the Company must immediately set up an emergency response headquarters at the head
office and on-site response headquarters at local business establishments. Depending on the situation, relevant departments
and divisions will work together to deal with the situation promptly and appropriately.
2. Planning and promoting business continuity plans (BCP)The NOK Group will proceed with business continuity
measures based on the following basic policy:
1. Give top priority to ensuring safety, protecting people,
and saving people’s lives.
2. As a member of the local community, actively cooperatewith the recovery of the whole region.
3. Minimize the impact on customers and stakeholders,and fulfill responsibilities as a business operator.
Each business site, including domestic and overseas
Group companies, has a plan that outlines policies, systems,

and procedures to ensure that important business operations are not interrupted or are restored as quickly as
possible if an unforeseen event should occur. At the sametime, the Company verifies the plan’s effectiveness throughtraining and responding to identified issues. It also continues to implement measures to minimize damage, improve
emergency communication methods and reporting systems,
and reinforce the earthquake resistance of our IT infrastructure. We are also working with suppliers to strengthen
the business continuity of our supply chain BCM.

	For information security measures, cyber security measures, and protection of intellectual property, please refer to the NOK website.
https://www.nok.co.jp/en/csr/governance/risk_management.html

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Data / Information

Implementing ESG Initiatives

Financial Data
Unit

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022Net Sales

Millions of yen

693,689

746,147

713,138

729,341

669,482

626,815596,369

682,507709,956

Gross Profit

Millions of yen

145,144

129,416

120,339

129,242

109,437

96,98792,024

115,321

105,572

Selling, General and Administrative
ExpensesMillions of yen

78,05881,15880,56284,30886,297

84,95877,556

83,98490,193

Of which R&D Expenses

Millions of yen

8,096

7,632

8,274

9,443

10,45911,29810,053

10,41011,281

R&D Expenses to Revenue

%

1.2

1.0

1.2

1.3

1.6

1.8

1.7

1.5

1.6

Millions of yen

67,08548,25839,77644,934

23,14012,028

14,46731,337

15,378Cash Flows from Operating Activities

Millions of yen

80,61388,50368,03869,52663,854

71,37045,82454,99946,030Cash Flows from Investing Activities

Millions of yen(43,196)(65,682)(62,035)(58,681)(79,259)(50,425)(18,719)(37,972)(35,159)

Free Cash FlowMillions of yen

37,41622,820

6,003

10,844(15,404)

20,945

27,104

17,026

10,870Cash Flows from Financing Activities

Millions of yen(18,061)(24,008)(7,327)(13,010)

6,633(17,497)

5,884(32,070)(21,441)

Total Assets

Millions of yen

755,084

696,989

751,797

793,314785,133

728,695

803,000

857,324

862,750

Total Liabilities

Millions of yen

292,330

263,585296,686

293,419299,634

281,457

300,886

302,969

285,404

Total Net Assets

Millions of yen

462,754433,404

455,111499,894

485,498447,238

502,114554,355

577,346

%

55.9

56.7

55.7

57.9

56.6

55.9

57.0

58.6

60.6

Net Income (Loss) per Shareyen

271.21173.97158.39204.17

19.77(12.83)(7.87)

149.37

77.55

Profit Attributable to Owners of
Parent per Shareyen

2,440.93

2,293.76

2,424.43

2,657.85

2,567.92

2,353.56

2,644.14

2,903.78

3,082.93

Dividend per Share

yen

50.0

50.0

50.0

50.0

50.0

37.5

25.0

60.0

75.0

Return on Invested Capital (ROIC)

%

—

—

—

—

—

—

—

—

1.9

Return on Assets (ROA)

%

6.60

4.14

3.77

4.57

0.43

(0.29)(0.18)

3.11

1.55

Return on Equity (ROE)

%

12.43

7.35

6.71

8.03

0.76

(0.52)(0.31)

5.38

2.60

Dividend on Equity (DOE)

%

2.0

2.2

2.1

1.9

1.9

1.60

0.90

2.1

2.4

Price-Earnings Ratio (PER)

times

13.35

11.05

16.31

10.12

87.15

(92.99)(190.72)

7.68

18.87

Price-Book Ratio (PBR)

times

1.48

0.84

1.07

0.78

0.67

0.51

0.57

0.40

0.47

Millions of yen

41,47061,39965,13558,38870,11847,66925,72841,03047,759Operating Results (Fiscal Year)

Operating Income
Cash Flows (Fiscal Year)

Financial Position (Fiscal Year-end)

Shareholders’ Equity Ratio
Per Share Information

Other Financial Data

Capital Investment

60

NOK CORPORATION Integrated Report 2023

NOK CORPORATION Integrated Report 2023

61

NOK Group’s Value Co-Creation

Non-financial Data

Data / Information

Implementing ESG Initiatives

Corporate Profile
Company name

NOK CORPORATIONHead office

1-12-15 Shibadaimon, Minato-ku,
Tokyo, Japan

Established

December 2, 1939

Environment(Scope 1+2)

Total CO2 emissions(Market base*1)

NOK Group Strategic Vision

Employees

37,913 (Consolidated / as of March 31, 2023)
3,419 (Non-Consolidated /as of March 31, 2023)

Scope

Unit

FY2019FY2020

FY2021

FY2022

1,000 tons-CO2

693

628

727

656

FoundedJuly 9, 1941

Consolidated
subsidiaries

91 subsidiaries

Consolidated

Capital¥23,335 million (as of March 31, 2023)

Securities code

7240

Scope 1

Consolidated

1,000 tons-CO2

43

38

41

39

Scope 2

Consolidated

1,000 tons-CO2

650

590

685

617

CO2 emissions for Scope 3*2

Consolidated

1,000 tons-CO2

268

269

2,169

2,137

Total energy consumption

Consolidated

TJ

5,094

4,700

5,255

4,797

VOC emissions

Consolidated

1,000 tons

3.4

3.1

3.2

2.9

Total water withdrawals

Consolidated

1,000 m3

9,363

8,347

9,187

8,666

Total wastewater

Consolidated

1,000 m3

7,735

6,116

6,619

6,026

Industrial waste

Consolidated

1,000 tons

58

52

60

52

Stock Information
Status of Stock (as of June 30, 2023)*1 CO2 emissions are the sum of fuel and electricity consumption multiplied by the conversion factor. Fuel CO2 conversion factors are calculated using emission
factors based on the Law Concerning the Promotion of Measures to Cope with Global Warming. The electric power CO2 conversion factors are:domestic—­emission factors by electric utility; and overseas—“CO2 Emissions from Fuel Combustion” by the International Energy Agency (IEA) (using bothmarket-based and location-based methods).
*2 Categories 9 and 12 are not included in the calculation because it is difficult to calculate their current status.

Shareholding by Shareholder Type (as of March 31, 2023)

Number of shares issued
and outstanding

173,138,537 shares

Number of authorized shares

600,000,000 shares

Number of shareholders

12,693

0.45%

8.73%
21.72%

Foreign corporations, etc.
Financial institutions
Other corporations
Individuals, others
Financial instruments
business operators

40.24%

28.86%

SocialScope

Unit

FY2018FY2019FY2020

FY2021

FY2022Japan

persons

10,78911,001

11,017

10,73010,648Chinapersons

11,681

10,913

9,383

9,690

10,659Southeast Asia

persons

18,651

17,395

16,194

15,623

15,196

Europe and the United States

persons

1,130

1,183

1,405

1,570

1,410

Consolidated

%

—

—

—

—

26.9

Ratio of mid-career hires inmanagerial positions

Major domestic Group companies(Non-consolidated)

%

—

—

—(9.8)—(9.8)

12.3(11.3)

Number of new graduates hired

Major domestic Group companies(Non-consolidated)persons—(147)—(151)—(117)—(41)

96(80)

Ratio of female new graduates
hired for the managerial track

Major domestic Group companies(Non-consolidated)persons—(6.1)—(5.2)—(6.3)—(13.3)14.9(16.1)

Number of employees(by region)
Ratio of female employees in staff
positions

Governance

Composition of the Boardof Directors
Board of Directors’ meetings
Number of patents held

Scope

Unit

FY2018FY2019FY2020

FY2021

FY2022Major Shareholders (as of June 30, 2023)
Shareholder
Freudenberg S.E.

43,457,500

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

12,460,800

Custody Bank of Japan, Ltd. (Trust account)

10,225,800

Seiwa Jisho Co., Ltd.

8,773,000

The Dai-ichi Life Insurance Company, Ltd.

8,000,000

SSBTC CLIENT OMNIBUS ACCOUNT

6,832,184

Toyota Motor Corp.

6,809,500

Sumitomo Mitsui Banking Corporation

4,270,000

NOK Employees Stock Sharing Plan

3,613,088

Sompo Japan Insurance Inc.

3,036,400

Number of directors—

persons

9

8

9

9

9

Of which the number ofexternal directors—

persons

2

2

2

2

3

Number of meetings held—

sessions

14

13

14

12

13

Average attendance rate

—

%

97.7

98.2

100

99.1

100

patents

1,868

1,882

1,768

1,770

1,666

3,500

patents

2,001

1,901

2,112

2,674

2,683

3,000

Japan
Overseas

NOK Group

Number of shares held (shares)

Share Price
4,500

NOK

TOPIX

Share Price (yen, points)

4,000

2,500

Initiatives Endorsed by NOK

External Recognition

2,000
1,500
1,000
500

* FTSE Russell (the trading name of FTSE International Limited and Frank Russell Company) confirms that NOK FTSE Russell (the trading name of FTSE International Limited
and Frank Russell Company) confirms that NOK has been assessed according to the FTSE4 Blossom Japan Sector Relative Index criteria, and has satisfied the requirements
to become a constituent of the FTSE4 Blossom Japan Sector Relative Index. The FTSE4 Blossom Japan Sector Relative Index is used by a wide variety of market participants
to create and assess responsible investment funds and other products.

0
March
2013

March
2014

March
2015

March
2016

March
2017

March
2018

March
2019

March
2020

March
2021

March
2022

March
2023

Total Shareholder Return (TSR)
Detailed data on ESG are available in the ESG Data Book 2023.
https://www.nok.co.jp/pdf/csr/report/2023/esg_databook_2023_e.pdf

62

NOK CORPORATION Integrated Report 2023

FY2018FY2019FY2020

FY2021

FY2022

NOK (%)

85.8

62.0

78.1

63.9

82.8

TOPIX including dividends (%)

95.0

85.9

122.1

124.6

131.8

NOK CORPORATION Integrated Report 2023

63

NOK Group’s Value Co-Creation

NOK Group Strategic Vision

Data / Information

Implementing ESG Initiatives

NOK Group Sites
Japan

NOK CORPORATION

Major Domestic Group Companies

Head Office (Minato-ku, Tokyo)

Overseas Manufacturing Subsidiaries

NIPPON MEKTRON, LTD.

Shonan R&D Center(Fujisawa City, Kanagawa Prefecture)
Fukushima Plant(Fukushima City, Fukushima Prefecture)
Nihonmatsu Plant(Nihonmatsu City, Fukushima Prefecture)
Kitaibaraki Plant(Kitaibaraki City, Ibaraki Prefecture)

NOK CORPORATION

Asia

Head Office (Minato-ku, Tokyo)

Changchun NOK-Freudenberg Oil seal Co., Ltd., China

Ushiku Plant (Ushiku City, Ibaraki Prefecture)

Wuxi NOK-Freudenberg Oilseal Co., Ltd., China

Tokyo Office (Taito-ku, Tokyo)

NOK (Wuxi) Vibration Control China Co., Ltd., ChinaSYNZTEC CO., LTD.

NOK (Wuxi) Water Treatment Technology Co., Ltd., China

Head Office (Minato-ku, Tokyo)

JAPAN

Yokosuka Plant (Yokosuka City, Kanagawa Prefecture)
CHINA

Fujisawa Technology Base(Fujisawa City, Kanagawa Prefecture)

Tsukuba Plant(Tsukuba City, Ibaraki Prefecture)
Shizuoka Plant(Makinohara City, Shizuoka Prefecture)

PT. NOK Freudenberg Sealing Technologies, Indonesia

Kitaibaraki Plant (Kitaibaraki City, Ibaraki Prefecture)

THAILANDNIPPON MEKTRON, LTD.

UNIMATEC CO., LTD.

MIYAGI

Mektec Manufacturing Corporation (Zhuhai) Ltd., China

Headquarters (Minato-ku, Tokyo)

Kumamoto Plant(Aso City, Kumamoto Prefecture)

VIETNAM

Plant No. 1(Kitaibaraki City, Ibaraki Prefecture)
Ushiku Office(Ushiku City, Ibaraki Prefecture)

NAGANOTOTTORI

Mektec Manufacturing Corporation (Suzhou), China
Mektec Corporation, Taiwan

MALAYSIA

FUKUSHIMA

Mektec Manufacturing Corporation (Thailand) Ltd., Thailand

SINGAPORE

Mektec Precision Component (Thailand) Ltd., Thailand
IBARAKI

Mektec Manufacturing Corporation (Vietnam) Ltd., Vietnam

SAITAMA

KANAGAWASHIZUOKAINDONESIANOK Precision Component Singapore Pte. Ltd., Singapore
PT. NOK Precision Component Batam, Indonesia

NOK Group Head Office
NIPPON MEKTRON, LTD.
SYNZTEC CO., LTD.
NOK KLUEBER CO., LTD.
UNIMATEC CO., LTD.

SYNZTEC CO., LTD.
Synztec Precision Parts (Shenzhen) Co., Ltd., China

FUKUOKA

Synztec Vietnam Co., Ltd., Vietnam

OITA

SAGA

NOK Asia Company Pte. Ltd., Singapore
PT. NOK Indonesia, Indonesia

Head Office (Minato-ku, Tokyo)

Tottori Plant(Saihaku-gun, Tottori Prefecture)Thai NOK Co., Ltd., Thailand
Vietnam NOK Co., Ltd., Vietnam

TAIWANNOK KLUEBER CO., LTD.

Tokai Plant(Kikukawa City, Shizuoka Prefecture)

Taicang NOK-Freudenberg Sealing Products Co., Ltd., China

Synztec (Malaysia) Sdn. Bhd., Malaysia

KUMAMOTOUNIMATEC CO., LTD.
Unimatec Singapore Pte. Ltd., Singapore

MIYAZAKI

Group Companies

Domestic Manufacturing Subsidiaries
NOKMETAL Co., Ltd. (Toda-gun, Miyagi Prefecture)

Kikugawa Seal Co., Ltd. (Kikugawa City, Shizuoka Prefecture)

Miyagi NOK Corporation (Kami-gun, Miyagi Prefecture)

MYK Corporation (Makinohara City, Shizuoka Prefecture)

Tohoku Seal Industry Corporation(Yama-gun, Fukushima Prefecture)

TVC Co., Ltd. (Saihaku-gun, Tottori Prefecture)

Miharu Industry Corporation(Tamura-gun, Fukushima Corporation)

Saga NOK Corporation (Ureshino City, Saga Prefecture)

TSK CORPORATION (Iwase-gun, Fukushima Prefecture)

Kumamoto NOK Corporation (Aso City, Kumamoto Prefecture)

Nihonmatsu NOK Corporation(Nihonmatsu City, Fukushima Prefecture)

Aso NOK Corporation (Aso City, Kumamoto Prefecture)

Isohara Polyurethane Industry Corporation(Kitaibaraki City, Ibaraki Prefecture)

Kusu Seimitu Co., Ltd. (Kusu-gun, Oita Prefecture)

Isshin Industries Corporation(Kitasaku-gun, Nagano Prefecture)64

NOK Elastomers Processing Co., Ltd.
(Kama City, Fukuoka Prefecture)

Mektec Manufacturing Corporation Europe DE GmbH, Germany
Mektec Manufacturing Corporation Europe CZ s.r.o., Czechia
CZECHIAGERMANY

Mektec Manufacturing Corporation Europe HU kft., Hungary

HUNGARY

Kusu NOK Corporation (Kusu-gun, Oita Prefecture)
Nichinan NOK Corporation (Nichinan City, Miyazaki Prefecture)
MEK-J Co., Ltd. (Ushiku City, Ibaraki Prefecture)

Kanasei Corporation (Fujisawa City, Kanagawa Prefecture)

Tokiwa Industry Co., Ltd. (Motomiya City, Fukushima Prefecture)

NOK Fugaku Engineering Co., Ltd.
(Kikugawa City, Shizuoka Prefecture)

Kuki Roll Industry Co., Ltd. (Kuki City, Saitama Prefecture)

NOK CORPORATION Integrated Report 2023

NIPPON MEKTRON, LTD.

EuropeNOK CORPORATION Integrated Report 2023

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