CSR
Report2016
April 2015–March 2016
Activities Report

Good spin
for the world

Our CSR
activities

Experience inspires the spirit of helping one another
Tomoki Isaka, C. T. Machinery Co., Ltd.
Every year I help set up and clean up for the summer festival hosted
by a senior care home run by someone I know. That experience has
no doubt prompted me toassist visually impaired people I
meet on the street, which mademe realize just how hard it is tolive with a disability. I now makea conscious effort to assist
those in need of help wheneverI see them.

Corporate social responsibility (CSR) activities are initiatives that companies
implement to benefit their customers, employees, society, the environment,
and to promote their sustainable growth. Our survey revealed that somepeople do not have a good understanding of CSR. One respondent
stated, “it just doesn’t hit home with me,” and another respondent
stated, “I can’t imagine how employees can get involved in CSR.”
Although you can read about our various corporate initiatives
further on in this report, here are some examples ofindividual and group initiatives designed to makethe world a better place to live.

Employees working together on regional promotion

Saving energy in everyday life

Volunteers from Fuji Honing Industrial Co., Ltd.

Yoshiaki Kazama, Tokyo Branch, EPD RoomOn April 17, a full marathon race took place along the shores of Lake
Kasumigaura in Ibaraki Prefecture. Despite the stormy weather, 23,000
people participated in the event, including four elite runners from ourcompany. Although they are at a time in their lives when physical fitness
begins to decline, their
daily practices have paidoff, and they all completed
the full distance within thetime limit (six hours). We
will continue to do our partto strengthen communities
by participating in local
events and other activities.

Before I leave home every morning, I always am certain that I haveturned off my audiovisual equipment, modem, router, and so on byswitching off thepower strip into
which they areplugged. This isgood for theenvironment andsaves electricity
when I’m not at
home.

NKC publishes this CSR Report to share information about its CSR

Here are the results of the questionnaire

activities with its customers, local communities, and other stakeholders.

survey on CSR Report 2015 published on

This report is available in full or as an excerpted version. The full report can

September 15, 2015. We value yourbe downloaded from the “CSR & Environment” page of the NKC corporatewebsite (http://www.nkc-j.co.jp/eco_csr/csr_dl.html). The booklet isavailable only as the excerpted version.
■ Period reported on: FY2015 (April 2015–March 2016)■ Scope:Nakanishi Metal Works Co., Ltd. and its affiliates■ Related guidelines: UN Global Compact■ Date published:

August 1, 2016

■ Send inquiries to:

CSR Group, CSR Management Division, Head Office2015 Survey Results

About CSR Report 2016

■ Editorial policy

feedback because we use it to consider
and implement future CSR activities and to
improve our CSR reports.
Please take a moment to complete thequestionnaire.
The number of responses is 377(as of November 2015)

Management Dept., Nakanishi Metal Works Co., Ltd.
TEL: +81-6-6351-4832 / Fax: +81-6-6351-7822

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NKC CSR REPORT2016

Grow plants to save the environment

Raising environmental awareness through trekking events

Gao YingQian, NKC MANUFACTURING WUXI CORPORATION

Volunteers from NKC CONVEYOR FOSHAN CO., LTD

I grow plants at home. Because I
water them every day, they are
growing quickly and filling myhome with life and energy.
Because plants absorb toxic
substances and purify the air, they
help to protect the environment.
Why don’t you grow plants andmake a difference to theenvironment?

A government sponsored 50–kilometer trekking event was held in
Foshan, China. Designed to increase environmental awareness, theevent attracted 200,000 people. Nine NFC employees formed a teamand participated in
the event.
Although the teamunfortunately did
not make it all theway to the end, it
was a challenging
and fulfilling
experience.

Love makes a difference in the world

Eco-driving paves the way to safe driving
Tetsuya Izuta, NKC OF AMERICA, INC

Qin ManYan, NKC CONVEYOR CO., LTD
My friend and I visited a school for
deaf children for the first time. I
communicated with the children
using sign language, which I had
studied. Their sweet smiles filled
me with happiness. I sincerely
hope that their lives will be forever
happy. If we will all treat each otherwith love, we can make the world
a beautiful paradise.

Living in America, I drive my car a lot commuting to work and more.
That’s why I drive in ways that will enhance the car’s fuel economy(e.g. going easy on the gas
pedal as well as the brakes).
Nonetheless, I must saythat doesn’t always work
because there are somereckless drivers out there.

Q. Please select the one option that best describes what you think of this report.
Poor:0%

Poor:0%

Poor:1%

Excellent: 15%
Below average:
1%

Excellent: 15%

Below average:
6%

Overallevaluation

Average:39%

Below average:
4%

Easy tounderstand

Good: 45%

Poor:0%

Excellent: 12%

Average:45%

Excellent: 16%
Below average:
3%

Number ofpages

Easy to read

Average:46%

Good: 37%

Good: 34%

Average:48%

Good: 35%

Q. Please write any questions or comments you may have about our CSR Report or about the typesof CSR activities in which you expect us to engage.

The activities implemented were provided in an easy-to-understand list format. / I’d like to see interviews with your employees. / I don’t evenknow what CSR means, so I want an explanation. / How about providing more information about disaster preparedness? / The reportprovided details about the activities implemented at each business site.

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NKC CSR REPORT
2016

About us
Since its foundation, the NKC Group has expanded its operations around the world and now operates manufacturing facilities and sales offices globally.

Corporate profile
Company name: Nakanishi Metal Works Co., Ltd.

Number of employees: 3,115 (including Group companies)

Established:

June 19, 1941

Head Office location:

Capital:JPY 2,512.50 million

3-3-5 Temmabashi , Kita-ku, Osaka

Lines of business●

Manufacture and sale of bearing retainers, conveyor systems, automatic controlling equipment, sash
rollers, residential housing products, rubber seals, precision tooling, automatic guided vehicles (AGV),
pressed metal products, injection-molded plastics, cold-rolled products, and so on●

Representative: Tatsuo Nakanishi, President

Business sites■ Domestic
Head Office (Osaka), Tokyo Branch (Chuo-ku, Tokyo), Aichi Sales Office/Sub-Office (Chiryu, Aichi), Nabari Plant (Nabari, Mie), Osaka Plant (Neyagawa,
Osaka), Mie Plant (Tsu, Mie), Kawachi Plant (Neyagawa, Osaka), Shiga Plant (Konan, Shiga), Kosai Sub-Office (Kosai, Shizuoka), Atsugi Sub-Office(Atsugi, Kanagawa), and Kyushu Sub-Office (Miyako-gun, Fukuoka)■ Overseas
Some names of our overseas business sites are abbreviated in this report.
NAKANISHI MANUFACTURING CORPORATION

NMC

U.S.A.

NKC OF AMERICA INC. HEADQUARTERSNAI

NKC CONVEYORS INSTALLATION CO.

NCI

CanadaNKC OF CANADA, INC.

NOC

Mexico

NAKANISHI CONVEYOR DE MEXICO S.DE R.L.DE C. V

NDM

U.K.

NKC CONVEYORS (UK) LTD.

NKC UK

Hungary

NKC CONVEYORS (UK) LTD., HUNGARIAN OFFICENKC Hungary

Sweden

NKC MANUFACTURING SWEDEN AB.

NSC

Spain

NKC CONVEYORS BARCELONANKC Spain

India

NKC CONVEYOR INDIA PRIVATE LTD.
NKC CONVEYOR INDIA PRIVATE LTD. SALES OFFICENKC India

Australia

NKC CONVEYORS (AUSTRALIA) PTY. LTD.

NKC Australia

Indonesia

PT. NAKANISHI INDONESIANKC Indonesia

Thailand

THAI NAKANISHI CO., LTD.

NKC Thailand

Philippines

NKC MANUFACTURING PHILIPPINES CORPORATIONNKC CONVEYORS PHILIPPINES CORP.

NPC
NCP

Malaysia

NAKANISHI CONVEYORS ENGINEERING (MALAYSIA) SENDRIAN BERHADNKC Malaysia

TaiwanTAIWAN NAKANISHI CONVEYORS CO., LTD.

NKC Taiwan

NKC MANUFACTURING DALIAN CO., LTD.

NDC

China

NKC CONVEYOR FOSHAN CO., LTD.

NFC

NKC MANUFACTURING WUXI CORPORATION

NWC■ Affiliates
Nakanishi Kosan Co., Ltd.; Neues Co., Ltd.; Banshu Nakanishi Metal Co., Ltd.; C. T. Machinery Co., Ltd.; E-Globaledge Corporation; Fuji Honing
Industrial Co., Ltd.; Suda Shoji Corporation; and I.S.A Co., Ltd.

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NKC CSR REPORT2016

Message from the President
We are moving ahead with various
initiatives that will improve ourcorporate value.
Tatsuo Nakanishi, President
Our operating environment

efforts to enable our employees to stay motivated about their workand to live in ways that fulfill their personal or social needs, such as
achieving a healthy balance between work and life and creating an
attractive workplace environment.
We also work to optimize work hours, improve training programs,
and implement initiatives designed to help employees adapt to being
part of a diverse staff (i.e. diversity in gender, race, age, and so on).
Additionally, we are hiring more women, improving women’s working
conditions, and implementing other initiatives to improve the roles ofwomen in the workplace.

Since the adoption of the Paris Agreement at COP21 in December
2015, countries around the world have stepped up their efforts to curb
climate change. The automobile industry, which is our major customer,
bears a relatively greater responsibility toward this end. That is why theindustry is making electric vehicles and plug-in hybrid vehicles more
widely available than ever before. In 2015, fuel cell vehicles werelaunched into the market, accelerating efforts toward a low-carbon
planet.

Midterm business plan

Risk management (BCP)

Last year, NKC Group kicked off its fourth midterm business plan
(FY2015 to FY2020). Our long-term vision under the plan is to achieve
JPY 100 billion in sales by 2020 and JPY 300 billion in sales by 2035.
Given the current uncertain global economic outlook, these are very
aggressive goals.
To achieve our goals, we must create new growth businesses aswell as maintain and expand our current operations. We cannot
maintain the sustainable growth of our Group without new businesslines. We plan to investigate new business opportunities by integrating
our existing technologies across departmental boundaries andaggressively working to build a firm foundation for our next corebusinesses.

In the wake of the Great East Japan Earthquake of 2011, the NKCGroup began developing a business continuity plan (BCP) to enable it tocontinue operations in the event of an earthquake or other natural
disaster.
Now that almost all of our business sites across Japan, including
our Group companies, are equipped with BCPs, we will ensure thatcompanies new to our Group will also develop one. Among ouroverseas markets, a basic BCP document has been created for our
locations in the Philippines covering the risks of the typhoons andearthquakes to which that country is prone.
We intend to create BCPs for other locations as well, including the
US and China. At business sites where a BCP is already in place, we will
systematically implement initiatives designed to increase the plans’
validity (business continuity management (BCM)) through various
activities, such as conducting safety confirmation and evacuation drills,
building emergency stockpiles for stranded commuters, retrofitting
company buildings for seismic safety, and more.
We also will provide the suppliers of the materials and parts used in
our products with any assistance they might need to develop a BCP
with a focus on maintaining the supply chain.

CSR efforts and the creation of corporate value

Poverty, energy problems, environmental destruction, and food crises
are currently challenges of global scale, and these issues cannot beignored by the NKC Group and its global operations. That is why wesupport the United Nations Global Compact (UNGC) in April 2015 andbecame a signatory to it. We have aligned our Group’s CSR activities
with the UNGC’s ten principles in four focus areas (see Page 5).
Our initiatives are directly linked to enhancing our corporate value.
At the NKC Group, maintaining corporate integrity is a top priority. We
focus on compliance management in a broad sense that aims to ensure
legal compliance and fulfills wider social responsibilities while maintaining
high ethical standards (i.e. integrity management). With this in mind, weare focusing on the following key initiatives across the Group.
1. Build an open organizational structure through organizational reforms
2. Fulfill our social responsibilities at all NKC Group companies aroundthe world
3. Raise compliance awareness among NKC Group employees
4. Conduct internal audits to eliminate legal violations and misconduct

Summary

To this point, I have touched on various issues facing us and coveredsome of our policies. FY2016 marks the second year of our fourth
midterm business plan (FY2015–2020). We will continue to aim high so
we can hit our sales target of JPY 100 billion. All of our employees are
expected to actively accept the challenges while remembering ourgroup vision of becoming “a company that constantly reinvents itself
and one that its employees are proud to be a part of.”The outlook for the world economy is still cloudy and, as a player inthe global economy, the NKC Group will remain flexible and alert tochanges in the marketplace so that it can quickly respond to immediateneeds.

Personnel development and work–life balance

Hiring and retaining excellent human resources is requisite for acompany’s sustainable growth. That is why we continually step up ourUnited Nations Global Compact
The NKC Group signed on to the United Nations Global Compact in April 2015 in support of its ten principles.
(See page 5 for more information about the ten principles.) The Global Compact is an initiative that encourages
businesses and organizations to take voluntary actions to solve problems facing the world. Its ten principles
cover the areas of human rights, labor, the environment, and anti-corruption.

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NKC CSR REPORT2016

NKC’s CSR Policy
Our mission is to develop and provide products and services that are economically, environmentally, socially superior, and safe to provide thorough satisfactionand earn public trust. We respect the cultures and customs of the countries and regions where we operate and we contribute to their development.

NKC Vision

NKC Vision“A company that constantly reinvents itself and
one that its employees are proud to be a part of ”
NKC Code of Conduct
1. Principal Mission

6. Social Contributions

2. Compliance with Laws and Social Norms

7. Opposition to Antisocial Influences

3. Information Disclosure and Information Handling

8. International Contributions

4. Providing a Good Working Environment

9. Promoting Corporate Ethics

5. Environmental Protection

10. Enforcement

UN Global Compact’s Ten Principles compared to NKC Group’s Code of Conduct
United Nations Global Compact

Human rights

Principle 1: Businesses should support and respect the protection of internationallyproclaimed human rights andPrinciple 2: make sure that they are not complicit in human rights abuses.

NKC Group’s
Code of Conduct

1.4.6.8

Principle 3: Businesses should uphold the freedom of association and the effective
recognition of the right to collective bargaining and
Principle 4: the elimination of all forms of forced and compulsory labor,

Labor
Principle 5: the effective abolition of child labor, and1.4.6.8

Principle 6: the elimination of discrimination in employment and occupations.
Principle 7: Businesses should support a precautionary approach to environmental challenges,

Environment

Principle 8: undertake initiatives to promote greater environmental responsibility, and1.5.6.8

Principle 9: encourage the development and diffusion of environmentally friendly technologies.

Anti-corruption Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.

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NKC CSR REPORT
2016

1.2.3.6.7.8

NKC’sCSR Policy

Human rights/
labor practices

Environment

Local
community

CSR activities
outside Japan

Corporate
governance■ CSR Targets and Activities Implemented

We self-rated the outcomes of the activities implemented during the fiscal year on three-point scales. Please see the corresponding page for details about the activities.
Self-grading scale 100% achieved…◎ Mostly achieved…○ Somewhat achieved…△

Human rights/labor practices

FY2015 focus areas
Respect for human rights
Education/consciousnessraising•Operate an internal compliance hotline•Address SDGs

Human resources development •Actively recruit people who have studied abroad•The current reporting process must be revised to reflect the revamped internal organizational structure, which will bedone in the coming fiscal year and yearly thereafter.
•We gathered information on the global issues highlighted by the UN. We will consider implementing policies on humanrights in hiring and the workplace.

○•Organize a management workshop for mid-career
employees and select new business proposals•A new business proposal was selected from among those submitted by the participants. We will start work on realizing
this proposal in the new fiscal year.

◎•Actively recruit female employees•Apply for Kurumin certification•Operate in-house daycare facilities•Encourage employees to take childcare leave•Using special recruiting tools and fairs, we hired female employees for the fifth consecutive year.
•We implemented a reduced work hours program to help employees achieve a better WLB. The program will become
available next fiscal year.
•The Head Office and three domestic plants continued to operate daycare facilities to help female employees return towork after giving birth.
•The childcare leave rules were revised.

◎•Create comfortable working environments across theGroup, including new subsidiaries•A new subsidiary participated in the review committee and two new subsidiaries are expected to join next fiscal year. We willcontinue to improve facilities and create better working environments while ensuring that our progress is at the same paceacross all of our business sites.

◎

Optimizing work hours•Aim for zero overtime and encourage employees to takepaid leave•Reducing total working hours was one of the managers’ targets, and most of the departments achieved that target. We
will reduce the target total working hours even further in the next fiscal year.

○

Promoting healthy minds andbodies•Provide regular/special health examinations•Provide mental health examinations•An in-house nurse provided follow-up interviews after the health examinations. We also implemented
consciousness-raising activities designed to teach employees how to cope with seasonal health problems and similar
health concerns.
•All employees received mental health examinations with individual follow-up consultations by health experts.

○•Add new subsidiaries to the Organization for Safety and
Health Committee•With our two new subsidiaries, we now have an organizational structure in place to address issues across the Group,
including our affiliates.

○

Internal auditing•Conduct safety patrols•Conduct internal audits led by the Head Office’s Safety
and Health Division•Regular internal patrols were conducted at each business site to identify unsafe aspects of the sites that need
improvement. Internal audits were conducted by the Head Office to assess legal compliance.

Awards•Confer No Accident Awards•Three domestic and two overseas locations were awarded for having zero accidents during the year. Awards also wereconferred to subcontractors.

◎

Education/consciousnessraising•Provide education/training to personnel licensed toperform hazardous work
•Conduct fire drills•Fire patrols•Safety and health patrols•Implement the Potential Hazard Report•Conduct in-house road safety seminars•Education on seven types of highly dangerous work was provided to relevant personnel.
•Evacuation drills were conducted according to the internal manual. Drills were conducted at night at the business sites
where employees work in two shifts.
•Safety of the evacuation routes (equipment and so on) was ensured via internal patrols and statutory inspections.
•Noise and lighting levels were assessed to ensure comfortable and healthy working environments.
•We collected information from employees about potential hazards in the workplaces to make improvements. Employees
who provided excellent suggestions were given “of the year” awards.
•Road safety seminars were conducted for those employees authorized to drive a company car.

○

•Add new subsidiaries to the environmental management
organization•With our two new subsidiaries, we now have an organizational structure in place to address issues across the Group,
including our affiliates.

○•Conduct an audit by an ISO certification body
•Implement internal audits by environmental officers•A certifying body audited the ISO-certified plants, all of which were in compliance.
•In-house auditors conducted internal audits of all non-ISO-certified business sites, and all business sites were found toadhere to the same environmental standard.

◎•Ensure compliance with the revised CFC emissions law•Remain compliant with the various environmental
regulations•Verify the on-site industrial waste disposal contractors•Internal management standards were created and implemented in response to the April 2015 revision.
•We conducted regular monitoring and assessments of noise, vibration, and water quality and reported the results to thegovernment. Although there was a business site where measurements slightly exceeded the regulatory limits, measures
were immediately taken to correct the problem.
•We checked 15 contractors on-site and encouraged them to be certified.

○Education/consciousnessraising•Provide education/training to licensed personnel•Provide general environmental education/training•Provide special environmental education/training•We appointed licensed employees to relevant positions as required by law and added their names to the database.
•We provided all plant employees with basic environmental management education.
•We provided personnel who handle dangerous and hazardous materials with regular follow-up education.

Proposals for improvements•Select an environmental award winner•Promote eco-activities in each workplace•The environmental award was conferred on the business site that excelled at actively and effectively implementing
initiatives to improve the environment, such as saving energy and reducing waste. The annual presentation of the award
has helped increase environmental awareness.
•Each workplace formed an eco-team to implement small-group environmental initiatives.

○•CO2 emissions have been reduced 6.5% year after year. Demand monitoring was implemented to reduce power
consumption during peak use periods.
•We implemented the Cool Biz and Warm Biz campaigns.

○

Waste reduction•Continue zero emissions•We achieved zero emissions for the ninth consecutive year since 2007 because of regular efforts to eliminate emissions(zero waste).

◎

Carbon offsetting•Promote the use of company vehicles (eco-cars)•We worked on carbon offsetting via the use of Head Office vehicles (eco-cars).

•Coordinate the community outreach programs of thedomestic business sites•Start coordinating initiatives of the new subsidiaries•Community outreach programs were implemented across our domestic business sites according to the original plan.
•We assessed the initiatives of the two new subsidiaries, which will be included in the overall plan beginning in the next
fiscal year.

◎•Provide support to areas affected by natural disasters(around the world)•We donated relief money to Nepalese earthquake victims. Employee volunteers also raised relief funds.

◎•Donate emergency stock to local communities•Rechargeable batteries and emergency food supplies were donated to Osaka’s Kita Ward Office. We will propose additional
support for areas outside Osaka to increase their disaster preparedness starting in the next fiscal year and thereafter.

◎

Cleanup activities•Conduct cleanup activities in regions where we operate•Local cleanup activities were conducted at all of the domestic business sites. There were some months when no employees
participated in these activities, so we will ensure that everyone is aware of the initiative across the company and continue
implementing it.

○

Promotion of education•Provide scholarships to selected students•Host a social gathering for university undergraduate andgraduate scholarship students•Provide research grants to selected researchorganizations•We did not get as many applications as we had planned for by recruiting candidates from the designated school system. We
will investigate ways to achieve our target, including reviewing the designated schools involved in the recruitment process.
•We hosted a company information session and social gathering for undergraduate and graduate scholarship students to
help them with their job searches and business careers.
•Five research institutions were selected as planned. They submitted reports on their research findings at the end of the
fiscal year.

○•Operate an internal control system•The current internal control system must be revised to reflect the revamped internal organizational structure, which will bedone in the next fiscal year and yearly thereafter.

○•Audit the domestic business sites for subcontractor
transactions•Internal audits were conducted at eight domestic business sites, including subsidiaries, in light of the Subcontract Act, toassess compliance.

◎•Provide CSR training for new employees•Conduct an internal seminar concerning the
Subcontract Act•Provide education and raise awareness about security
export controls•A CSR (including compliance) seminar was conducted for new employees.
•An internal seminar on the Subcontract Act was conducted for employees assigned to process payments, which
provided an overview of the Act and company-specific aspects of it that need to be noted.
•We encouraged export control personnel to attend an external workshop for consciousness-raising.

•Implement BCM at business sites where a BCP isoperative•Have new subsidiaries develop BCPs
•Have overseas business sites (two in the Philippines)
develop BCPs

•Safety confirmation tests were conducted at all domestic business sites. A radio system was implemented forlocation-to-location communications. Failing to manage the progress of each business site, we will provide follow-up
support according to the annual plan beginning in the next fiscal year.
•A BCP was developed at a new subsidiary. A BCP will be developed at another subsidiary in the next fiscal year.
•A BCP was developed at two business sites in the Philippines. They will continue these efforts by creating related
documents in the next fiscal year.

•Improve email security•Develop an information security policy•Email security was improved via encryption of email data (including attachment files).
•The Head Office developed a policy and conducted an internal briefing session to be implemented Group-wide in FY2016.

Management workshop

Diversity

Enhancing employee benefits

Safety and healthManagement system

Environmental management
Management system
AuditsLegal compliance

Environmental protection activities •Reduce CO2 emissions

Measures against climate change •Promote the Fun to Share campaign

Local community

Rating•Conduct initial training for new employees•Conduct target management training for employees
newly appointed to core positions•Provide new employees in the Philippines with English
language training

Training according to employee •Conduct training for executive candidates•Conduct training for first-year employees
grade/post

Work–life balance

Activity management
Promotion organization

Local contribution
Support for disaster-hit areas
Improving local disaster
preparedness

Nakanishi ScholarshipFoundation

Corporate governanceSelf-assessment of implemented activities•We will continue to work to recruit people with study abroad experience because the number of those hired during the pastfiscal year was low.
•In addition to language training, participants were given an opportunity to tour the Philippine plant and learn about the work
style of our overseas location.
•Next-generation leader training was conducted for a select group of employees to impart strategic planning skills andbuild interdepartmental relationships.
•Training was provided to second-year employees to teach them about work-flow and problem-solving methods.
•Training was provided to new employees to teach them the basics of working at NKC.
•Training was conducted on setting and managing targets.

Hiring/training people with
global business skills

Empowering women

Environment

Implementation planInternal controls

Internal control system
Internal auditing

Compliance
Education/consciousnessraising

Risk management
Business continuity planning

Information security

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2016

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Human rights/
labor practices

The NKC Group complies with relevant laws and internal rules, respects thehuman rights of all persons, and works to maintain and improve working
environments that are safe and comfortable for mind and body.

We promote a clear understanding of human rights issues and foster respect for others while helping employees realize a healthy balance between work and life
so that each one can be financially independent and lead a healthy and diverse lifestyle. We also maintain and promote a company-wide occupational safety
and health management system that puts safety first with a focus on achieving zero accidents.

Respect for human rights■ Education/consciousness-raisingInternal compliance hotline

Addressing SDGs

As part of our efforts to ensure compliance, wedeveloped and implemented the Compliance
Violation Reporting Rules. The Rules enable our
employees to quickly and consistently reportcompliance violations to the company so thatthe company can take appropriate action.
Employees can contact the external compliancehotline to report sexual or power harassment
incidents or other violations that they areuncomfortable reporting to the company. We
will modify the reporting system as necessary to
improve its functionality and efficiency.

In September 2015, the members of the UN
General Assembly adopted the Sustainable
Development Goals (SDGs) as global goals to beachieved by 2030. The SDGs comprise 17 goals
and 169 targets for solving serious global issues,
such as extreme poverty, inequality, and injustice.
The UN Global Compact also addresses theSDGs, and, as one of its signatories, we will
investigate ways that we can help solve these
global problems through our business activities.
* SDGs: Abbreviation of Sustainable
Development Goals

Human resources development■ Hiring/training people with global business skills
In an effort to bring more people with global
business skills into our workforce, we are actively
hiring those with study abroad experience. We

are providing new employees in the Philippines
with English language training as part of ourregular human resources development efforts.

■ Training according to employee grade/post
Next-generation leadership training

New employee training

We conducted next-generation leadershiptraining with a focus on training managerial
candidates. The training took about six months
and focused on the basics of leadership,
management, and personnel development. The
training provided participants with a meaningful
opportunity to share information and connect
with each other across divisional anddepartmental boundaries. We will continue tosupport employees’ professional development
through similar trainings.

Training was provided to new employees shortly
after they joined the company. It focused ongood business manners, English language skills,
employee rules, CSR, and safety and health.

Training for second-year employees
Follow-up training was provided to employees
entering their second year with the company.
Conducted every year, this training is designed toprovide a review of the company’s basic
operation and communication procedures.

■ Management workshop

The management workshop was launched in
FY2011
toimprovetheprofessional
development of mid-career employees who are
the future of our company. Designed to impartmanagerial perspectives and business planningskills, the workshop enables participants toTarget management training for
employees newly appointed to Grade1 core positions

New employee training

This yearly training, focused on target
management, is provided to employees newly
appointed to core positions. After participating in
the training, the employees set targets for theirdepartments and their supervisors monitored
their progress. We will continue to provide thistraining to help core employees increase theirawareness of their responsibilities, setappropriate targets, and achieve their goals.

develop a long-term vision, aggressive attitudes,
skills for developing long-term strategies, andother relevant capabilities. Mid-career employees
across the company come together in thisworkshop and work to develop a new businessplan over a six-month period.

07

NKC CSR REPORT
2016■ Outcome of the management
workshopWorkshop participants delivered
presentations at an executive meeting
to demonstrate the skills they had
gained in the workshop. Their
presentations were evaluated in terms
of profitability, feasibility, and growthpotential.

NKC’sCSR Policy

Human rights/
labor practices

Environment

Local
community

CSR activities
outside Japan

Corporate
governanceDiversity■ Empowering women

Efforts were made during FY2015 to bring more
women into our workforce. To promote ourcompany to women, we developed brochures
and tools targeting female students, participatedin job fairs for female students, and heldcompany information sessions at women’scolleges. We have hired female employees overthe past five years, and we will continue torecruit excellent human resources regardless ofgender.

operating at four locations: Mie Plant, Head
Office, Osaka Plant, and Nabari Plant. As of
March 2016, seven employees at the Head
Office were using its daycare facility. By
responding to a service request received on
short notice and a request for temporary
services, the facility has earned high marks fromits users. We plan to open daycare facilities atother locations in response to employees’
needs.

Applying for Kurumin certification

Encouraging employees to takechildcare leave

We aimed to obtain Kurumin certification for
April 1, 2014 to March 31, 2016 under Article
13 of the Act on Advancement of Measures to
Support Raising Next-Generation Children. To
that end, we developed a general employer
action plan and implemented measures toachieve the goals of the plan, including reducing
overtime hours, encouraging employees to takeannual paid leave, and so on.

In-house daycare facilities
We have been operating in-house daycare
facilities since November 2008 when the firstone opened at the Mie Plant. They are now

The childcare leave rules have been revised to
grant five days paid leave* for childcare when it
is taken within eight weeks of the birth of achild. We expect that this revision will encourage
male employees to take childcare leave. In
FY2015, more than 90% of female employees
who gave birth to a child (including those at the
Nabari Plant) took maternity and childcare leave.
We also extended the period when employees
who are parents are exempt from working
overtime to include those with children aged
three years to entry in elementary school.

Recruitment poster targeting female students■ Percentage of NKC employees
taking childcare leave
Employees who took Employees who took
only maternity leave childcare leave

10%

90%

* Because female employees take maternity leave foreight weeks after giving birth, only male employees
who are new fathers are eligible for this leave.

Work-life balance■ Enhancing employee benefits
Improving workplace environments

The Workplace Improvement Committee wasformed in 2011 to create better working
environments. With the addition of the plantsthat became NKC’s consolidated subsidiaries,
the Committee’s sphere expanded to include
seven regions in FY2015 and will further expand■ Optimizing work hours

The NKC Group is committed to optimizing
work hours. In FY2015, we aimed to reduce thetotal annual working hours to 1,840 with zero
overtime and 10 days of annual paid leave.
During the year, 43.5% of all departments■ Employee comments

to eleven regions in FY2016. The committee
incorporates feedback from employees to make
improvements on a regular basis. We willcontinue our efforts to improve workplaceenvironments in response to various needs,
such as a need to accommodate larger andmore diverse workforces.

achieved 1,840 hours or fewer working hours
and 53.2% achieved 1,850 hours. Our target for
FY2017 is 1,740 total annual working hours withzero overtime and 20 days of annual paid leave.

I gave birth to my second child inJanuary 2014 and returned to work
the following year. Since then, I’ve
been taking advantage of the
in-house childcare services at the
Head Office as well as the reduced
work hour program. I always makesure to share information on the
progress of my work with myco-workers in case something comes
up, like my child falling ill. Although
juggling work and childcare keeps mevery busy, having a rewarding career
enables me to focus on my children.

Kayoko Omi
Conveyor Division■ Health examinations of the mind and the bodyWorking with an industrial physician, we
conducted regular and special healthexaminations and post-examination follow-ups
by a Head Office nurse (to raise awareness oflifestyle-related diseases). In FY2015, theFeedback from an in-house
daycare facility user

training provided to new employees focused on
mental health and self-care. Private counselingby an industrial health specialist is provided atevery business site as part of the mental healthexaminations.

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NKC CSR REPORT2016

Human rights/labor practices
Safety and health■ Management system

Policy: Safety first

We have an internal organization for safety and health thatencompasses all of our business sites including the affiliatedcompanies’ factories. The Head Office’s Safety and Health Division isa general administrator that implements and coordinatescompany-wide initiatives under the leadership of the president. Safety
and health Committees (focusing on safety, health, fire protection,
traffic safety, hazard prediction, and so on) have been formed at ourplants and they inform the employees of specific initiatives alignedwith corporate policies. In FY2015, Suda Shoji Corporation and Fuji
Honing Industrial Co., Ltd., which became our consolidated
subsidiaries through mergers and acquisitions, have joined in ourefforts.

1. We ensure that all equipment is completely safe and eliminate allaccidents caused by unsafe behaviors.
2. We comply with the Industrial Safety and Health Act, relevant laws
and regulations, and internal safety rules.
3. We create comfortable working environments by improving work
areas and operations.
4. We promote health management and mental health activities toreduce sick leaves and boost employees’ health.
5. We implement fire and disaster prevention measures and ensurerisk management.
6. We maintain high ethical standards for traffic safety and raiseawareness of safe driving.

■ Internal auditing■ Awards programs
Zero accident awards

Regular patrols are conducted at each business site based on thesafety and health management system to identify and improve unsafe
practices and conditions. The Head Office’s Safety and Health Division
conducts annual internal audits on specific focus areas. The internal
audit for FY2015 focused on legal compliance (qualifications,notifications, and so on), crane and chain blocks (signs, maintenance,
operation, and so on), hazardous materials (supervisors, signs,
postings, ventilation equipment, storage conditions, and so on), shot
blasting (dust control), and other relevant areas. As of FY2015, Suda
Shoji Corporation and Fuji Honing Industrial Co., Ltd., were included
as business sites subject to our internal auditing.

The numbers of accidents of near-injury or worse are annually tabulated
at each business site. Plants that achieve a zero accident record for agiven year receive an award and all of that plant’s employees are givena memento of the achievement. The award winners for FY2015 were
the Head Office, the Nabari Plant, the Kawachi Plant in Japan, and
NDC and NFC in China. An award also was given to a subcontractor
that installs conveyors.

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NKC CSR REPORT2016

NKC’sCSR Policy

Human rights/
labor practices

Environment

Local
community

CSR activities
outside Japan

Corporate
governance■ Education/consciousness-raising
Education and training for licensed personnel

safety training before engaging in any of the seven high-risk jobs.
Providing hands-on training to licensed employees on a regular basis
helps them improve their skills and increases operational safety. In
FY2015, safety training was provided in the following seven areas.

We identified seven shop floor jobs with particularly high risk (see thediagram below) and provided the employees of those jobs with safety
training. Our internal rules require employees to complete annual

Priority 7 works
1. Operating forklifts
2. Operating cranes
3. Rigging slings
4. Pressing work (including
mold mounting adjustment
and removal)

Safety training for grinding stone change-out
at the Head Office

Welding training at the Nabari Plant

Safety training for rigging slings and operating
cranes at the Mie Plant

Arc welding training at the Shiga Plant

Forklift safety training at the Kawachi Plant

Press safety training at the Osaka Plant

5. Changing out and testing
grinding stones
6. Gas and arc welding
7. Operating (including
inputting commands forand calibrating) industrial
robotsFire drills

Hazard identification

Every business site in the NKC Group prepares a manual for reporting
first response firefighting and evacuation procedures. Every businessperiodically conducts fire drills based on fire defense plans. Businesssites where employees work night shifts conduct drills during the day
and at night to ensure that all employees are familiar with theirprocedure manual.

Our factory workers are required to participate in hazard prediction activities
to prevent work-related accidents. Hazard prediction training is provided to
selected employees every year to help them develop alertness to hazards
through group activities. When an employee identifies a hazard, it isreported to the company via the Potential Hazard Report. Information about
the identified hazard is shared with the Head Office, which assesses the
improvement measures to be taken. Hazard prediction reports are evaluatedyearly in terms of alertness and hazard levels. High-scoring plants areawarded prizes with mementos of the achievement. In FY2015, the Shiga
Plant won the grand prize because it
pointed out the hazard associated withworking in high places using a stepladderand it proposed solutions, which
contributed to increased safety on the
shop floor and in the work processes.

Fire patrols
Every business site conducts regular patrols to assess the storage
conditions of hazardous materials in the factory; the locations of fire
extinguishers, fire hydrants, and location signs; the designation ofevacuation routes; the handling of electrical heating equipment; andthe conditions of the smoking areas.

Safety and health patrols
In an effort to maintain optimal workplace environments without
inhibiting employees’ health, comfort, and productivity, we assess
environmental factors at our
offices and factories in accord
with legal regulations, such as
noise levels, vibrations, andlighting. We also work withservice providers to maintainhealthyenvironments
byFire extinguisher drill at the Head Officeregularly inspecting the generaland local ventilation systems
and testing the drinking water.

Safe driving awareness

Hazard prediction training

Consciousness-raising activities for employees are implemented on aregular basis to achieve zero traffic accidents when employees are driving
company or private vehicles (including bicycles) or walking to and fromwork or other destinations. In FY2015, as always, we routinely ensured thatvehicle operators were wearing seatbelts or helmets, informed all
employees of the speed limits on company premises, and required all
vehicle operators to carry appropriate insurance coverage. Employees withhigh-quality road safety behavior wererewarded. The Head Office, where thesafe driving supervisor works, organizedin-house road safety seminars with thecooperation of local police, and it
participated in a safe driving contest to
In-house road safety seminarraise awareness of safe driving behaviors.

Evacuation drill at the Nabari Plant

10

NKC CSR REPORT2016

Environment

The NKC Group is committed to protecting the environment andreducing our environmental footprint to help build sustainable societies.

We set high goals for maintaining and improving the environment. Our business operations focus on using technologies that reduce environmental load throughout the
product life cycle and ensuring that saving energy, reducing waste reduction, recycling, and other environmental initiatives are implemented across the company. We also
place importance on working with local communities, and we try to help improve the environment in everything we do, regardless of its relationship to our business.

Environmental management■ Management system

Internal audits by environmental officers
Our domestic plants that have not achieved ISO
14001 certification have established environmental
management systems comparable to those of theISO-certified plants. Internal audits are regularly
conducted at these non-ISO-certified plants to help
them to consistently implement environmental
improvements. Our overseas plants also are working■ Legal compliance

Compliance with the revised CFC
emissions law
The Fluorocarbons Recovery and Destruction Law,
enacted in April 2015, underwent major revisions.
The revised law now in effect is the Fluorocarbons
Emission Control Law. The NKC Group uses some
HVAC equipment and testing devices in the Class 1
category of products regulated under the Law. In
response to the revision, which requires regulartesting of these items, the NKC Group immediately
created standardized procedures and implemented
them across the Group to fulfill its complianceobligations.

Compliance with environmental regulations
Our business sites subject to the regulatory
requirements of the Noise Regulation Act, Vibration

Top management

Environmental Management Committee Chairman
Administrative
officeDomestic plants and affiliates
Environmental Management Committee Chairman/
Environmental Management Committee

to improve the environment and regularly share theirprogress with the Head Office via teleconferences.
Head Office environmental management personnel
visit our overseas plants about every two years foron-site assessments and follow-ups.

Regulation Act, and Sewerage Act monitor andassess the relevant noise levels, vibrations, andwastewater quality at required intervals and reporttheir results to the government. In September 2015,
the phosphorus concentration in wastewater at the
Osaka Plant exceeded the legal limit. Although theconcentration level did not pose an immediate threat
to the environment, the plant immediately tookcorrective actions, eliminated the cause, and reported
it to the government. To monitor its environmental
measurements, the plant now measures its
concentration levels in-house on a weekly basis inaddition to the monthly assessment routinely
performed by a specialized service provider. There
were no other incidents regarding concentration levels
exceeding legal limits.

11

NKC CSR REPORT2016

NSC (Sweden)

NFC (China)

NWC (China)

NDC (China)

NPC (Philippines)

NAI (U.S.A.)

NMC (U.S.A.)

Fuji Honing

Suda Shoji

Shiga Plant

Kawachi Plant

Mie Plant

General, Safety, Health and Environmental Management Committee

Nabari Plant

Our ISO 14001-certified business sites have achieved
environmental targets aligned with the NKC Group’s
environmental policy, established environmental
management systems, and are making regular efforts
to maintain and improve their systems. Internal
environmental auditors conduct regular internal audits
to evaluate the effectiveness of the environmental
management systems. The systems also are audited
every year by a third party certification body. The
annual audit for FY2015 found zero non-complianceincidents, demonstrating the effectiveness of theenvironmental management systems.

■ Environmental management system

Osaka Plant

Results of audits by ISO certification body

1. Implement, maintain, and continually improve the existing environmental
management system.
2. Prevent environmental pollution by complying with regulatory requirements forenvironmental aspects of the businesses.
3. Provide environmental training to all plant employees and inform them of theenvironmental policy.
4. Build production systems that minimize our environmental footprint with a focus on
resources, energy, pollution, industrial waste, and so on.
5. Cooperate and actively participate in the environmental protection activities ofnational, regional, and local governments.

Temma Sheet Metal■ Auditing

Environmental policy
The policy is to protect the global environment by reducing the environmental load imposed byour products, services, and business operations in Japan and abroad.

Head Office

Headed by the chairman of the Environmental
Management Committee, the General Commission on
Work Safety, Health, and Environments is acompany-wide organization comprising environmental
management representatives and environmental
managers of the NKC Group’s domestic plants. The
Head Office’s Safety and Health Division and its
Environmental Management Department are theCommission’s administrators. The primary objectives
include sharing information, managing progress onenvironmental initiatives, implementing initiatives acrossthe company, and ensuring compliance with revised laws
and regulations in accord with our environmental policy.

Overseas plants and affiliates
Environmental Management Committee Chairman/
Environmental Management Committee■ ISO 14001 certification
Domestic plantYear certified

Osaka Plant
Mie Plant
Nabari Plant

2006

Temma Sheet Metal’s EPD Room2009

Suda Shoji

2005

Fuji Honing

2015

Overseas plants

Year certified

NWC

2011

NSC

2015

Internal audit at the Shiga Plant

NKC’sCSR Policy

On-site assessment of industrial waste
disposal contractors
The NKC Group conducts on-site assessmentsof the companies to which it outsourcesindustrial waste disposal, which is required by its
internal rules, and it has been conducting theseassessments annually since 2008. In FY2015,
we visited 15 companies and verified that they
were appropriately disposing of the industrial■ Education/consciousness-raising
Education and training for licensed
personnel

Environmental regulations require companies thatmeet certain criteria to appoint licensed personnel
as environmental managers responsible forpreventing pollution and/or reducing environmental
impact. The NKC Group appoints employees tothese positions as required. Information on ourlicensed personnel is centrally managed in a
database to increase the number of licensed
individuals in our workforce.

General environmental education/training
It is crucial to provide relevant employees witheducation and training to raise their awareness ofenvironmental activities, improve their capacities
to work in specific areas, and to continually
implement our initiatives for improving theenvironment. The NKC Group provides
environmental education and training as part of its■ Proposals for improvement
Environmental grand prixThe environmental grand prix was launched in
FY2001 (to reward initiatives implemented in
FY2000) to promote and embed environmental
activities across the Group. The award is given
to business sites that have achieved excellent
results. Every year, business sites are rated on
their environmental performances in terms ofenergyconservation,
waste
recycling,
environmental
improvement,
and
other
noteworthy initiatives. The business site with thehighest score wins the award. The winner in
FY2015, which marked the award’s 15th
anniversary, was the Nabari Plant. All of its
employees were given a memento of theirachievement (assorted household laundry
products).

Human rights/
labor practices

Environment

waste in their final disposal routes and in thesecondary processing phase. We promote hiringof government-certified industrial waste disposal
companies and encourage non-certified service
providers to become certified. Beginning in
FY2016, we will update our current checklist to
increase its details to achieve stronger
comprehensive assessments.

Local
community

CSR activities
outside Japan

Corporate
governance

Testing equipment designated as
Class 1 products

environmental management system and manages
records related to education and training in acentral database.

Special environmental education/training
We engage in specific operations, such as thehandling of hazardous substances, which could
significantly influence the environment in the eventof a leak or other emergency. We have designatedthese operations “special environmental operations”
and we provide relevant education and training. By
stipulating rules that allow only those employees
who have completed specified training and who
have been registered as licensed personnel inaccord with our internal rules to engage in suchoperations, the NKC Group fulfills its obligations as
a company that handles hazardous materials.
Beginning in FY2016, the Group will provide training
designed to help licensed employees improve theirknowledge in specialized areas.

initiatives aim to transform employees’ relevant
questions while working, such as “isn’t thiswasteful?” into improvements. Some examples
of initiatives undertaken so far are selling used
gloves that are reusable as valuable materials,
eliminating memo pads by effectively using
whiteboards, and reducing the number ofcardboard pads used by changing the packing
method. These activities help employees
increase their environmental awareness when
they regularly practice them.

Eco-activities
In addition to company-wide efforts to improvethe environment, the NKC Group focuses onenvironmental initiatives at the factory floor level,
and it has implemented eco-team activities andan improvement suggestion program. These

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NKC CSR REPORT
2016

Eco-driving training

Environmental grand prix certificate

NKC’sCSR Policy

Human rights/
labor practices

Environment

Local
community

CSR activities
outside Japan

Corporate
governance

Environmental protection activities■ Measures in response to climate change
CO2 emissions reduction

Participation in the Fun to Share campaign

Reducing greenhouse gas emissions is achallenge that must be addressed globally to
successfully fight climate change. At the NKCGroup, we have been working on reducing CO2
emissions to help curb global warming. In
FY2015, the total emissions from our domestic
operations had decreased by 6.5% year afteryear. Major relevant activities undertaken by ourplants are described below. Demand monitoring
was introduced at all of the plants to reduce
electricity load, which enabled them to cut
power consumption during peak use periods.

The NKC Group supports the Fun to Shareprogram promoted by Japan’s Ministry of theEnvironment toward creating a low carbon
economy. The program provides companies,
organizations, and local governments that
support its objectives with a platform on which
to widely share technologies, wisdom, andinitiatives that contribute to the creation of a low
carbon economy and support for the
implementation of effective initiatives. Also in
FY2015, the NKC Group participated in the
Cool Biz and Warm Biz campaigns as part of its
efforts aimed at reducing CO2 emissions.

■ CO2 emissions reduction activities in FY2015
Plant

Main activities

Head OfficeUpgraded motors to high-efficiency motors, replaced fluorescent lighting with LED lighting, and installed secondary glazing windows

Osaka Plant

Insulated plant roofs and exterior walls, and replaced fluorescent and mercury-vapor lighting with LED and electrode-less lighting

Nabari Plant

Replaced hydraulic injection molding machines with all-electric machines, upgraded motors to high-efficiency motors, and installed new air conditioning

Mie Plant

Replaced high-voltage transformers with amorphous transformers, and replaced fluorescent and mercury-vapor lighting with LED and electrode-less lighting

Shiga Plant

Replaced fluorescent and mercury-vapor lighting with LED and electrode-less lighting, and replaced cranes with those equipped with an inverter

Kawachi Plant

Replaced hydraulic injection molding machines with all-electric machines, planted vegetation for shade, and replaced fluorescent lighting with LED lighting■ Waste reduction

The NKC Group has long been working to
reduce industrial waste. Since achieving zero
emissions in FY2007, all of its plants havemaintained a zero-emission status to date. The
table below shows the waste reduction activities
implemented at each plant. Hailed for its

outstanding waste reduction performance, theNKC Group was invited to present some of its
waste reduction initiatives at a seminar for waste
management supervisors of special-use
buildings hosted by the Osaka municipal
government in FY2015.

■ Waste reduction activities in FY2015
Plant

Reduced acidic and alkaline waste via process improvements

Osaka Plant

Reduced sludge volume by changing the wastewater treatment method, and reduced alkaline waste using a concentration device

Nabari Plant

Distilled, recycled, and reused waste oil from a degreasing unit and reduced spools by changing the mold structure

Mie Plant

Reduced pollution by eliminating surface treatment and reduced waste oil by using a separator

Shiga Plant

Reduced wood waste by changing packaging procedures and reduced waste oil from cutting operations via process modifications

Kawachi Plant

Reduced plastic waste by improving the resin recycling rate

■ Reducing environmental impact of products and business operations
Carbon offsetting

In FY2015, we continued the work on carbon
offsetting as in FY2014. Twelve of the 14
company cars used at the Head Office are
eco-cars, nine of which use gasoline and lightoil. The amount of fuel consumed by these cars
is equivalent to 32 tons of CO2 emissions per

Presentation at the waste management
supervisor seminar

Objective of the Toki
Forest Credit program

Main activities

Head Office

Cool Biz and Warm Biz poster

year. This entire amount was offset via Niigata
Prefecture’s Toki Forest Credit program. The
NKC Group plans to continue working on thisinitiative in the next fiscal year and thereafter.

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NKC CSR REPORT
2016

Keep the forests of Sado
healthy to:
1. Absorb enough CO2 tocurb global warming
2. Help improve the natural
habitat of toki (crested ibis),which were reintroduced to
the wild, and protect thediverse forest ecosystem
3. Promote forest thinning
while revitalizing theforestry sector“Eco driver” and “carbon offset”
stickers affixed to company cars

Local community

As a good corporate citizen, the NKC Group supports thecultural and economic development of local communities.

We maintain open lines of communication with local communities to deepen mutual understanding and reach out to help them to identify and solve problems
with a focus on aiding their development.

Activity management■ Organizational contributions
As part of the NKC Group’s community

regularly collect feedback from local residents at

engagement initiatives, every domestic businessmunicipal offices and community associations insite sets a target contribution amount based onorder to respond to their needs.

its net sales, implements an action plan, andThese initiatives were implemented by the Headmanages its progress. To help build a sustainable

Office and some of the plants, and we willsociety, we contribute in a wide range of areas,

expand these activities across the entire Group,

includinglocalwith our affiliates slated to join the efforts

communities, philanthropic corporations andbeginning in FY2016, which will bring the totalorganizations, culture, art, sports, and more.

number of participating sites up to ten. In

Through the CSR Report questionnaire survey

FY2016, we will begin investigating coordinationand other media, we ask our employees about

of initiatives of the overseas sales and production

the types of initiatives they believe the Groupsites, which to date has only been in writing inshould implement so that we can incorporate

our CSR Report, on our corporate website, andtheir opinions into our future activities. We alsoso on.

theglobalenvironment,

Local contributions■ Support for disaster-hit areas

The NKC Group donates relief money to areas

donation

affected by natural disasters inside and outside

channels of the Nepalese government and it

Japan. In response to the massive earthquake

was used for reconstruction efforts.

that hit Nepal in April 2015, which caused

We will continue to provide disaster assistancedevastating damage to its capital, Kathmandu,

by donating relief funds and emergency supplies

and surrounding areas, the Group donated JPY

for victims of natural disasters whenever andone million through the Nepal Earthquake

wherever they occur.

wasdistributed

through

official

Victims Rescue & Help Association. The■ Enhancing local disaster preparedness
Donating emergency supplies to
Osaka City’s Kita Ward Office

we can consider the assessment results when

The natural disasters most likely to hit Japan are

Beginning in FY2016, our other business sites

earthquakes. Our business sites in Japan havewill conduct activities similar to those of thea high risk of experiencing an earthquake

Head Office because many of the local

because of their locations on fault lines or ocean

government-designatedtrenches. In response, we not only have a BCP

acrossin place across the company, we donate

stockpiles.

emergency supplies to local communities toNabari Fire Brigade

support their preparedness in the event of a

To improve their firefighting skills, Nabari plant

disaster.

food,

employees who are members of the local

rechargeable batteries, and other emergency

volunteer fire brigade participate in the annual fire

supplies worth approximately JPY 2.5 million to

hydrant operation contest organized by the local

Osaka City’s Kita Ward, where our Head Office

fire department. These employees work withis located, through the ward office.

other fire brigade members to improve their

We regularly assess the storage conditions ofresponse to fires should they occur on the plant’s

the emergency supplies donated by our Headpremises or in the event of a disaster near their

Office and their uses in local disaster drills andhomes.

In

FY2015,

wedonateddetermining our future contributions.

Japan

do

14

NKC CSR REPORT
2016

not

evacuation
have

centers

emergency

A letter of appreciation sent by
Osaka City’s Kita Ward Office* A BCP (business continuity plan) is a
strategy for ensuring that a business
continues to run in the event of a natural
disaster or other emergency. BCPs help
companies to prepare for disruptive events
before they occur so that their impacts
can be minimized if business operations
are interrupted.

NKC’sCSR Policy

Human rights/
labor practices

Environment

Local
community

CSR activities
outside Japan

Corporate
governance■ Cleanup activities
The NKC Group’s business sites are involved incleaning up the local rivers and lakes to benefit

cleanup activities in local neighborhoods. Thesethe communities and the larger regions in which

activities are voluntarily conducted by most of

it operates.

our Japanese business sites during local events,
monthly, or even on a daily basis. In addition toneighborhood cleanup, the Group emphasizes
Local cleanup activities are conducted
at all of the domestic business sites

Promoting education■ Nakanishi Scholarship
Scholarship programcommunication

The NKC Group runs the Nakanishi Scholarship

recipients and the Foundation directors andFoundation to support students who excel

administrators and provides an opportunity foracademicallypotential.

feedback about the scholarship program. The

Scholarship funds were provided to 106 seniorFoundation’s scholarship program has beenhigh school, technical college, undergraduate,

widely lauded because there are no special

and graduate students during the fiscal year. In

restrictions or conditions and it almost covers the

addition to providing scholarship funds, theentire basic tuition. Although the scholarships are

Foundation hosts an annual gathering for thecurrently awarded to students of designatedcollege undergraduate and graduate students

schools, the Foundation plans to add schools torecipients and a tour of the parent organization,that list in an effort to provide financial support for

the Nakanishi Metal Works, to give them insight

more students in need of scholarships.

anddemonstrate

among

the

scholarshipStudents taking a factory tour

into the world of work. The gathering facilitates

Participants at the gathering ofscholarship recipients and donors

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NKC CSR REPORT2016

CSR activities outside Japan
There are environmental and community engagement activities across the NKC Group, some of which are described below.

■ NKC OF AMERICA INC. HEADQUARTERS

participated in reforestation activities again in FY2015. The Philippines’
Department of Environment and Natural Resources (DENR) designates coffee
trees as an environmentally friendly
species under its greening program.
Since coffee beans grown through thereforestation activity are sold to Nestlé
Philippines, the program provides
highland farmers with a source ofincome, which benefits the local
Volunteers who participatedcommunity and the natural environment. in a tree-planting activity

Zero landfill recycling

NAI works with a recycling company to sort and separate types ofrecyclable waste to increase environmental awareness. Waste issorted into ten groups, including
paper, plastic, metals (by type),
drums, liquids (paint, solvent, andso on), e-waste,* and fluorescentlamps. NAI will maintain its efforts
to achieve its ultimate goal of
becoming a zero-landfill company.

(2) Community outreach

Waste brought to the recycling company

As part of its community outreach program, NPC is involved in volunteer
activities at Sapak Farm on Cebu Island. Founded by a priest, Sapak Farm is an
educational facility for children ages 11 to 20 years old who do not have accessto education because of poverty orother adverse circumstances. In
FY2015, some NPC employees and thepresident visited the facility andprovided meals for the children.
Everyone at NPC is working together tohelp less fortunate people work toward
NPC president and employees whotheir goals.
participated in the activity*E-waste: electronic devices, monitors, batteries, and other types of electronic waste■ NAKANISHI MANUFACTURING CORPORATION(1) Food aid for the poor

NMC donated 6,000 pounds (2.7 tons) of food to needy families,
bringing the total donations to the local food bank to 320,000 pounds.
NMC has won the food bank’s
food drive competition in the LargeGroup category (corporations with
100-plus employees) for threeconsecutive years. In 2015, thewife of a Japanese employee of
NMC received the Volunteer of theFood donated to the food bank
Year award.

■ NKC CONVEYORS PHILIPPINES CORP.
(1) Orphanage visit

Every year, NCP employees visit an orphanage
and donate money. The children at the orphanage
are always very happy to see the employees andhave fun interacting with them.

(2) Fund raising for the community
NMC donated USD 18,400 to the United Way of Northeast Georgia, a
local non-profit organization. Altogether, the company has donated
USD 239,000 over the past ten years. That non-profit organization
supports 29 human service programs, such as building homelessshelters and providing food aid for the needy, in eight counties,
including Athens, Georgia. NMC’s plant manager and personnel
general manager serve on the United Way’s Board of Directors. The
personnel general manager won
the Volunteer of the Year award in2015. Volunteers from NMC
planted flowers and trees andrenovated a garden for a girls’
shelter during the United Way Day
of Caring event.

(2) Donating school supplies
Many of the remote islands around Cebu Island
are educationally disadvantaged and many
children study in underequipped
Orphanage visit
small school facilities. Every year,
NCP donates electrical fans andpre-owned computers to theseschools along with notebooks,
pencils, and other school supplies
for the students.

(3) Book donations

Tree-planting volunteers■ NKC CONVEYORS (UK) LTD.
Going paperless to protect forests
With a focus on protecting forests,
NKC UK is downsizing its shelves
as it digitizes drawings anddocuments that have been
maintained as paper files. The
company plans to ultimately reducethe volume of paper files to lessthan one-half of its current size.

Book donations to elementary schools

NCP employees raise funds to buy books and donate them toelementary schools in and around Cebu City. During visits to theschools, the employees engage students in storytelling sessions(followed by quizzes) that help build solid relationships.

■ NKC MANUFACTURING DALIAN CO., LTD.
Neighborhood cleanup

NDC initiated a monthly neighborhood cleanup program in which all of
its employees participate. Although its objective did not initiallyresonate with all of the employees, after two years of continuous effort,
the program has made a clear
difference in the environmental
awareness of the employees andthe local communities. NDC willcontinue this initiative while taking
pride in being a good corporate
citizen.

Reducing paper files■ NKC MANUFACTURING PHILIPPINES CORPORATION(1) Tree planting

NPC has been planting coffee trees under the National Greening Program
initiated by the Philippines’ government. Led by their president, NPC employees

Cleanup activities

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NKC CSR REPORT
2016

Corporate governance

The NKC Group conducts its business operations
faithfully while complying with and respecting laws
and international standards.

In addition to ensuring compliance with relevant laws and internal regulations, we fulfill confidentiality obligations to our suppliers and clients in good faith to build
healthy relationships with them. We use information related to our operations only to properly conduct and manage our business to prevent loss, theft, orleakage. We disclose information in an adequate and timely manner while ensuring transparency. We also ensure that every employee maintains high ethicalstandards and strictly draws the line between private and public interests.

Internal controls■ Internal control system

The NKC Group recognizes corporate
governance as a key issue to be addressed
across the organization and constantly works■ Internal auditing

In FY2015, internal audits were conducted at
six business sites and two subsidiaries inJapan with a focus on ensuring fairtransactions with subcontractors. Although

to establish highly transparent and healthy
corporate governance systems and corporate
ethics.

fair subcontractor transactions are ensured at
all of our business locations, the Head Officeconducts internal audits on them to raiseawareness.

Compliance■ Education/consciousness-raising
CSR training for new employees

seminars bring relevant personnel together from

CSR training is provided to new employees toacross the departments, teach them theraise awareness about compliance and BCPs.

essentials of the law, and examine case studies

The NKC Group considers legal compliance anusing the textbook of the Fair Subcontracting

unquestionable obligation that employees must

Practices Promotion Seminar published by thefulfill when they perform their assigned duties.

Small and Medium Enterprise Agency and theTherefore, an awareness of saving lives andJapan Fair Trade Commission.

keeping the business operating during a disaster

Security export controls

to avoid inconveniencing customers is crucial for

Security export controls are imposed with aall business personnel. Rather than merely

focus on preventing weapons and civilian goods

imparting practical knowledge, the training

and technologies that could be used for military

focuses on examples of initiatives implemented

purposes from being sold to nations that develop

at our company and at other companies to help

weapons of mass destruction or to non-state

new employees gain a deep understanding.

terrorist organizations. To increase awareness ofInternal seminar on the Subcontract
Act

security export controls, employees whose

We cannot make our products without the help

regularlyofhealthy

conducted by the Center for Information on

relationships with our subcontractors, basic

Security Trade Controls (CISTEC) to ensure safe

seminars are conducted across the Group. The

and strong business practices.

subcontractors.

Tomaintain

New employees attending
compliance training

duties are relevant to the issue are encouraged toattend17

workshops

NKC CSR REPORT
2016

and

seminars

Japan Fair Trade Commission’s
textbook and in-house materials
used for the training

NKC’sCSR Policy

Human rights/
labor practices

Environment

Local
community

CSR activities
outside Japan

Corporate
governanceRisk management■ BCP activities
BCM activities

We are working on BCP to prepare thecompany in the event of an earthquake orother natural disaster.
In FY2015, as part of a consciousness-raising
activity, we promoted Secom’s safety
confirmation system, conducted an email
distribution test, and purchased additional
emergency stock. Multi-channel access radio
systems were implemented and tested
across
the
Group
for
potentialcommunication among our business sites inthe event of a natural disaster.
Our BCM* strategy focuses on items
requiring urgent attention, such as ensuring
ways to confirm employees’ safety andbuilding emergency stock. From this pointon, the Head Office will centrally manage theannual plans of our business sites acrossJapan and conduct drills and other activities
jointly so that all of the business sites will
move forward together with disaster
preparedness at the same pace.

BCP at Group companies
The Head Office developed a model BCP for
the NKC Group in 2012 and, by FY2015,

almost all of our business sites in Japan had
one in place.
Companies that joined the NKC Group in
FY2014 have developed basic BCPs. We willverify that they created an annual plan similar
to those of the other business sites andmanage their progress implementing theirplans on a level equivalent to the otherbusiness sites.

BCP at overseas plants
Our locations in the Philippines have beenworking on BCPs since FY2014 in tandemwith the development of BCPs at ourdomestic business sites. By the end of
FY2015, they had created basic BCP
documents.
When a BCP is created for a site outside
Japan, it must address the risks unique tothat site’s country. The Philippines is prone tonatural disasters similar to Japan’s and the
BCPs of our Philippine locations address therisks of earthquakes and typhoons.
We will move forward with implementing
BCM for the BCPs that have been developed
overseas while we work on BCPs for our
locations in China and the U.S.

■ Information security
Enhancing email security
We improved email security to prevent email text

Development of an information
security policy

or attachments from being accidentally disclosed

We are currently developing an information

to third parties when email is sent to external

security policy to ensure the security of ourrecipients from a company email address. The

information assets across the organization,

new security system encrypts all outgoing email

including trade secrets. After asking relevant

messages. If an email message has an attachment

personnel across the organization to provide

file, that file is now password-protected and atheir summaries of the information maintained byseparate email containing the password is sent totheir departments, we identified the information

the recipient. We will continue to implement both

assets that need to be protected to ensure thehardware- and software-based security measureseffectiveness of the policy. In FY2015, the Headtoprevent

accidentally

information
or

from

being

leaked,Office developed the policy and conducted an

intentionally,

andprotect

internal briefing session. Other business sites will

information from external attacks.

Fuji Honing Industrial currently has
a BCP in placedevelop individual policies beginning in FY2016.

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NKC CSR REPORT2016

Two Philippine locations have createdbasic BCP documents* BCM applies to the PDCA (plan-do-check-act)
cycle of BCP, which helps organizations to
prepare for disruptive events, such as natural
disasters, so that they can take practicalpreventive steps.

Business Highlights

April
2015

Signed Global Compact

April
2015

Made Fuji Honing Industrial Co., Ltd.
a consolidated subsidiary

June
2015

Sash Hardware Division’s billboard
advertisement placed in Shin‒Osaka
train station

July
2015

Visited by the Director General of thePhilippine Economic Zone Authority

October NKC Murayama Solar Power2015
established

November2015
10th anniversary