Nippon Yusen Kabushiki Kaisha - 日本郵船

1 3-2, Marunouchi 2-chome,Chiyoda-ku, Tokyo 100-0005, JapanTelephone: +81-3-3284-5151 Website: Yusen Kabushiki KaishaNYK Report 2 017 Nippon Yusen Kabushiki KaishaNYK Report 2017 Printed in Japan3-2, Marunouchi 2-chome,Chiyoda-ku, Tokyo 100-0005, JapanTelephone: +81-3-3284-5151 Website: Yusen Kabushiki KaishaNYK Report 2 017 Nippon Yusen Kabushiki KaishaNYK Report 2017 Printed in JapanCONTENTSC ompleted in 1930 (87 years old)Designated as an Important Cultural Property in August 2016 (First time for a preserved ship)Hikawa Maru is a cargo-passenger ship that played an active role in the Seattle route. In World War II, the ship served as a hospital ship, and immediately after the war Hikawa Maru was used to transport demobilized soldiers and repatriated citizens. During its 30 years of service, Hikawa Maru has carried many passengers and large amounts of cargo. Currently moored at Yamashita Park in Yokohama, Hikawa Maru was designated as an Important Cultural Property of Japan in August 2016 as valuable material for communicating the shipbuilding technology of the era in which the vessel was built (1930).

2 Basic Philosophy, Editorial Policy, and Outside EvaluationContentsOur HistoryOur FutureEnhancing Our Ability to Create ValueMessage from the PresidentMedium-Term Management Plan More Than Shipping 2018 Stage 2 Leveraged by Creative Solutions Value Creation ProcessMateriality and the Source of CompetitivenessAn Interview with the CFOI nitiatives for Creating ValueSpecial Discussion on Today s Technical Challenges Associated with IoTAt a GlanceBusiness StrategyFeature Story 1: Developing LNG-Related BusinessFeature Story 2: The Changing Automobile Industry and the NYK Group s Business ModelFoundations for Creating ValueA Discussion Between Outside Directors Corporate GovernanceDirectors, Audit and Supervisory Board Members, and Corporate OfficersFive-year SummaryFinancial ResultsSummary of CSR Activities in Fiscal 2016 and Outline of Fiscal 2017 TargetsAdvancement of Environmental Management Programme and Progress toward GoalsEnvironmentEnvironmental Performance DataEnvironmental AccountingHuman Resources Data124881214162224242830363840404452545 6949698104105106108 Hikawa MaruCover StoryWebsitePublicationsGeneral business activitiesCorporate website informationNon-financial informationWebsite section: Investor Relations section.

3 CSR Report (PDF (full version))NYK Report (Booklet (digest version))IR Fact BookOutlook and approach that we need in order to achieve our NYK Group Mission StatementBe respectful and considerate to your customers and colleagues. Stay warm, cordial, courteous, and think of new ideas for improvement, even when conditions appear satisfactory. Remain open to through with and accomplish your tasks. Never give up. Overcome challenges. Remain Group Values Integrity, Innovation, and Intensity (3I s)Editorial Policy for NYK Report 2017 Outside EvaluationsThe NYK Report 2017 is an integrated report that combines financial information, such as business results, reviews of operations, and future strategies, with general non-financial information about corporate social responsibility (CSR) activities and other initiatives. This report aims to further understanding among as many stakeholders as possible that the NYK Group not only pursues earnings but also tackles a wide range of issues relating to the environment, society, and governance (ESG) to contribute to the realisation of a sustainable society.

4 Further, please use this report in conjunction with the NYK Group s website, which includes information that is more comprehensive and report has been edited in accordance with version of the International Integrated Reporting Framework issued by the International Integrated Reporting Council in December of Report Reporting periodApril 2016 to March 2017 (In some cases, information from April 2017 and beyond is included.) CoverageThe activities of NYK as well as group companies in Japan and is indicated when there are differences in the major companies involved in specific activity areas. Date of issueAugust 2017 [Previous publication: August 2016; Next publication: August 2018 (tentative)]AudienceThis report has been prepared for all parties who have an interest in the activities of the NYK Group, including customers, shareholders, investors, business partners, employees, local communities, NPOs / NGOs, students, certification bodies, researchers, and those responsible for CSR at other for Disclosure about the Environment, Society, and Governance Environmental Reporting Guidelines (fiscal 2012 edition), Ministry of the Environment, Japan G4 Sustainable Reporting Guidelines, Global Reporting Initiatives (GRI) ISO 26000(See the website for a table comparing the GRI Guidelines with ISO 26000)NYK has expressed support for the Ministry of the Environment s Try to receive your parcel without redelivery requests!

5 Campaign aimed at preventing repeated attempts at home delivery of INCLUSION OF Nippon Yusen Kabushiki Kaisha IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HERIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF Nippon Yusen Kabushiki Kaisha BY MSCI OR ANY OF ITS AFFILIATES. THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS PhilosophyThrough safe and dependable monohakobi (transport), we contribute to the betterment of societies throughout the world as a comprehensive global-logistics enterprise offering ocean, land, and air > NYK Report > GRI Guidelines / ISO26000 The Dow Jones Sustainability Indices have included the NYK Group for 14 years in a row. We have been included in the FTSE4 Good Index for 14 straight years.

6 The NYK Group is a constituent company of the MSCI Global Sustainability Indexes. ( ) We won an Award for Excellence at the 2016 Internet IR Awards. The NYK Group was selected as a Competitive IT Strategy Company for the second consecutive year in fiscal 2016. NYK was the industry s only 2017 Certified Health and Productivity Management Organization (White 500). We have been first in the Toyo Keizai CSR Ranking s industry-specific category for 10 consecutive years. We are the only Japanese shipping company to have received an Environmental Ship Index award, which we received from France s HAROPA port authorities for the fourth consecutive year in 2015. The NYK Group-operated vessels Garnet Leader and NYK Remus received the Panama Canal Authority s Green Connection Award. The NYK Group-operated vessels NYK Rumina and Asuka II received the Best Quality Ship Award for 2016 from the Japan Federation of Pilots Associations.

7 The NYK Group s NYK LNG Smuk won a 2016 RoSPA Silver Award from England s Royal Society for the Prevention of Accidents (RoSPA).Cautionary Statement with Regard to Forward-Looking StatementsSome statements made in this report are forward-looking statements, which are based on information currently available and involve certain risks and uncertainties that could cause actual results to differ materially from those projected. Please be advised against undue reliance on such forward-looking statements. NYK undertakes no obligation to publish revised forward-looking statements to reflect events, circumstances, or unanticipated events after the present DataI. Enhancing Our Ability to Create ValueII . Initiatives for Creating ValueIII . Foundations for Creating ValueFive-year Summary / Corporate DataNIPPON Yusen Kabushiki Kaisha NYK Report 20171 Over a long history spanning more than 130 years, the NYK Group has continued to grow while repeatedly innovating and taking on new challenges.

8 The Group s frontier spirit remains vibrant and has enabled aggressive expansion into new business domains. Our HistoryIn addition to its maritime shipping service by pure car carriers, the NYK Group began supporting the entire supply chains of automobile manufacturers by providing other services, including pre-delivery inspections and inland trucking of finished vehicles. As Japan s industries transformed, there was a growing need for ships specially designed vessels for raw materials import and manufactured goods export. In response, NYK constructed the world s first wood-chip carrier, Kure commissioned Hakone Maru II as Japan s first all-container ship in 1968. Taking advantage of this achievement, the Group began switching over to the use of containers on liner shipping Yusen Kaisha (NYK) was established in 1885 through the merger of Japan s two leading shipping companies at that time.

9 With the merger, a new company flag was created featuring stripes in two colors, representing NYK s determination to transport goods across the globe. NYK s roots go back to a company named Tsukumo Shokai, which was established by the Tosa clan in 1870 and passed down to Yataro Iwasaki the following year. Tasked with international shipping, this company later changed its name to Mitsubishi Shokai, which eventually became NYK. In 1893, NYK began Japan s first long-distance liner service by offering shipments to Bombay (present-day Mumbai, India), and soon afterwards added routes to Europe, North America, and entered a new area of the energy value chain when it acquired a stake in an offshore shuttle tanker company, making NYK the first Japanese shipping company to be involved in this business. As part of its efforts to proactively participate in maritime resource development projects, the NYK Group began jointly operating floating production, storage, and offloading (FPSO) units off the coast of Brazil.

10 In 2015, the NYK Group commissioned Sakigake as Japan s first tugboat fueled by liquefied natural gas (LNG), and the Group has since been carrying out initiatives for promoting greater usage of LNG establishing its own container terminal in the the NYK Group has expanded its network of terminals internationally to included Thailand and Taiwan, among many others. NYK commissioned its first pure car carrier, Jintsu Maru, in 1970, and expanded the company s service network in response to the growth of the automotive of the companyTosa Maru becomes NYK s first ship to be deployed in a shipping route to EuropeWorld s first wood-chip carrier, Kure Maru Japan s first all-container ship, Hakone Maru IIComprehensive automobile logistics businessEntry into the shuttle tanker businessOperation of FPSO unitsInternational expansion of container terminal operationsThe NYK s first pure car carrier, Jintsu MaruPromotion of LNG fuelNYK contributed to the development of Japan s shipping industry by establishing Japan s first international shipping services, independently opening shipping routes that had previously been monopolized by the Western shipping companies.