Financial overview

In million yen	Mar. 2007	Mar. 2006	Rate of Change(%)	Factors
Overall
Sales	479,815	450,630	6.5	-
Operating income	41,657	45,258	(8.0)
Ordinary income	45,399	49,956	(9.1)
Current net income	24,793	29,445	(15.8)
Sealing product division
Sales	213,869	199,272	7.3	Sales increased, thanks to increased export volume and  greater production volume mainly in North America and Southeast Asia of Japanese brand vehicles that were hot sellers.
Operating income	17,466	16,026	9.0

The Company's three-year plan  is to expand operations globally and into the non-automotive or general industry (GI).
Global: Expand and strengthen production operations and sales facilities overseas. Overseas sales account for 39.7% of total sales, up 12.3% from the result three years ago.

GI: Increase sales in the general Industry. Sales in the general industry accounts for 25.4% of total sales, up 6.3% from the results three years ago.

Mergers of subsidiaries
The Company announced that it will consolidate its two automotive and office equipment parts manufacturing subsidiaries, Nitto Kogyo Corporation and Hokushin Corporation, on April 1. By integrating the companies which share the same business field, the group intends to generate synergistic effects and reinforce its business structure. Nitto Kogyo (Shinagawa-ward, Tokyo), which produces roller parts for copy machines and printers, will absorb Hokushin Corporation (Yokohama City, Kanagawa Prefecture), a supplier of precision elastic components and other products for automotive and other industries. The name of the new company will be SYNZTEC. (From an article in the Nikkan Jidosha Shimbun on Jan.13, 2007)

Sale of business
The Company turned over its entire business of pneumatic products including "F Series" cylinders with high precision guide and small-sized valves to New-Era Co., Ltd. as of October, 2006. (From a press release by the company on Oct. 1, 2006)

R&D costs for fiscal 2006 were 8,001 million yen, of which 5,616 million yen was allocated for seal products.

< Sealing product division >
-The Company worked on developing low friction products that are effective in saving energy; and products for fuel cell vehicles.
-The Company worked on developing high-value added products, combining automotive brake products and electronic components.
-The Company developed low friction oil seals that have the same performance as conventional seals in terms of sealing but with improved performance in terms of lower friction.
- The Company was successful in commercializing some encoding seals (which use magnetic rubber) used for integrated vehicle control. This includes controlling the vehicle's speed, for example. The Company is currently developing encoders, giving them more precision-level magnetization and  greater functions, creating multi-task encoders.
-In the area of fuel-cell parts, the Company developed seals for fuel cells humidification film modules, materials used for gas diffusion layers and other products. It is now testing the products on vehicles.
-The Company worked on developing soft metal gaskets (SMG-type EM guard) and electromagnetic wave seals combined with rubber gaskets (seals and shields).
-The Company developed and commercialized gaskets with FPC, a product combining ultra-small-diameter O rings, flexible printed circuits and gaskets.

Technical cooperation agreement (as of March 2007)

Partner	Content	Signed on
Freudenberg(Germany)	Introduction and licensing of such seal product as oil seal, O ring and related technologies	Jan. 8th 1989

Joint venture agreement (as of March 2007)

Joint venture partner	Content	Name of the joint venture company	Signed on
Freudenberg GmbH (Germany)	A joint venture in the field of such seal products as oil seal and O ring and related products between NOK Inc, a US subsidiary, and Freudenberg's US subsidiary	Freudenberg NOK GP	March 23, 1989

A total of 49,973 million yen was invested during FY2006, of which 26,120 million yen was appropriated for sealing product business.

<Sealing business>
The largest investment made was to reconstruct the Kumamoto Plant in Japan. Overseas, the Company invested mainly in Thai NOK Co., Ltd., Vietnam NOK Co., Ltd. and NOK (Wuxi) Vibracoustic China Co., Ltd.

-The Company has decided to make capital investment of a 44 billion yen level, including 24 billion yen earmarked for increasing production of auto parts in Japan and abroad for this fiscal year. The company will not only construct new plants in Vietnam and Singapore, but also expand production capacity in China and Thailand. In Japan, it will reconstruct an O-ring manufacturing building at its Kumamoto Plant at a cost of 4 billion yen, as well as make renovations and expansions at three plants. NOK will also invest 20 billion yen in flexible circuit board and rubber roller operations. Construction of a second plant to produce O-rings at a cost of 3 billion yen in Vietnam, and a synthetic rubber plant with an investment of 2 billion yen in Singapore will both start this fall. In Thai NOK, 3 billion yen will be spent for increasing production capacity of all items except an oil seal, and another 2 billion will be used for increasing production of vibration damping rubber products in the Chinese plant. In Japan, 7 billion yen will be invested in renovation and expansion of production facilities including in its Nihonmatsu Plant in Nihonmatsu City, Fukushima Prefecture. (From a story in the Nikkan Jidosha Shimbun on June. 16, 2006)

New Facilities (Seal Business)

Name of Company and Facility (Location)	Location	Facility	Expected Investment (millions of yen)	Started	Expected to Complete in:
NOK Nihonmatsu Plant	Nihonmatsu-shi, Fukushima prefecture	Equipment for manufacturing oil seals	3,970	Apr. 2007	Mar. 2008
Vietnam NOK Co., Ltd. Head Office Plant	Bien Hoa, Vietnam	Equipment for manufacturing O rings	3,100	Feb. 2006	Jul. 2008
Thai NOK Co., Ltd. Bangpakong Plant	Chonburi, Thailand	Equipment for manufacturing rubber cushions	3,136	Jun. 2007	Feb. 2008