NTN Report2011
for the year ended
March 31, 2011

Profile
Axle Bearings for Automobiles

World’s No.1 market share
Contributing to fuel efficiency
and safety
Constant-Velocity Joints for Automobiles

World’s No.2 market share
Contributing to fuel efficiency
and improved ride characteristics

Net Sales by Business (consolidated)
Aftermarket &Distributor Market

Automotive
Market16%

65%·Distributors business·Equipment repair·Automobile repair
parts (auto parts)
Others· Constant-velocity
joints· Axle bearings· Needle roller
bearings
Others(86.2 billion yen)(344.4 billion yen)

Aerospace Bearings
Fiscal year
ended
March 31, 2011

Used on the asteroid probe
Hayabusa

530.1

©JAXA

(billion yen)

Rolling Stock Bearings

Supporting the safetyof the world’s
high-speed trains
Wind Power System Bearings

Contributing to the spreadof renewable energy

Industrial Machinery Market

19%· Machine tools· Construction
machinery·Aerospace· Medical·Rolling stock
equipment·Wind power systems· Hydrodynamic· Precisionequipment
Others(99.5 billion yen)Supporting Progress and Abundancein Every Facet of Society

Contents
Profile ··················································· 1
Financial Highlights ································· 3
To Our Stakeholders ································ 5Interview with the Top Management ··········· 6
Research and Development ···················· 13
Feature1

Feature2

Automotive Market ···················· 15
Industrial Machinery Market ··· 19
At a Glance ·········································· 23
Automotive Market ···························· 25
Industrial Machinery Market ················· 27
Aftermarket & Distributor Market ·········· 29

1Society & Environment
Social and Environmental Responsibility ··· 31

Society

Responsibility to Customers ··············· 32
Responsibility to Suppliers ················· 35
Responsibility to Shareholders ············· 36
Responsibility to Employees ··············· 37
Responsibility to Local Communities ···· 39
Great East Japan Earthquake:
NTN’s Situation and Response ·········· 40

Environment

Environmental Management ··············· 41

Environmental Targets and Results ······ 45
Measures Against Global Warming ······ 47
Reduce Waste, Save Resources ·········· 49
Managing Environmentally
Hazardous Substances ···················· 50

Corporate Governance
Governance System ·························· 51
CSR Promotion Structure ··················· 53
Compliance, Risk Management ··········· 54
Third-Party Opinions ···························· 55
Financial Review ·································· 56
Company and Investor Information ········· 80

Machine Tool Bearings
Net Sales by Region (consolidated)
Japan

35%

(186.6 billion yen)
Asia and
OthersContributing to precision andultra-high speed inmachine tools
Construction Machinery Bearings

At work in mines andconstruction sites

17%(92.7 billion yen)

Medical Equipment Bearings
Fiscal year
ended
March 31, 2011

530.1

Used in CT scanners andartificial hearts(billion yen)

Hydrodynamic Bearings
Americas22%(118 billion yen)

Europe25%(132.8 billion
yen)

Development of world’s
smallest borehydrodynamic bearing
Precision Equipment

Promising applications in
new fields like precision
positioning technology

NTN is a precision equipment manufacturer whose mainstay product is bearings.
Ever since its foundation in 1918, NTN has been coming out with new products ina wide range of fields including automobiles, construction machinery, aerospace,rolling stock, wind power, medical equipment, and environment.

OutlineEditorial Policy

Corporate name: NTN Corporation
Trademark:
Date founded: March 1918
Head Office:3-17, 1-chome, Kyomachibori, Nishi-ku, Osaka 550-0003, Japan
Representative: Yasunobu Suzuki, Chairman and CEO
Shigeyoshi Takagi, President
Number of employees:
Consolidated: 19,172 (as of March 31, 2011)
Non-consolidated: 5,421 (as of March 31, 2011)
Fiscal term: March
Capitalization: 54.3 billion yen (as of March 31, 2011)
Net Sales:
Consolidated: 530.1 billion yen (as of March 31, 2011)
Non-consolidated: 322.4 billion yen (as of March 31, 2011)

NTN believes the active disclosure of management plans and businessresults, as well as its basic policy for corporate social responsibility (CSR),
CSR activities, and environmental preservation initiatives, among otherinformation, will help garner the understanding and support of all
stakeholders. This “NTN Report,” which since fiscal 2009 has combined
the “Annual Report” and the “CSR Report,” is part of this active approach
to information disclosure. The combining of two reports also cuts down
on resources used and reduces our impact on the environment.

Forward Looking Statements
This report contains forecasts and projections regarding NTN’s future plans,
strategies, and business results. Please understand that actual businessresults may vary from the projections made herein by the Company.

2

Financial Highlights
NTN Corporation and consolidated subsidiaries

Years ended March 31

Millions of yen (except per share amounts)

2011

2010

2009

2008

2007

¥ 530,056
24,56022,855
14,39929,70035,936
15,697¥ 452,746
1,399(1,838)(2,015)21,50440,702
14,687¥ 527,100
9,479(10,104)(8,985)49,59445,75917,402¥ 533,985
49,612
44,31327,43159,50439,547
15,006¥ 483,818
46,79345,17027,014
59,34732,693
14,221¥ 632,001
210,353
19,172¥ 618,802
214,551
17,959¥ 627,613
192,223
20,679¥ 629,464
216,401
18,960¥ 611,944
215,815
17,306¥ 376.05¥ 374.19¥ 376.77¥ 445.98¥ 445.61

27.08
–
10.00

(4.00)–
8.00(19.14)
–
13.00

58.43
54.59
19.00

58.34
53.74
16.00

2.3%
7.2%
31.6%

(0.3%)

4.4%
13.1%
33.3%

4.6%
13.8%
34.2%

FOR THE YEAR DATA
Net sales..........................................................
Operating income ............................................
Income (loss) before income taxes ...................
Net income (loss) .............................................
Capital expenditures ........................................
Depreciation.....................................................
R&D costs .......................................................
YEAR-END DATA
Total assets......................................................
Net assets/Shareholders’ equity.......................
Number of employees......................................
PER SHARE DATA
Net assets .......................................................
Net income (loss):- Basic .............................................................
- Diluted...........................................................
Cash dividends ................................................
OTHER INFORMATION
Net income (loss)/Average total assets (ROA)...
Net income (loss)/Average shareholders’ equity (ROE)..
Shareholders’ equity ratio.................................

(1.3%)(4.3%)
28.2%(1.1%)
32.2%

U.S. dollar amounts have been converted from yen, for convenience only, using the approximate exchange rate on March 31, 2011, which was U.S.$1 = ¥83.15.

Net sales

Operating income/Operating margin(Billions of yen)(Billions of yen)

600

100

500
400

Operating income
Operating margin(Billions of yen)

10

30

80

8

60

6

300

100

2007 2008 2009 2010 2011
(Years ended March 31)

3

20

10

200

0

Net income (loss)

(%)

40

4

20

2

0

2007 2008 2009 2010 20110(Years ended March 31)

0−102007 2008 2009 2010 2011
(Years ended March 31)

Thousands of U.S. dollars(except per share amounts)

Millions of yen (except per share amounts)

2006

2005

2004

2003

2002

2001

2011

¥ 434,837
37,64530,37019,55049,28428,586
14,771¥ 388,349
33,201
26,586
16,74049,67024,87014,952¥ 357,394
24,70918,181
11,032
38,092
23,97913,543¥ 342,745
20,785
6,198
2,657
25,264
23,83812,255¥ 324,339
8,140
(701)
(132)
21,08824,40011,706¥ 340,551
14,335
6,888
4,289
24,123
23,402
10,618$ 6,374,696
295,370
274,865
173,169
363,536
432,183
188,779¥ 561,494
183,247
14,631¥ 516,578
157,952
12,788¥ 460,341
142,487
11,885¥ 467,198
134,928
11,810¥ 462,895
138,532
11,989¥ 478,945
138,625
12,619$ 7,600,734
2,529,802¥ 396.73¥ 341.93¥ 308.27¥ 291.82¥ 299.27¥ 299.44$ 4.52

41.94
38.55
11.00

35.83
32.94
8.50

23.54
21.87
5.50

5.70
5.51
5.00

(0.29)
–
5.50

9.26
8.78
6.00

0.33
–
0.12

3.6%
11.5%
32.6%

3.4%
11.1%
30.6%

2.4%
8.0%
31.0%

0.6%
1.9%
28.9%

(0.03%)(0.1%)
29.9%

0.9%
3.0%
28.9%

2.3%
7.2%
31.6%

Shareholders’ equity/ROE

Total assets/ROA
Total assets

ROA

Capital expenditures/Depreciation(%)(Billions of yen)

900

6

300

Shareholders’ equity (%)
ROE
15

600

4

200

10

(Billions of yen)(Billions of yen)

60

Capital expenditures
Depreciation

40
300

2

100

5

0

0

0

0

20

2007 2008 2009 2010 2011−2

(Years ended March 31)

2007 2008 2009 2010 2011

−5

(Years ended March 31)02007 2008 2009 2010 2011
(Years ended March 31)

4

To Our Stakeholders

We would like to extend our deepest sympathies to all those affected by the Great East Japan
Earthquake in March this year. We pray for early recovery for the victims of this tragedy. The NTNGroup will continue to provide all possible efforts to support reconstruction in affected areas.
The Japanese economy showed steady signs of recovery in the fiscal year ended March 31, 2011 withincreased exports, a recovery of capital expenditure, and improved corporate income. In terms of the global
economy, a gentle recovery is being seen in the Americas thanks to the effect of government policies, Europe
is seeing a recovery overall despite variation between countries, and in Asia economic conditions are gradually
improving thanks largely to domestic demand in countries such as China.
Against this background, we worked to achieve the targets of our two-year medium-term management plan,“NTN 2010 for the Next Step,” which started in April 2009. Through measures including increasing sales andreducing costs, we achieved a V-shaped recovery that exceeded our initial targets. These results provide thefoundation for “Global Advance 2013,” our new medium-term management plan, which started in April 2011.
NTN also positions Corporate Social Responsibility (CSR) as the foundation of its management, and will returnto the roots of “Monozukuri” (manufacturing), re-affirming what it is that society and customers want and working
towards sustained development of society and the corporation as well as increased corporate value.
In our environmental protection activities as well, which the entire group is working on, we will accelerate developmentof ECO products based on the keywords of global environmental protection, energy conservation, and resource
conservation, and speed up development of new products that respond to new needs, such as new energy sources.
We look forward to the continued support and understanding of our shareholders and stakeholders.
September 2011

Chairman and CEO

President

Yasunobu
Suzuki

Shigeyoshi
Takagi

Chairman andCEO

President5Interview with the Top Management

Based on “Global Advance 2013,” our new medium-term management
plan, we will increase sales in growth markets and fulfill our corporatesocial responsibility in the countries and regions of the world.

Q

What was the market environment in
the fiscal year ended March 31, 2011?

A

There was a significant recovery in demand in
the markets for automobiles, industrial
machinery, and aftermarket and distributor.

The lengthy recession following the fall of Lehman Brothers in2008 gave way to gradual recovery, and as a result ourcompany is enjoying a market turnaround.
In the automotive market, demand is recovering among
our customers in Japan, Europe, the Americas, Asia, andother regions.
In industrial machinery, demand is increasing for construction
machinery and machine tools in Japan, while in Europe
demand is growing for agricultural machinery and wind
power systems. In the Americas, demand is up significantly inthe key markets of construction machinery and agricultural
machinery. In China and other parts of Asia, demand
increased in construction machinery and office equipment.
In the aftermarket and distributor markets, demand was up
worldwide thanks partly to aggressive efforts to expand sales.
In addition to large demand increases in the rapidly
growing markets of China and the rest of Asia, Europe ismaking up an increasing percentage of our business, thanks
to the contribution of our consolidated French subsidiary
NTN-SNR Roulements (NTN-SNR), which underwent a
name change in July 2010.

the previous fiscal year).
In the automotive market, sales were up overall for
constant-velocity joints, axle bearings, and needle roller
bearings in Japan, Europe, the Americas, Asia, and others.
The result was 344.4 billion yen in net sales. Operating
income was 3.5 billion yen on the effect of increased sales.
In the industrial machinery market, Japan, Europe,

Target net sales and operating income for the fiscal year
ending March 31, 2012
(Billions of yen)Q

How was performance in the fiscal year ended
March 31, 2011, and what is the forecast for the
fiscal year ending March 31, 2012?

A

In the fiscal year ended March 31, 2011, we
achieved increased sales and profits. And we
predict the same for the fiscal year ending
March 31, 2012.

Net sales in the fiscal year ended March 31, 2011 were 530.1
billion yen, (up 17.1% over the previous fiscal year). Thanks toincreasing sales, operating income was 24.6 billion yen (up from
1.4 billion yen), and ordinary profit was 21.1 billion yen (ordinary
loss of 0.6 billion yen in the fiscal year ended March 31, 2010).
After calculating extraordinary profits such as gain on
sales of investment securities and gains from allotment ofshares, and extraordinary losses such as extraordinary
operating losses and earthquake-related costs, net income
was 14.4 billion yen (compared to a net loss of 2 billion yen

Net sales

Operating income

700

9.7

8.7

9.3

1.8

600

534.0
500

6.0

4.6
0.3

included inconsolidated
performance(Billionsof yen)

75

300
200

0.0

452.7

434.8
400

10.0
5.0

585.0
530.1

527.1

483.8

Operating margin (%)

46.8

50

49.6

37.6
24.6

100

9.5
0

2006

2007

Rapid Advance 21

2008

2009

Growth throughCreativity andAchievements 21

1.4
2010

2011

NTN 2010
for the Next Step

35.0
25

0

ended
2012 (Yearsor ending(Target) March 31)
GlobalAdvance2013

6Interview with
the Top Management

In the fiscal year ended March 31, 2011, we achieved increased sales and profits thanks in part to the worldwide economic recovery.
With demand growing, NTN has a responsibility to supply products and fulfill its social responsibility.
We are boosting our production capacity around the world and working closely with suppliers and distributors to provide
products that satisfy customer needs.

Q

What benefits have come from “NTN 2010 for the
Next Step?”A

the Americas, Asia, and others enjoyed increased sales
thanks to demand recovery in sectors including construction
machinery, agricultural machinery, and machine tools. As aresult, net sales were 99.5 billion yen. Operating income was
3.1 billion yen thanks to increased sales.
In the aftermarket and distributor markets, sales increasedon the strength of recovery among customers in Japan,
Europe, the Americas, Asia, and others, resulting in net salesof 86.2 billion yen. Increased sales helped operating income
reach 17.9 billion.
For the fiscal year ending March 31, 2012, we see a major
improvement over the second half of the fiscal year ended March
31, 2011: demand will continue to be strong in sectors suchas construction machinery and machine tools, and automobile
manufacturers are stepping up production at a faster pacethan was initially anticipated. For the fiscal year ending March
31, 2012, we foresee net sales of 585 billion yen (up 10.4%)
and operating income of 35 billion yen (up 42.3%).

It has created a synergy with NTN-SNR that has
expanded our business.

To cope with the worldwide recession triggered by thefinancial crisis in the U.S. in 2008, we implemented our
two-year medium-term management plan, “NTN 2010 for
the Next Step.” Through the rapid deployment of various
measures, we were able to achieve a V-shaped recovery thatexceeded our original plans.
One success of “NTN 2010 for the Next Step” has been
business expansion in Europe through synergy with NTN-SNR.
Bringing NTN-SNR into our Group helped us expand notjust into France and Western Europe but also further east
with, for example, a manufacturing site in Rumania, andsales sites in Poland and Russia. In the industrial
machinery market, by supplying products like needle roller
bearings and tapered roller bearings from NTN to NTN-SNR,
we increased orders from new customers in sectors suchas rolling stock and aerospace. As well, whereas NTN-SNR
had been strong in automotive repair parts (auto parts),

European share of NTN’s consolidated net sales
Japan
Asia and
Others41%

11%

Americas

30%

Japan

17%
Fiscalyear ended
March 31,2008

Americas22%Europe18%

35%

Asia and
OthersFiscalyear ended
March 31,2011

Europe25%

Net sales by region
Japan(Billions of yen)

EuropeAmericas

Asia and Others

700
included inconsolidated
performance

600

534.0
500

585.0

530.1

527.1

483.8

May 2011
Ceremony to mark completion of
the NTN China Technical Center

452.7

434.8
400

NTN-LYC (Luoyang) Bearing Corporation,
established in February 2011 jointly with
Luoyang LYC Bearing Co., Ltd.
(artist’s conception of completed building)

300

200

100

0

2006

2007

2008

2009

2010

2011

2012

(Target)(Years ended or ending March 31)

7

Q

the addition of NTN products resulted in major expansion.
In the automotive market, we have had new orders aroundthe world, and we have accelerated the pace of R&D into
new products incorporating technologies like sensors. As
a result of all this, the European market went fromaccounting for about 18% of our total sales in the fiscal year
ended March 31, 2008 to about 25% in the fiscal year ended
March 31, 2011.
Another success of “NTN 2010 for the Next Step” hasbeen a strengthening of our business base in China.
Besides increasing our production capacity in China for
products like bearings and constant-velocity joints, in
October 2010, NTN (China) Investment Corporation
established a new sales site in Nanjing. In February 2011,
NTN joined Luoyang LYC Bearing Co., Ltd., one ofChina’s leading bearing manufacturers, to form NTN-LYC(Luoyang) Bearing Corporation (NTN-LYC). In May 2011,
construction was completed on the NTN China TechnicalCenter in Shanghai.
NTN has also been expanding in the Americas. In June
2010, NTN do Brasil Produçao de Semi-Eixos Ltda. wasestablished as a manufacturing subsidiary for constant-velocity
joints in Guarulhos, São Paulo, Brazil. In December 2010,
NTN boosted its manufacturing capacity for hub bearings
with the establishment of NTA Precision Axle Corp. in Carol
Stream, Illinois for the integrated production of
manufacturing pre-processes.
In Japan, we increased production capacity in the Noto
district of Ishikawa Prefecture. In October 2009, operation
began at NTN Houdatsushimizu Corp., and in January 2010at NTN Shika Corp. In December, we established NTN Noto
Corp. Along with existing base NTN Hakui Corp., thesebases increase our production capacity for industrial
machinery bearings and give us a diversified, risk-reducing
manufacturing network.

“Global Advance 2013,” our new medium-term management
plan, began in April 2011. This is the first step towards ourtarget of net sales of 1 trillion yen by the fiscal year ending
March 31, 2018, our 100th anniversary. Our aim is to expand
sales and increase the operating income margin by growing
our business and increasing profits in growth markets.
Numerically, our targets for the fiscal year ending March 31,
2014 are net sales of 700 billion yen and an operating income
margin of 10% (the fiscal year ended March 31, 2011: net salesof 530.1 billion yen, operating income margin of 4.6%).
A key to “Global Advance 2013” is acceleration of globalization
through a strategy of “on local site with local materials by local
personnel.” In other words, we will establish a system allowing
local management by local employees using local facilities andmaterials and accelerate business expansion with a focus on
global markets. By focusing on increasing sales in highly
profitable sectors like industrial machinery and the aftermarket
and distributor markets, and in growth markets like China, Brazil,
and India, we will increase local production and procurement.
To accelerate “on local site with local materials by local personnel,”
we aim to increase overseas sales as a percentage of NTN’s total
sales from 65% in the fiscal year ended March 31, 2011 to 70% in
the fiscal year ending March 31, 2014, and increase overseas
production from the current 36% of total to 45%. By providing
various regions of the world, including Japan, with products produced
overseas, and using local materials, parts, and equipment, we
can better offset negative currency effects and raise profitability.
Another key to “Global Advance 2013” is the earlycommercialization of systems for next-generation EVs.

Progression of medium-term management plan

Acceleration of overseas sales and overseas production

16

100th
Anniversary

14

1 trillion yen

10

GlobalAdvance2013

Rapid
Advance 21

483.8
9.7%

6

45%

1.8%

2007

Fiscalyear ended
March 31,2011

Size of circle: Net sales
Height of circle: Operating margin

billion yen

2011

Local production ofindustrial machineryin addition toautomotive products

Japan

4.6%

527.1

Fiscalyear ending
March 31,2014

Business expansion in
growth markets such as
China, India, and Brazil

530.1

2

Japan

2014

2018

(Years ended or ending March 31)

New medium-term management plan

55%

Overseasbillion yen

Growth throughCreativity andAchievements 21

Japan

70%

NTN 2010
for the Next Step

40

Fiscalyear ending
March 31,
2014

Ratio of Japan/
Overseas Production

30%

Overseas

700 billion yen
10 %billion yen

8

Ratio of Japan/
Overseas Sales

Net Sales

12

Under the new plan, we aim to expand businessworldwide by accelerating a strategy of “on local
site with local materials by local personnel” system.

Japan

35%

Fiscalyear ended
March 31,2011

Overseas

Overseas

65%

36%

64%

8

Interview with
the Top Management

A

Operating Margin(%)

Tell us about the new medium-term
management plan.

In April 2011, we established the EV System Division, where
we are accelerating development of in-wheel motors andother EV systems as we speed up the process from practical
R&D to early mass-production and market release. We arealso applying the new technologies we have developed toour existing products, which allows us to reduce costs andcome up with new ideas for products.

Q

smaller and cars increasingly adopting a global platform, weare revising designs and changing to new materials to be
more cost competitive, and we are stepping up thedevelopment of products that are environmentally friendly
and that contribute to improved gas mileage.

Q

A

What are your strategies for each business area?

A

We will boost business in the highly profitablesectors of industrial machinery and aftermarket
and distributor.

What are your strategies for each world region?
We will accelerate business expansion in
growth markets.

We are aiming to increase sales in industrial machinery andaftermarket and distributor. In the fiscal year ended March 31, 2011,
the net sales ratio of automotive and non-automotive was 65:35,
but our goal is to make this 60:40 by the fiscal year ending March
31, 2014. To do this, we will boost global manufacturing capacity oflarge bearings and precision bearings for the industrial machinery
market in order to increase our market share. We will also strive tooffer products and services a cut above that of our competitors
through the use of state-of-the-art sensor technologies. In theaftermarket and distributor market, meanwhile, we are
expanding our network of distributors for general industrial
machinery in Europe, the U.S., and China and the rest of Asia,
and we are expanding our auto parts business beyond Europe.
In the automotive market, we are looking to acceleratebusiness expansion in axle bearings, in which we have theNo.1 world market share, and in constant-velocity joints, inwhich we are No.2. With products getting increasingly

We are in the process of expanding business in growth markets.
In China, we are improving our sales network stretching from thecoastal regions to inland by creating alliances with major regional
distributors, and making the most effective use of our China
branches to propel sales. We plan to establish more branches
and distributors in the country’s interior regions. We are also
dramatically increasing production capacity for industrial
machinery bearings such as rolling stock bearings andlarge bearings. In the automotive market, NTN-LYC(Luoyang) Bearing Corporation will start manufacturing hub
bearings and needle roller bearings for Chinese automotive
companies. The newly established NTN China TechnicalCenter will form the basis of locally focused development.
In Thailand, we will boost our manufacturing system for
hub bearings and constant-velocity joints. In Chennai,
southern India, we are building a new plant that will begin
producing constant-velocity joints and hub bearings in 2012.
In France, we are making major capacity increases forlarge bearings for applications including wind power systems,

Targets for net sales by business

Target sales by region

Automotive market(Billions of yen)800

Industrial machinery market
Aftermarket & Distributor market

700.0

700

530.1
500

144.5

86.2

200

65%

100

0

9

92.7

(Target)

2014

130.4

(Years ended or(Target) ending March 31)

174.0

139.2

200

0

2012

152.0

118.0

2011

223.5

205.6

186.6

100

2011

109.8

132.8

60%

369.0

344.4

530.1

300

426.5

Asia and Others

150.5

585.0

600

400

300

Americas

700.0

500

115.0

99.5

400

Europe

700

40%

101.0

35%

Japan

800

129.0

585.0

600

(Billions of yen)

2012

(Target)2014(Years ended or(Target) ending March 31)

and for precision bearings for aerospace. In Eastern Europe,
besides maximizing the capabilities of our plant in Rumania,
we are looking into strengthening our business in Russia andother countries.
In North America, we are continuing to increase production
capacity for bearings for the burgeoning automotive market,
and for construction machinery and agricultural machinery. In
South America, we are starting to produce hub bearings andconstant-velocity joints in Brazil, as well as stepping up sales
to the industrial machinery sector.
In Japan, NTN Noto Corp. in Ishikawa Prefecture will begin
production in 2012. We will also begin construction on NTN
Akaiwa Corp. in Okayama Prefecture, where construction
had previously been put on hold. The Kuwana Works is also
expanding production capacity for precision bearings.
By implementing the activities mentioned above under“Global Advance 2013,” over the next three years we areaiming to increase sales by 60% in Asia and others, 30% in
Europe, 30% in the Americas, and 20% in Japan.

Q

What are your strategies for R&D andcapital expenditure?

A

We will build a global R&D network and boost
production capacity so that we can increase sales.

We will strengthen our worldwide R&D network. We must
respond to customer needs in their home counties andregions through local R&D bases that quickly develop andprovide products that meet these needs. It is importantthat we strengthen R&D communication and alliances notjust in Japan but among our entire global R&D network.
We currently conduct research at two bases, in Japan andFrance. We are looking into expanding research capabilities
with the establishment of a base in another world region.
As for development, it is crucial that we develop productsthat meet the needs of worldwide customers, and to this end
we are strengthening our product development system inEurope, the Americas, and China. We have a system for theBusiness expansion in growth market
North America

Western Europe (France, Germany)• Sales expansion for aftermarket/
distributor• Production reinforcement of
NTN-BOWER Corp.
• Production reinforcement of
automotive products• Production reinforcement of large andprecision bearing of NTN-SNR ROULEMENT

Europe+ 30%
Americas+ 30%
NTA Precision Axle Corp.

BrazilNTN-SNR• Production reinforcement of
hub bearings• Mass production start ofconstant-velocity joints• Sales expansion for Industrial
machinery aftermarket

The circle and number represent
the growth rate in each region during
the three year “Global Advance 2013” period

Eastern Europe(Romania, Turkey, Russia, etc)

NTN NOTO Corp.
(rendering)• Production reinforcement of
automotive products

Japan

China

• Production reinforcement oflarge bearings and precision
bearings for industrial machinery• Increase utilization of the
NTN China Technical Center• Production reinforcement ofindustrial machinery bearings(rolling stock, large bearing, etc)
• Increase the number of sales
office and expand distributors• Mass production start for
local makerIndia

NTN NEI Manufacturing
India Pvt. Ltd.
(rendering)• Mass production
start of hub bearings• Sales expansion for
Industrial machinery
aftermarket

Japan
+ 20%
NTN China Technical Center

Asia and
Others+ 60%

Thailand• Production
reinforcement of
automotive
products

10worldwide sharing of information with databases for design,
prototypes, experiments, manufacturing technology, andcustomer projects.
We are carrying out aggressive capital investment so as tokeep up with increasing worldwide demand in the automotive
industry. We are also boosting production capacity in Europe
and China, among other regions, for large bearings for wind
power systems and construction machinery. Under “NTN2010 for the Next Step,” capital investment was 51.2 billion
yen over two years, but under “Global Advance 2013,” weplan to invest at least 160 billion yen over three years. The
majority of this will take place outside Japan as we boost
production capacity in Europe and Asia with a focus on
industrial machinery.

Three-year equipment investment plan
Overseas(Billions of yen)Domestic240

At least 160 billion yen
Breakdown of overseas
equipment investment
over the three year
“Global Advance 2013”
period

158.3

160

109.1
80

51.2

0

2005/3~

2008/3~

2010/3~ 2012/3~ (Target)

Rapid
Advance 21

Growth throughCreativity andAchievements 21

NTN 2010 for
the Next Step

3 years

2 years

2 years

GlobalAdvance 2013
3 years

EuropeAmericas
Asia and
Others

New Medium-Term Management Plan “Global Advance 2013” (April 2011 − March 2014)
Fiscal year ending March 31, 2014:
Net sales: 700 billion yen, Operating income margin: 10%“Decision” and “Execution” and “Accomplishment”
Business expansion
in growth markets

Improvement ofoperating income margin

Business expansion worldwide, especially in Asia
Business expansion in industrial machinery, aftermarket and distributor
Faster commercialization for EV products
Reinforcement of local management
Increase of local procurement and production“On local site with local materials by local personnel”
Fiscal year ended March 31, 2011:
Net sales: 530.1 billion yen, Operating income margin: 4.6%

Main fact of “Global Advance 2013”
NTN 2010 for the Next Step

Net sales (billions of yen)
Operating income (billions of yen)
Operating margin
Net income (billions of yen)
Inventory (billions of yen)
Inventory turnover ratio (times)
ROA
ROE
D/E ratio
NTN-ROI*
Exchange rate

Global Advance 2013

Fiscal year ended
March 31, 2011 1

Fiscal year ending
March 31, 2012

Fiscal year ending
March 31, 2014 2

530.1
24.6
4.6%
14.4
137.0
3.9
2.3%
7.2%
1.12
4.2%
$: ¥85.7 €: ¥113.1

585.0
35.0
6.0%
17.5
130.0
4.5
2.7%
8.5%
1.07
6.0%
$: ¥80.4 €: ¥111.9

700.0
70.0
10.0%
42.5
140.0
5.0
6.1%
17.0%
0.75
11.1%
$: ¥80 €: ¥110

* NTN-ROI = Net operating income after tax/(Inventory + Property, plant and equipment)

11

Amount of increase2 – 1+169.9+45.4+5.4 point
+28.1
+3.0
+1.1
+3.8 point+9.8 point
0.37 improvement+6.9 point—

Q

What was the dividend this fiscal term?
How about in future?

NTN considers rewarding its shareholders an issue of
foremost importance. Regarding dividends, from a mediumand long-term perspective, NTN’s goal is to provide a steadyand sustainable dividend, which it will determine on the basisof its consolidated performance, dividend payout ratio, andbusiness environment. Retained earnings are used to fundfuture business development in Japan and overseas.
With regard to the year-end dividend for the fiscal year
ended March 31, 2011, NTN paid 5 yen per share. Adding itto the interim dividend, 5 yen, the total annual dividend pershare was 10 yen. We estimate that in the fiscal year ending
March 31, 2012 as well the dividend will be 10 yen per share.

Q

What are your thoughts and measures for CSR?
How about in future?

A

We are carrying out voluntary efforts that willcontribute to society and environmental protection.

At NTN, we carry out CSR activities not just from an economic
perspective but from an environmental and social perspective
as well. We hold ourselves accountable to stakeholders andwe strive to meet their expectations and earn their trust. By
growing our business while contributing to sustainable
development of society as a whole, we hope to maximize thecorporate value of our company for all stakeholders.
Based on this philosophy, we carried out a range of activities
in the fiscal year ended March 31, 2011 together with customers,
suppliers, shareholders, employees, and people in communities.
For example, we strove to improve quality and customer
satisfaction not just at our own production and sales sites, butalso at suppliers, distributors, and other parts of the value chain.

Q

Do you have a message for NTN’s stakeholders?

A

We will listen sincerely to your concerns and do
everything possible to reflect your opinions.

The fiscal year ending March 31, 2012 is the beginning of our
new medium-term management plan “Global Advance 2013,”
under which we will strive to not just improve businessperformance but also meet stakeholder expectations for socialand environmental responsibility. We would like to ask you toread this report and give us your frank opinions on its content.
We will listen sincerely to your concerns and do everything
possible to reflect your opinions.
We ask for your continuing guidance and support.

Chairman Suzuki Honored with the Order of the Rising Sun, Gold and Silver Star for Autumn 2010
Yasunobu Suzuki, Chairman and CEO of NTN Corporation, received theOrder of the Rising Sun, Gold and Silver Star* on the conferment in theautumn of 2010. Mr. Suzuki was appointed NTN President in November
2001 and became Chairman in June 2007. In these positions he has
contributed to progress in industry and to the advancement of the bearing
industry as Chairman of the Japan Bearing Industrial Association and theWorld Bearing Association.
The Order of the Rising Sun, Gold and Silver Star recognizes Chairman
and CEO Suzuki’s numerous accomplishments including strengthening Japan’scompetitive edge in “Monozukuri” (manufacturing), expanding overseas
operations as a global company, contributing to the global environmentand safety in people’s lives through innovative products, conserving theenvironment, and contributing to society and community activities.

The Order of the RisingSun, Gold and Silver Star

* A Japanese order, established in 1875, that is conferred on persons demonstrating
long and meritorious civil service.

12

Interview with
the Top Management

A

Dividends were 10 yen per share. For the fiscal
year ending March 31, 2012, we also estimate
10 yen per share.

In the fiscal year ended March 31, 2011, we continued on
previous efforts including supporting environmental certification
for suppliers and holding briefings and workshops for distributors
on a range of topics. As well, with the number of NTN’s overseas
employees increasing, we held a range of technical training andmanufacturing basics training courses that brought together
employees from Japan and overseas. We also took steps tohelp achieve a work-life balance through systems including
the rehiring of female employees who take child care leave.
We strive to reduce the impact that our business activities haveon the environment. Besides activities planned and implemented byeach department, companies as a whole contribute to local
communities through regular activities including tree-planting,neighborhood cleanups, and academic and sports promotion.
None of these activities by itself is enough to produce
lasting results; rather, each is merely one of many ways that
we seek to contribute to society through constant, grassroots
action. We will continue to search for effective ways to help
the environment and the community, both by starting new
initiatives and by taking a fresh, sincere approach to pastefforts. Through ongoing dialog with stakeholders, we hope
to further raise the corporate value of NTN.

Research and Development

We’re working to create our markets
by developing new technologies througha global system.
Tribology Forms the Core of the Creation of Future Technologies in the Fields of Environmental
Protection and New Energy.
The two pillars of our R&D are preservation of the global environment

technologies of the future. At the same time, we establishedand new energy. Bearings that reduce friction, and thus energy

a new business group, the Compound Material Products Division,

consumption, in a variety of machinery are truly eco-products. Based on

for research that brings together different material areas such as

the expertise we have built up in tribology*1, we use our material

sintered alloys and engineering plastics.

technologies including surface modification, ceramics, sintered alloys,

Bearings are becoming an increasingly crucial component ofand engineering plastics*2, and our lubrication technologies in oil andautomotive and industrial machinery. Based on our foundation ofgrease, to bring customers products that are light and compact, offer low

tribology, we are making further advancements in elemental

torque and a long service life, and can handle high-speed applications.

technologies, design and development, production technologies,

To speed up development in these technological areas, in April

assessment technologies, and intellectual property, all with the2011, we renamed the Elemental Technology R&D Center in Mie

aim of expanding our market presence.

Prefecture the Research Institute of Advanced Technologies and*1 Tribology: A science and technology that includes the study and applicationof mechanisms of friction, wear, and lubrication.
*2 Engineering plastics: Synthetic plastics that are engineered to have a specific function.

established a system for prioritizing the development of theWind powersystems

Creating the Technologies of the Future
Preservation of the global environment, new energy

Rolling stock
Construction
machinery

Electric
vehiclesAutomobiles

Longerworking life

(high reliability)

Morelightweight&more
compact

Space rockets,
artificial satellites

Passenger
planesUltrahigh-speed&
specialenvironments

Customer needs

Medicalequipment

Lower friction(lower torque)

Strong support for customers through elemental technologies,
design and development, production technologies,
assessment technologies, and intellectual property

Precisionequipment
Machinetools

Tribology
Forging, Lathe turning, Polishing, Joining, Lubricating, Coating & surface improving, Oiling, Greasing, Metals, Ceramics,
Engineering plastics, Sintered alloys, Sensing (Rotation, load, angle, remote monitoring, wireless communication), Analysis, Measurement, Evaluation

Corporate Philosophy

For New Technology Network“We shall contribute to international society throughcreating new technologies and developing new products.”

1. Creation of original technologies.
2. Offering the technologies for additional values and service
that are suitable for each customer and end user.
3. Improvement of employees’ standard of living, distributionof fair returns to stockholders, and contribution to society
based on the steady growth of our business.
4. Promotion of globalization, and formation of management
systems / corporate organization which are essential for
NTN, as an international leading company.

13

Topics Automobiles

Products forElectric Vehicles (EVs)Improving Development of Modular Products
and System ProductsElectric vehicles (EVs) need more than just bearings and unit
products; they also require modular products that, for example,
combine motors and electric brakes, and products incorporating
control systems. That’s why NTN developed a modular productthat incorporates an in-wheel motor,
speed reduction mechanism, hub
bearings, and sensors. We alsooffer an in-wheel motor system with
its own control system (using an
inverter). (See page 15 for details.)

Through a Global R&D System, We Boost our Ability to Adapt our Technology to Local Needs.
To improve our ability to offer customers technical services

other areas, which we conduct in Japan and at NTN-SNR

like design and assessment tests, in May 2011 we established

Roulements (NTN-SNR) in France. The development of products

the NTN China Technical Center in Shanghai. At this base, local

and technological services is conducted in a locally based,

engineers who have taken long-term training in Japan use

self-contained manner in order to promptly meet the needs ofstate-of-the-art testing devices to meet local needs. We plan tocustomers in each worldwide market. Relevant information is

eventually have 200 employees working here.

Research andDevelopment

NTN’s R&D includes basic research in elemental technology andstored in a database to be shared with NTN bases worldwide.

Development

NTN China Technical Center
SNR R&D
CenterResearchChina

NTN Automotive Center

Development

EuropeDevelopment

Americas

Design data / Testing data / Experimental data
Production technology data / Customer-project data
Share databaseJapan
Research
Production Engineering
R&D Center

Elemental Technology
R&D Center

Development
Industrial Technical Center

NTN R&D Center

Using NTN-SNR Sensor Technology to Establish
the Next International Standard for the NTN Group

Topics Industrial Machinery

NTN-SNR holds the worldwide patent for the ABS* used in
automobiles, and NTN has the No.1 world share of automotive
axle bearings. We come out with a number of products that combine
sensors and bearings; one example is joint development between
NTN-SNR and NTN of a hub bearing with high-resolution rotational
sensors that combines the two companies’ technologies to offer
40 times more precision than previous products.
NTN is now looking to develop futuristic products that apply
sensor technology to industrial machinery as we seek to establish
new international standards.

Advancing Cutting-Edge Sensor Technology
in an Expanding Market* ABS: Antilock Brake System——A device that prevents planing caused by locking
tires by allowing the automobile wheels to continue interacting tractively during
sudden braking or on roads with little traction.

Applying Sensor
Technology

Construction machinery is in increasing demand in emerging
markets, and crucial to this market is sensor technology thatmakes possible automatic operation and monitoring and doesaway with the need for human operators. And as transportation
modes make the shift to rolling stock, sensor technology is becoming
indispensable to safe transport. And ina range of other fields as well, like wind
power systems, which require monitoringfor safety, and medical equipment, for which
precise sensing is a must, we are constantly
responding to customer needs.

141

Automotive Market

Pioneering the Age of Electric Vehicles (EVs)

FeatureCreating Tomorrow’s Technologies: Focus on In-Wheel Motor System,
the Next Generation in EV Drive Systems, to Develop a Range ofDrive Systems and Steering Wheel Systems
NTN is concentrating its efforts on the potential of the in-wheel motor system and was the first to develop
the in-wheel motor system. In the one motor type EV system, the most common system currently
used worldwide, we have developed the one motor type EV drive system with an automatic transmission.

Essential Element for the Environment

Just One-Third the CO2 Emissions of Internal Combustion Engine Vehicles
With the world’s expanding automotive market come problems like global warming and depletion of energy
resources. One solution to these problems that is gaining attention comes in the form of electricvehicles (EVs), which emit minimal CO2 and pollutants. To spread the use of EVs,
it is necessary to make the vehicles lighter to increase the distance they can travel ona single charge and improve the fuel efficiency (electricity charges).
NTN is contributing to the popularization of EVs by developing units andsystems that make vehicles lighter.
Comparison of CO2 unit emissions for clean-energy vehicles
and internal combustion automobiles (%)
Emissions while driving
Emissions during production of fuel (energy)0Electric
vehiclesHybridelectric
vehicles32
37

8Internal
combustion
automobiles

17

83

Source: New Energy and Industrial
Technology Development Organization(NEDO)

In-Wheel Motor System, the World’s Lightest, for Next-Generation EVs

Lateral motion is possible

15

Compared to the one-motor system, which has a single motor in the vehicle body to replace
the conventional engine, the in-wheel motor system involves installing a motor in each wheel
and has advantages such as dramatically increased degrees of freedom in vehicle design
owing to flexibility in securing passenger cabin space. And because the drive of each wheel
can be individually controlled, the in-wheel motor system allows lateral and circular motion
and thus transforms the concept of the automobile. NTN’s in-wheel motor system combines
a lightweight motor and high-efficiency reducer to lower vehicle weight, improve operational
stability, and give better ride characteristics. And in combination with the control system(using an inverter), which communicates information from the sensors, vehicle operators andpassengers are ensured a safe ride.

As Automotive Market Expands,
Eco-Cars Increase

Automotive sales are increasing at a rate of 3% annually and in2010 approximately 70 million cars were sold worldwide. Sales
are gradually increasing for eco-cars like hybrid electric vehicles(HEVs) and EVs and it is estimated that they will account for almost
1% of the approximately 90 million cars sold in 2020. If at thattime the average price of an EV is about the same as an HEV
costs today, about 2-3 million yen, that means the worldwide EV
market will be worth 1.5 trillion yen.
At NTN, besides offering a range of high-value-added drive
systems and steering systems that will help expand the EV market,
we have products that offer high environmental performance forthe gasoline and diesel cars that are most popular in emerging
markets. We are thus pursuing a strategy for the Automotive
market that encompasses EVs, HEVs, and internal combustion
automobiles.

Estimated growth in the automotive and eco-car markets
Eco-cars (HEVs, EVs, etc.)

90 million

Approx.

(Unit:10,000 cars)
9,000

8,000

Internal combustion automobiles

About

Approx.70million

750,000
EVs

7,000

6,000

1,000

0

2008

2009

2010 2011 2012 2013 2014 20152020

(Years)

Source: Nomura Research Institute16

FeatureCreating Future EV Technologies that Also
Improve the Environmental Performance of Internal
Combustion Automobiles and Contributeto the Spread of HEVs

1

FeatureAutomotive Market

Pioneering the Age of Electric Vehicles (EVs)

Beyond Conventional Thinking for EVs
Proprietary In-Wheel Motor Improves Fuel Efficiency,
Safety, Stability, and Ride Characteristics of EVs
When we started development of the in-wheel motor in 2003, we
knew we had to strive for stability and ride quality, as well as improve
the fuel efficiency (electricity charges). The majority of a car’s weightis accounted for by the motor, and the motor’s size is determined by
the maximum output torque. We therefore incorporated a lightweight
cycloid speed reduction mechanism that amplifies the motor’srotational torque and thus reduces the maximum torque required by
the motor; the result was a small, lightweight product. Axle bearings

applications including EVs for driving short distances such as to(hub bearings) using NTN’s tribology technology are used for thethe store or to work, EVs that are easy to get into and out of for seniorsection that interacts with the reducer internal motor. The rotational

citizens, and vehicles that make optimal use of the advantages

speed and load-bearing capacity was extended to allow use withof in-wheel motors such as two-person EV commuters andEVs, and in combination with a compact, high-speed motor, we

single-seat cars.

came out with the in-wheel motor type axle units in 2005.

We have also developed the one-motor type EV drive system

In May 2010, we incorporated the electromechanical brakes and(diagram 3 on page 18) with an automatic transmission, whicha multi-axis load sensor we had been developing simultaneously,

consists of a small, lightweight automatic two-speed transmission,

thus completing the intelligent in-wheel. The lightest product of its

drive motor, differential (a device that offsets the difference in RPM

kind in the world, the intelligent in-wheel allows optimal control of the

between the inner and outer wheels), and a control system withmotor and brakes using information from the sensors. This productinverter. This product is made for the currently common one-motor

offers superior fuel efficiency and safety during the ride.

type EVs. By complementing this with NTN’s flagship products
such as constant-velocity joints and multi axis load sensor

Aiming to Create a World Standard with
the Latest Systems for the Next Generation of
EV Inverter Products

integrated hub bearing, we offer an all-in-one solution in the

In March 2011, we announced an in-wheel motor system (diagram

in which the steering wheel movement is converted into electrical

1 on page 18) incorporating a system (with inverter) that accurately

signals that are transmitted by wire to the tire. This first-of-its-kind

controls the motor’s drive strength based on information from thesystem ensures safety with a sub motor in addition to the steering’s

intelligent in-wheel. This ensures stable movement of the vehicle

main motor; the sub motor immediately engages if the main motorwith consideration for safety. We also achieved practical use ofexperiences a problem. Although this system can be used fora small, lightweight in-wheel motor system for EV commuter (diagram

internal combustion automobiles, we are concentrating on promoting

2 on page 18). This product is expected to see widespread use in

it to the EV market since it allows dramatically increased freedom

form of the NTN one-motor type EV power train.
We have also developed a steering system for steer-by-wire(diagram 4 on page 18), a next-generation steering wheel systemof design.
By coming out with these system products, as well as theseA Word from a Developer

compound systems that incorporate components like high

Aiko Ishikawa

standards required by EVs.

EV System Division, NTN Corporation

Developing Products that Offer
Safety for People and Protection
for the Environment
I am in charge of developing in-wheel motors for EV commuters.
It makes my job worthwhile to know that I am helping makeproducts that so many people use everyday. Our goal is to ensurethat as soon as possible our products are dependable: this isa crucial part of the car chassis and we want everyone, especiallywomen and senior citizens, to enjoy a safe ride.
I hope to continue making products that contribute to our visionof cars that are both environmentally and people friendly.

17

precision magnetic angle sensor, we aim to create new world

New Systems for the Next Generation of EVs

1

2

In-Wheel Motor System
Tire
H/B

Accelerationcommand

RotationcommandNumber oftire revolutions

In-wheel motor
system

In-Wheel Motor System for Electric Commuters

In-wheelmotor

Current
Main ECU
vehiclecontroller

Decelerationcommand

In-wheel-motor
system information

InverterAcceleration/decelerationcommands of
R/L wheels

Motor rotor angle
Number oftire revolutions

In-wheel
motor

Battery

H/B

In-wheel type motor systemfor electric commuters(Excluding inverter in photo)
We have made in-wheel motor systems smaller and lighter and incorporated
inverters as well. These are expected to see widespread use in EV
commuters made for one or two passengers or senior citizens, and fortraveling short distances.

3

4

One Motor Type EV Drive System with an
Automatic Transmission
NTN-one motor type EV power train[One motor type EV drive system]
Differential

Drive motor

FeatureWe developed a modular product that incorporates an in-wheel motor, speed
reduction mechanism, hub bearings, and sensors. To this, we added a control
system (including an inverter) that accurately controls the motor’s drive strength
based on information from the sensors.

Steering System for Steer-by-WireSteering
reactionforce actuator

Controller
Two-speedtransmission

NTN major products
Constant-velocity joints (CVJs)
Hub bearings with integrated sensors
The NTN one-motor type EV power train is a one-motor type EV drive
system consisting of a drive motor, transmission, differential, and control
system with inverter, which has been complemented with NTN products
such as constant-velocity joints and hub bearings.

Wheel-turning actuator
The steering wheel operation is converted into electrical signals that aretransmitted by wire to the tires. Safety is ensured thanks to a sub motor that
immediately engages if the main motor experiences a problem.

R&D Highlights
High-resolution magnetic sensor technology
OutputN

S

High-Precision Magnetic Angle Sensor Enabling

The magnetic field
Advanced Motor Control
distribution of the magnets is
precisely detected by multiple magnetic The high-precision magnetic angle sensor was developed throughsensors (Hall effect) arranged linearly.

the application of high-resolution magnetic sensor technology.
To increase energy efficiency, the EV drive motor accurately
adjusts the motor current according to the rotational positionof the rotor. To do this, an angle sensor that accurately detects
Realization of sensor performances
rotational position is needed, but previously there was noenabling
to
read
out
the
magnetic
pattern
High-resolution magnetic sensor
40 times more accurately thanhigh-precision angle sensor that could take measurements
conventional systems.
while located on the outer circumference of the rotary shaft.
Magnetic sensor
The high-precision magnetic angle sensor combines a magnetic
Meritsencoder and magnetic sensor, which allows for highly accurate
Magnetic encoder is integrated
detection of the rotational position (rotational angle) of the rotarywith bearing and installation
space saving is possible.
shaft. And because it is integrated with the bearings, it takes up
Sensor can be positioned
minimal space and helps make products smaller and lighter.
using bearing outer ring side
face, and the mounting
We will continue to use NTN-SNR’s precision sensor
becomes easy.
Magnetic encoder
technology to expand the range of products we offer for EVs.
Hall effectGaps of NS magnetic polessegmentalized accurately.

18

Aerospace Bearings

Wind Power System
Bearings

NTN products are used in passenger
plane jet engines, rockets, and satellites.

NTN provides a range ofbearings for wind powersystems, including large
main shaft bearings morethan 2 meters in diameter.

Page 22

Page 222

Feature© Mitsubishi Aircraft

Industrial Machinery Market

Expanding Market,
More Sophisticated Needs
Rolling Stock, Wind Power Systems, Aerospace, Medical Equipment
State-of-the-Art Technology for Industrial Machinery
Products for industrial machinery must be highly reliable. NTN technology enjoys a superior
reputation in world markets and our products are at work in numerous growth fields suchas environment and space exploration.

Essential Element for Efficiency

Railway Transportation:
Key to Reducing CO2 Emissions
Global warming is becoming increasingly serious as newly emerging
countries emit a rapidly growing amount of CO2 emissions.
To help curb this problem, it is crucial that we use railways, whichemit only about one-tenth of the CO2 (per person for each kilometer
traveled) during transportation as internal combustion automobiles.
NTN is contributing to railway transportation with its bearings,
which are in growing demand worldwide as an essential
component of railway cars.

19

CO2 emissions per volume transported (passengers)(g-CO2/person/km) (Fiscal 2009)
Personalpassenger
vehicles165
110

Airplanes

48

Buses
Railways

18

Source: Ministry of Land, Industry, Transport and Tourism website

Estimated size of worldwide railway market(Trillions of yen)Control systems

Infrastructure

Railway cars

Services

20.0

14.4 trillion yen

16.0

12.1trillion yen
12.0

8.0

4.0

0.0

2007

2008

2009

2010

2011

2012

2013

2014

2015 2016 (Years)

Source: Compiled by Financial & Economic Research Center, Nomura Securities Co., Ltd.,
using materials from Union of the European Railway Industries (UNIFE).

Worldwide Railway-Related Industries to Grow
an Average of 2.5-3% Per Year
Around the world, the transportation of goods is shifting away fromtrucks and airplanes to railways. And the world’s major countries areinvesting heavily in railways. China is said to have doubled its 2009
investment in the construction of railways compared to 2008. With
increasing demand for cars for high-speed railways and LRT (light rapidtransit) systems, annual growth up to 2016 is expected to be 2.5-3%.
A contributing factor to the expansion of railways is the efficiency
that this mode of transportation offers. Particularly in newly emerging

Rolling Stock Bearings
NTN products have been usedin successive generations ofJapan’s Shinkansen train,from the first “0 series” up
to today’s N700 series.
The spindle bearing
developed by NTN for
the 0 series Shinkansen
in 1964 has beenrecognized as a Tribology
Heritage by the JapaneseSociety of Tribologists.

countries, high-speed railways are needed to provide fast and highly
efficient transportation between cities. And since railways emit far
fewer CO2 emissions than modes of transportation like automobiles
or airplanes, they offer a way to curb global warming and air
pollution. Railways appear even more attractive for their energy
efficiency when we consider the high cost of gasoline.

Page 21

20

FeatureTransportation Increasingly Shifts to Railways

2

FeatureIndustrial Machinery Market

Expanding Market, More Sophisticated Needs

NTN Bearings for Rolling Stocks are
Used in Worldwide Railways
New Orders for NTN Bearings in Canada, the U.S.,
Dubai, Egypt, and Taiwan
With increasing worldwide demand for bearings for rolling stocks,
NTN is focusing on its rolling stock bearing business.
Rolling stock bearings are used under extreme conditions andmust have a high level of safety and reliability. NTN bearings areused on high-speed railways around the world, such as Japan’s
Shinkansen and France’s TGV, and have earned a reputation forModern Railways 2010 in Beijing

high quality and high technology.
In Canada, NTN has received a journal bearing order for
LRT from a major rolling stock manufacturer. In the U.S., wehave received an order for NTN bearings for commuter trains.
And we have received bearing orders to be used on trains in thefor railway equipment manufacturers in Japan and Europe whose
technologies are highly green and safe.
Against this background, NTN is tapping into markets forrolling stock bearings for high speed trains by maximizing the

rapidly urbanizing countries of the U.A.E.(Dubai) and Egypt (Cairo),synergistic relationship with sensor technology specialist NTN-SNR.

and on subways in Taiwan.

NTN-SNR enjoys a major presence in European railway markets,

In December 2010, we participated in Modern Railways 2010

supplying bearings, for example, to France’s TGV high-speedin Beijing, an international exhibition of modern railway technology,

train. In both R&D and marketing, NTN-SNR teams up with thewhere we exhibited the advanced technology of NTN and

NTN Group to develop and provide products ideally suited to

NTN-SNR of France. We are also working to tap new markets

each of the different railway systems in countries and regions.

around Asia and the Middle East.

The rolling stock cars of high-speed railways run aroundBy utilizing our technological strength, along with the NTN

the clock, at speeds of 250-300 km/h, in any kind of weather,and NTN-SNR brands, we are looking to increase sales for bothand through mountains or over plains. These rolling stock cars

these companies around the world.

need bearings that can not only operate at high speeds, but that
also can deal with the particular natural environments of each region.

With High-Speed Railways Networks Being Plannedin Countries Around the World, NTN is BoostingIts R&D and Sales Systems

In order to develop products that would work smoothly in thenortheast of China and Russia, we carried out durability testingthat assumed actual operating conditions; for example, we did
exhaustive testing at temperatures as low as -50°C and colder.

Governments in countries around the world have plans to expand
their high-speed railway networks. This provides a huge opportunity

A Word from a Developer

Hiroki Ooe
Industrial Business Headquarters,
NTN Corporation

Bearings for the
N700 Shinkansen*

Shinkansen and European
High-Speed Railways:
Using Our Dual Strengths Worldwide
As more and more countries build high-speed railways, NTN’s
bearings for rolling stocks are seeing widespread use worldwide.
NTN is the only bearing manufacturer whose bearing technology
is used on Japan’s Shinkansen and on European high-speed
trains. We are proud to be a part of the development of bearings
with such an advantage over those of the competition.
We will continue to develop bearings that meet the many needsof customers around the world.

Bearings for the
TGV high-speed train*© NTN-SNR / Graphic Obsession* Photos are cross-sectional models of products.

21

Bearings for the Growing Wind Power Market

Bearings for the Aerospace Industry

Participation in Wind Power Trade Shows Around
the World Leads to New Orders in Europe,
China, and India

Certificate of Appreciation from Government for
NTN’s Contribution toAsteroid Probe “Hayabusa”

According to estimates by

Only the most advanced technology

the International Energy

available is sufficient for developing

Agency (IEA), wind power

and manufacturing bearings used inaccounted for 2% of total

the aerospace industry. NTN supplies

world energy in 2006 andbearings to the world’s leading jet

will account for 7% in 2030.

engine manufacturers. We are also theWith the surge in renewable

exclusive supplier of engine turbopump Hayabusa asteroid probe

HUSUM WindEnergy 2010 in Germany© JAXA

bearings for all-Japanese rockets. And we supply products tosignificant attention for its superb power generating efficiency.

many space satellites, including Japan’s Hayabusa asteroid probe.

As wind power systems become larger, many main shaft

Launched in 2003, the Hayabusa successfully collected dust

bearings are now more than 2 meters in diameter. Because it

samples from an asteroid called Itokawa between the Earth andis not easy to conduct maintenance on bearings installed on

Mars and completed its mission in June 2010 after a 6-billion-kilometer

large systems and offshore systems, these bearings must be

journey lasting seven years. The hinges of the joints that open

highly reliable and durable.

the Hayabusa’s solar panels were equipped with 16 sphericalplain bearings developed by NTN. We thus played a crucial role

NTN displayed its advanced bearing technologies atparticipation in international windin supplying power to the Hayabusa asteroid probe.

power industry trade shows such

On December 2, 2010, Japan’s Cabinet Office and Ministry ofas HUSUM WindEnergy

Education, Culture, Sports, Science and Technology awarded certificates2010 in Germany andof appreciation to the 118 universities, corporations, institutions,

China Wind Power 2010.

and other organs that contributed to development of the Hayabusa.

This participation was

NTN was the only bearing manufacturer to receive this citation.

part of the reason that we
received new orders from
customers in Europe andChina in the fiscal year ended
Offshore wind power system

March 31, 2011.

Certificate of appreciation fromthe Space Development Minister

R&D Highlights
Sensing system for cerebral
aneurysm treatment
Cerebralaneurysm

Coil
Coil attached to the tipof a wire is placed inside
the aneurysm

Force sensor
for cerebral
aneurysm
treatment

Wire transfer
portionExtrafine wire

Microcatheter

During use of the support apparatus
Y-connector withbuilt-in force sensor
Wire

NTN’s sphericalplain bearing
used in Hayabusa(Outer diameter: 26 mm)

Insertion force

Manual maneuverof the switch
buttonRight handmaneuverDuring wire replacement/manual maneuver

Hinges of the
Hayabusa’s solar panels

Taking on Challenges in Fields Including Brain
Surgery and Pharmaceutical Development
Through operation of a wire inserted into a catheter, NTN iscontributing to the advancement of embolization operations
that prevent rupturing of a cerebral aneurysm, a cause ofsubarachnoid hemorrhage. In this operation, to prevent rupturingof a cerebral aneurysm, normally at least two highly skilled
doctors are needed to accurately handle the extra-fine wire.
In 2006, NTN developed for the first time ever a sensing systemthat measures and indicates any minimal force exerted on theextra fine wire by the fingertips of the doctor. In March 2010,
in collaboration with institutes including the Nagoya University
Graduate School and the Nagoya Institute of Technology
Graduate School, we made another world-first development:
an assistance apparatus that makes this operation possible withjust one doctor.
In addition to developing technology that contributes to CT
scanners and artificial hearts, NTN is taking on new challenges
in the field of medicine.

22

Featureenergy worldwide in recent years, wind power is receivingAt a Glance
Classification of Business Areas
Up until last fiscal year, we classified our business into the three product areas of Bearings, Constant-Velocity Joints, and Precision
Equipment and Other Products. Starting in the fiscal year ended March 31, 2011, we are reporting net sales and operating income in thethree areas of automotive market, industrial machinery market, and aftermarket and distributor market.

Net sales in each product area as percentage of total sales(old classification)
Precision Equipment andOther Products

Aftermarket & Distributor market

Bearings

16 %

70%

5%

Net sales in each business application as percentage
of total sales (new classification)(370.1 billion yen)

Automotive market

65%(344.4 billion yen)

(86.2 billion yen)(25.7 billion yen)

Fiscal year ended
March 31, 2011

Fiscal year ended
March 31, 2011

(billion yen)(billion yen)

530.1

Constant-Velocity Joints

530.1

Industrial machinery market

25% (134.2 billion yen)

Bearings
Bearings underpin the rotating parts of many
types of machinery and are used in a wide
range of industrial fields, ranging from aerospace
applications to automobiles, industrial machineryand precision machinery. They are contributing
to the preservation of the global environment by
their involvement, for example, in the expanding
use of wind power systems, in the developmentof railways, which are environmentally friendly,
and in progress in medical technology.

(Billions of yen)
600
400

376.4

314.3

2009 20102011(Years ended March 31)(Billions of yen)150 124.4

115.7

134.2

100
50
0

2009 2010 2011

(Years ended March 31)

Precision Equipment and Other Products
The precision equipment business segment
combines leading-edge technology products
and products for special fields. Amid the ongoing
evolution of successive leading-edge industries,
NTN pursues further advances in the precision
technology it has built up through the developmentof high-precision bearings, and applies it tostate-of-the-art fields, including electronics,
semiconductors and computers.

23

This market covers automotive andautomotive-related parts. With the main
products of axle bearings, constant-velocity
joints, and needle roller bearings, NTN
provides the world’s automotive andautomotive-related companies withnew technologies and products.

Industrial
machinerymarketThis business covers a range ofindustrial machinery areas including
construction machinery, rolling stock,machine tools, agricultural machinery,
aerospace, office equipment, and wind
power systems. We are working todevelop new technologies and expand
sales for all sizes of bearings.

370.1

Constant-Velocity Joints
Constant-velocity joints (CVJs) are parts thattransmit the power of an automobile engine’s
rotation smoothly, efficiently and constantly
to the vehicle’s tires. CVJs enhance thecompactness, lightness and high-efficiency
characteristics of a vehicle, thereby contributing
to the achievement of low fuel consumption andreduced CO2 emissions, both of which areissues in the automobile industry.

Automotive
market200
0(Billions of yen)
30
26.3

22.8

25.7

20

distributors, we provide
Aftermarket Throughmaintenance bearings for general&machinery, and we service the aftermarkets
Distributor for mining, paper, and steel machinery,
as well as the aftermarket for automotive
marketparts. We provide increasingly morebearings of all types to customers aroundthe world.

100

19 % (99.5 billion yen)2009 2010 2011

(Years ended March 31)

Net Sales
French subsidiary NTN-SNR has been
included in consolidated performancesince the fiscal year ended March 31, 2009.

(Billions of yen)

The synergy between NTN and NTN-SNR
has resulted in business expansion in
Europe in the automotive, rolling stock,aerospace, and other industrial machinery
markets, and in aftermarket and distributor
markets such as automobile repair parts(auto parts).

500

Industrial machinery market

Automotive market

700

Aftermarket & Distributor market

included in consolidated performance

600

534.0

483.8
99.0

300
200

311.5

86.2

452.7

91.8

114.0

119.7

72.2
79.7

345.6

315.6

300.9

100
0

2007

2008

2009

2010

At a Glance

73.3

400

530.1

527.1
74.4

99.5

344.4

2011

(Years ended March 31)

Measures and Sales Target Under the New Medium-Term Management Plan “Global Advance 2013”
Automotive market

Industrial machinery market

Aftermarket & Distributor market

Acceleration of business expansion of axle
bearing (world’s No.1), CVJ(world’s No.2)

Reinforce global production capacity for
products such as large bearings and precision
bearings, and increase sales

Reinforce machinery distribution network
throughout Europe/Americas, China, and Asia

Design review and material change for morecompact vehicles and global platforms
Faster development speed of products that meetenvironmental and fuel efficiency regulations

Create products that stand out through the useof cutting-edge sensor technology, and provide
a comprehensive level of service

Net Sales

Net Sales

Japan

EuropeAmericas

Asia and Others(Billions of yen)

500

Japan

Expand automotive parts business into regions
other than Europe

Net Sales
EuropeAmericas

Asia and Others

Japan

Europe(Billions of yen)(Billions of yen)

200

150

Americas

129.0

426.5
400

344.4

369.0

144.5

150

300
100

99.5

100

115.0

200

0

2011

2012

(Target)2014(Target)(Years ended or ending March 31)

0

86.2

101.0

50

50

100

Asia and Others

2011

2012

(Target)2014(Target)(Years ended or ending March 31)

0

2011

2012

(Target)2014(Target)(Years ended or ending March 31)

24

Automotive
marketType of BusinessThis market covers automotive and automotive-related parts. With
the main products of axle bearings, constant-velocity joints, andneedle roller bearings, NTN provides the world’s automotive andautomotive-related companies with new technologies and products.

Net sales and operating income in automotive market
Japan

Net Sales

EuropeAmericas

Asia and Others

Operating Income(Billions of yen)500

included in consolidated performance

400

Sales Situation
Results in the fiscal year ended March 31, 2011
In the fiscal year ended March 31, 2011, net sales in the automotive
market were 344.4 billion yen, up 43.5 billion yen (14%) over the

311.5

300

bearings in Japan, Europe, the Americas, and Asia and others.
Despite a dwindling effect of the scrap incentive in Europe, thecombination of brisk exports from Japan and improved sales of American

315.6 300.9

369.0

344.4

Operating
Income(Billions of yen)

200

10

100

5.8

3.5

0

2007

previous fiscal year. Sales were up overall in the automotive market
for constant-velocity joints, axle bearings, and needle roller

345.6

2008

2009

2010

2011

5
0

2012 (Years ended or(Target) ending March 31)

Breakdown of net sales by region
Asia and Others

Japan

Asia and Others

Japan

11%

41%

16%

35%
Fiscal year
ended
March 31, 2011

Fiscal year
ended
March 31, 2007

automotive manufactures in Americas resulted in increased sales.

344.4(billion yen)

311.5
(billion yen)

Operating income amounted to 3.5 billion yen, a 12.1 billion yen
improvement from the preceding fiscal year.

Sales forecast for the fiscal year ending March 31, 2012
The first half of the fiscal year ending March 31, 2012 is expected

Americas

EuropeAmericas

Europe

30%

18%

23%

25%

to be sluggish due to the earthquake, but for full year we forecast

Change in Net Sales Share by Region (Synergy with NTN-SNR)

sales increases. Contributing in particular will be improved sales

Since the fiscal year ended March 31, 2009, NTN-SNR Roulementsof American automotive manufactures and new customer orders,(NTN-SNR), the leading bearing manufacturer in France, haswith Asia and others, Southeast Asia, and China expected to see

been included in NTN’s consolidated performance. This has

significant improvements. As a result, we forecast net sales fordramatically changed our global business structure.

the fiscal year ending March 31, 2012 of 369 billion yen, up 24.6
billion yen (7%).
Operating income is forecast to increase by 2.3 billion yen(66%), to 5.8 billion yen.

New Products

In the automotive market as well, the inclusion of NTN-SNR in
NTN has increased the orders that we receive from European
automotive manufacturers. And the capacity increase has created
new synergy not just in Europe but in our worldwide business as well.

features a 25% reduction in rotating torque compared to conventional
products, and provides the same level of performance with a lower

Development of Low Torque Deep Groove Ball Bearing(without seal) for Transmissions
Achieves High-Performance Bearing Capabilities
and Reduction in Rotating Torquevolume of lubricating oil through the use of fog lubrication, contributing
to improvements in fuel efficiency and more environmentally friendly
operation.

Application for automotive transmissions

In recent years, manufacturers of automotive-related parts areseeking better fuel efficiency and low environmental impact byreducing the amount of oil in the transmission; this is being achievedby shifting from dip-feed lubrication to fog lubrication. Amidst thistrend, NTN has set a development goal of reducing the torque in fog
lubrication systems and is concentrating on the shape of the bearing
cage. By adopting a cage with a new shape, we were able to reduce
the torque without sacrificing the basic performance of the bearings.
Released in May 2011, this low torque deep groove ball bearing

25

Developed productMai n P ro d u c t L in eu ps for Au t o motiv e M ar ket
Constant-velocity
joints for steering*Thrust needle
roller bearing

Transmission

Clutch forseat lifter*

Tapered roller bearings

At a Glance

Engine, accessories

Third generation
hub bearings*(Axle bearings)

Auto-tensioners*

Wheel applications
Needle roller
bearings forrocker arm

No.1 in the worldConstant-velocity
joints*No.2 in the world* Photos are cross-sectional models of products.

Environmentally-friendly products
Development of Self Mounting Type Chain Tensioner*
for Timing Chains
In September 2010, NTN developed a self mounting type chain
tensioner, which has fewer parts than conventional chain
tensioners and which allows car engines to be more compact.
This will contribute to improve fuel efficiency by weight reductionof the vehicle, as well as dramatically fewer man-hours during
production and maintenance processes. We plan to market thisworldwide as a product that is good for the environment and people.

* Chain tensioner: A part that is used to adjust chain tension.

Self mounting type chain tensioner
Mounting of
conventional productMounting of
new productSelf mounting type
chain tensioner

Chain

Chain

Directscrew
mounting
Fixing bolt
Engine side

Engine side

Space-saving

26

Industrial
machinerymarketType of BusinessThis business covers a range of industrial machinery areas including
construction machinery, rolling stock, machine tools, agricultural machinery,
aerospace, office equipment, and wind power systems. We are working todevelop new technologies and expand sales for all sizes of bearings.

Net sales and operating income for industrial machineryJapan

Net Sales

EuropeAmericas

Asia and Others

Operating Income(Billions of yen)

150

Sales Situation
Results in the fiscal year ended March 31, 2011

included in consolidated performance

120

114.0

119.7

115.0

99.5

99.0
90

79.7

In the fiscal year ended March 31, 2011, net sales in the industrial
machinery market were 99.5 billion yen, up 19.8 billion yen (25%)
over the previous fiscal year. There were large increases in sectors

Operating
Income60

including construction machinery and machine tools in Japan.
In Europe, agricultural machinery and wind power systems wereamong the sectors that improved. In the Americas, the key(Billions of yen)

10

30

6.5

enjoyed major gains. In Asia and others, net sales improved in
sectors such as construction machinery and office equipment.

0

2007

2008

2009

2010

2011

Operating income amounted to 3.1 billion yen, improving
4.7 billion yen from the preceding fiscal year.

Sales Forecast for the fiscal year ending March 31, 2012
Demand is expected to increase in all regions in the fiscal year
ending March 31, 2012, with especially large gains in construction

5

3.1

sectors of construction machinery and agricultural machinery

0

2012

(Years ended or(Target) ending March 31)

machinery, machine tools, gear boxes, rolling stock, and wind
power systems. We forecast net sales of 115 billion yen for
the fiscal year, up 15.5 billion yen (16%).
Operating income is forecast to increase by 3.4 billion yen(110%), to 6.5 billion yen.

New Products
Development of theIndustry’s First “IC Tag Integrated Bearing”
Bearings Embedded with Information on the Bearing’s
Quality and Usage Record
Issues faced with bearings on industrial machinery that have beenused for a long period of time include complicated management
procedures. One solution that has been tried is the use of IC tags*.
However, various problems plagued further adoption of the system,
including the fact that IC tags cannot physically be read and written
when mounted within metallic components, and their actual size.
In July 2011, NTN developed an IC tag integrated bearing thatuses a dedicated reader/writer unit that allows electronic data to be
saved directly within the bearing itself. The type of information savedon the IC tags can be configured for each user, and the newly
developed tag allows reference of bearing quality information, as wellas inspection records.
The IC tag integrated bearing can contribute to reliability inquality control for equipment that needs regular inspections to be
conducted over a long period of time and that requires the ultimate
in reliability, such as construction machinery, mining equipment,
aircraft, rolling stocks, and wind power systems.

27

Read using a dedicatedreader/writer unit

* IC tag: Also called an RFID
(Radio Frequency Identification) tag.
Contains electronic information thatcan be transferred using radio waves.

IC tagMain Sectors and Products of Industrial Machinery Market * Photos are cross-sectional models of products.
Jet engine partsfor aerospace

Large tapered roller bearings
for wheel applications*

Ball bearings forhigh-pressure turbines

Dump truck for mining

Aerospace

High-speed
spindlesMachine tools

Construction machinery

At a Glance

Nacelle ofwind power systems

Bearings for machine tools*Wind power systems

Spherical roller bearings formain shaft*Environmentally-friendly products

Railway vehicle

Railway
vehicle bogies

Example of application for small fan motor
Hydrodynamic
Twin Bearphite

Hydrodynamic Twin Bearphite Reduces Torque by 10%
In June 2011, NTN developed the Hydrodynamic Twin Bearphite,which supports the axis of a motor with a lower torque thanconventional bearings, while at the same time delivering
outstanding reliability and quiet operation.
By reducing bearing torque loss during rotation, thisproduct helps the bearing itself make a major contribution tolowering the electricity consumption of motors. As well, press
fitting can be used for assembly, which is a much simpler
process than conventional bonded fitting.

Journal bearings*

Motor axis (rotates)
Fan (rotates)

StatorThrust washer

Housing28

Aftermarket&
Distributor
marketType of Business
Through distributors, we provide maintenance bearings for generalmachinery, and we service the aftermarkets for mining, paper, and steel
machinery, as well as the aftermarket for automotive parts. We provide
increasingly more bearings of all types to customers around the world.

Net sales and operating income in the aftermarket and distributor market
Japan

Net Sales

EuropeAmericas

Asia and Others

Operating Income(Billions of yen)

1,200
included in consolidated performance

Sales Situation

1,000

Results in the fiscal year ended March 31, 2011

800

1,010
918

733

862

745

722

Net sales in the aftermarket and distributor market in the fiscal year
ended March 31, 2011 were 86.2 billion yen, up 14 billion yen (19%).

Operating
Income600(Billions of yen)

In Japan, Europe, the Americas, Asia, and others, demand for products
for repairs rebounded thanks to a vibrant industrial machinery
market. Auto parts also saw increased demand in Europe.

300

227

400

179

Operating income increased by 6.4 billion yen (56%), to 17.9
billion yen.

200

200

100

Sales Forecast for the fiscal year ending March 31, 2012
Demand is expected to increase in all regions in the fiscal year

0

2007

2008

2009

2010

ending March 31, 2012, with healthy auto parts demand in Europe

2011

0

2012

(Years ended or(Target) ending March 31)

and the Americas, and increased demand from large distributors
in China. We forecast net sales for the fiscal year of 101 billion yen,up 14.8 billion yen (17%).

Operating income is forecast to increase by 4.8 billion yen(27%) on the strength of sales up 22.7 billion yen.

TOPICSTechnical Service in Exclusive Van
Truck is a Traveling Base Offering Seminars and Technical Support.
The NTN Group has exclusive trucks that visit customers in Europe
and the Americas, acting as a classroom for technical seminars
and a workshop for technical service support.
At NTN-SNR in Europe, the technical service team drives a truck
made to look like a giant tool box and appropriately called the
Bearing Box (BeBox). This truck helps customers around thecontinent choose and implement bearings, holds seminars that
introduce methods for inspections and troubleshooting, and provides
technical support.
In North America, NTN technicians and sales representatives
visit customers’ production sites in a 12-meter-long truck, called
the Technical Training Unit (TTU) and adorned with the NTN logo,
to provide technical service.
By providing this traveling technical service, NTN helps
customers become more knowledgeable about its bearings andmore aware of the NTN brand. The NTN Group plans to introduce
these mobile technical service units in China and other parts of Asia,and in Central and South America with the aim of promoting NTN’s
advanced expertise in bearings and to contribute to problem-solving
at customer companies.

29

TTU training van

The Americas

Up to 10 people can fit into
the training room

EuropeOffering technical support ata customer company

Bearing Box (BeBox)Major Service and Measures in the Aftermarket and Distributor Market
Maintenance of industrial machinery

Automobile repair (Auto parts)

We are meeting the demand for maintenance ofbearings used in industrial machinery, which must
undergo long periods of use under harsh conditions.

Bearings forsteel plants

Exchanging bearings in industrial
machinery (NTN-SNR)

Auto parts

Expanding the sales and technical service network
At a Glance

All over the world, NTN is expanding its sales
To Northeast
and technical service network forbearings for industrial machinery[ China ]and automobile repair.
Shenyang
Beijing
Beijing Branch
DalianNTN China Technical Center

TianjinTo Northwest

Xian To coastal and

Qingdaoinland regions
NanjingChengdu

Wuhan

Chongqing

Guangzhou Branch(Opened in July 2011)

KunmingNanning
Guangzhou(Opened in May 2011)

ShanghaiHangzhouShanghai Branch

To inland

Chongqing Branch

NTN China
Technical Center

FuzhouNanjing Branch

Hong Kong (Opened in October 2010)

Hong Kong Branch

Nanjing Branch, openedin October 2010

New Products
designed contact seal. This seal gives the bearings a long-life, high-reliability,
Development of Sealed Spherical Roller Bearing
and greater ease of maintenance, and it makes them ideal for use on
With Load Capacity Among the World’s Highest andindustrial machinery operating in extreme environments.
Superior Prevention of Foreign Matter Infiltration, These
Bearings are Ideal for Construction and Mining Machinery.
Sealed spherical* Photo is a cross-sectional model of product.
NTN has released a new sealed spherical roller bearing for preventing
infiltration of foreign matter. The ULTAGE WA type is a new addition
to the ULTAGE series of spherical roller bearings, which are used ina wide variety of systems including construction machinery, steel,mining, wind power, and paper manufacturing machinery.
Spherical roller bearings are often used outdoors or in extremely
dusty environments, so in addition to high load capacity they require
the ability to prevent the infiltration of foreign matter. Sealed sphericalroller bearings achieve airtightness through the use of a thin, speciallyroller bearing*30

Social andEnvironmental Responsibility

Responsibility to Customers

Another NTN site was certified for the ISO quality management system. (Page 32)
We work closely not just with our manufacturing and sales sites, but with business
partners (suppliers) and sales agents to ensure strict quality control throughout thevalue chain* and thus earn the trust of our customers.

ISO-certified sites

36* Value chain: A continuous process for creating added value in the manufacturing industry, all the way
until the product reaches the consumer.

sites

Responsibility to Suppliers

We support the environmental protection activities of our suppliers. (Page 35)
For small-scale suppliers that have trouble achieving ISO 14001 certification,
since 2003 we have been helping them achieve certification for the Eco-Stageand the Eco-Stage entry version, environmental management systems managed
by the Eco-Stage Institute. In the fiscal year ended March 31, 2011, four suppliers
achieved this certification.

Suppliers certified
for Eco-Stage32

suppliers

Responsibility to Shareholders

We stress communication with our shareholders and investors. (Page 36)
We have a number of ways to ensure smooth exercising of shareholder voting rights.
These include providing information in every way possible through IR activities suchas voting rights briefings four times a year, executive meetings and small-groupmeetings hosted by securities companies, and interviews with the media.

Participating investors

560

investors

Responsibility to Employees

NTN hosts many trainees from overseas group companies. (Page 37)
With about 60% of our worldwide employees outside Japan, we are active ininternational exchange activities that promote human resource development.
Whenever possible, we bring trainees from overseas group companies toJapan and send Japanese staff to help out at overseas sites.

Number of trainees fromoverseas companies

108

trainees

Responsibility to Local Communities

Kuwana Works joined the Kigyo no Mori activities. (Page 39)
Since the fiscal year ended March 31, 2003, the NTN Group has been protecting
forests around Japan through the Kigyo no Mori activities. We also get involvedin exchange activities with local citizens and carry out community service on aregular basis.

Sites involved in Kigyo no Mori

5

sites

Responsibility to the Environment

We focus on reducing CO2 emissions. (Page 41)
We succeeded in reaching our goal of total CO2 emissions
in Japan of less than 290,000 tons. We also achieved ourgoal for a CO2 emissions rate reduction of 18% comparedto the fiscal year ended March 31, 1998. We will continue
to reduce CO2 emissions at our sites in Japan and the restof the world.

31

CO2 emissions (in Japan)

290,000tonsSociety Responsibility to Customers
We work with suppliers and sales agents to raise quality andcustomer satisfaction throughout the value chain.
Quality Management Policy
Formulating and Strictly Implementing Annual Quality
Management Policies

In February 2010, NTN became Japan’s first bearing
manufacturer to obtain certification under the International Railroad
Industry Standard (IRIS), the quality standard for the European
railway industry. This achievement complements the quality

Quality management is fundamental to a “Monozukuri” company

management system certification of the Association of American

like NTN. We thus formulated a Basic policy of quality as a basic

Railroads that we received in December 1986 and underscoresconcept for “Monozukuri”.

our high quality as a supplier to the rail industry.

We also formulate quality control policies with each new fiscal
year so that we can continue to boost quality.

NTN has also been certified for the AS/JISQ9100 standards
for aerospace quality management.
We will continue to raise customer satisfaction and trust in

Basic policy of quality
Pursuit of appropriate quality which can suffice the functions
and specifications required by customers.
Quality that meets diversified needs in markets (Conformable quality)
Superior quality to competitors’ (Competitive quality)
Quality that benefits producer (Economic quality)

our company by improving and effectively running our quality
management systems.

Focus on Boosting Quality at All Worldwide Sites
In the fiscal year ended March 31, 2011, we strove to boost quality
at all worldwide sites in line with measures under our medium-term
management plan to reduce lead-time, handle small-lot production,

FY2010 Period Quality Management Policy
It is crucial that we continue to earn and increase the trust that
customers have in us as we boost our worldwide manufacturingsystem. To this end, we are aiming to achieve unquestionable,superior quality that contributes to corporate profits, and dramaticallyreduce the number of complaints and defective products.

and expand global manufacturing.
Executives at each NTN site personally visit plants to ensure
there are no problems with products and that issues inside plants
are being properly dealt with. Bases carry out cross-audits witheach other to confirm progress in quality improvement throughbetter processes, which allows them to identify issues with quality
control. All of this promotes the sharing of information and thestandardization of measures. As well, employees share information

Continuously initiate the practice of “easy-to-understanddesign, easy-to-manufacture, and mistake-proof products”

through the presentation of quality

2. Production

meetings on the improvement ofStop problems by starting at the source and the factory floor:(Raise awareness of quality among those employees actually making
the products so as to reduce complaints and product defects.)
3. SalesSocial and Environmental
Responsibility

1. Engineering

improvement case studies atquality and manufacturing
technology, and at quality control(QC) group conventions.

QC group convention

Improve customer satisfaction and solve problems from
customer's viewpoint
4. Logistics

Perform exhaustive activities
Quality slogan: Quality is our future

Quality Management System
Certification for NNMI in India
In the NTN Group, 34 production sites in Japan and overseas
and two sales sites have been certified for the ISO 9001 quality
management system. In the fiscal year ending March 31, 2012,
NTN Houdatsushimizu Corp. is scheduled to also be certified.
We are also working to get our sites in Japan and around theworld that produce automotive products certified for ISO/ TS16949,
the highest quality management standard and one that automotive
manufacturers demand that their suppliers achieve. In August 2010,
NTN NEI Manufacturing India Pvt. Ltd. (NNMI) was certified forthis standard. This means that all 21 NTN production sites thatmake automotive products are now certified.

Action at Overseas Sites: China
Shanghai NTN Corp. Conducts
Comprehensive Quality Inspections
Shanghai NTN Corp. conducts comprehensive quality inspections
so that it can identify problems and fix them.
Every two weeks, managers in charge of production, quality
assurance, and production technology conduct inspections to ensurethat proper procedures are being followed when there is an equipment
problem and stoppage; that products are being made according to
the blueprints; that equipment checks and maintenance are being
properly conducted; that safety records are being kept; and that
equipment is clean and orderly and that it is producing products ofthe proper quality, consistency,and quantity. Results arereported to the Management
Board and the person in
charge makes monthly reports
on improvement progress.
These activities have led to
improvement in product quality.
A comprehensive quality inspection

32

Society Responsibility to Customers

Working with Suppliers to Improve Quality

NTN sales companies in Japan conduct TQM (total quality

NTN strives to improve quality by holding supplier quality

management) activities, in which sales managers take education

improvement meetings with suppliers of our materials and parts,and training, as well as take part in weekly meetings that allow

and by conducting quality audits at supplier locations.

them to reflect on actions and progress. The goal is to have eachAt the annual supplier quality improvement meetings, we givequality improvement case studies and workshops by outside

sales manager think and act from the customer’s perspective.

that allow them to improve quality. In November 2010, we held a

NTN Holds Traveling Product Exhibitions andTechnical Seminars

meeting for 94 supplier companies at our Advanced Technology

We continue to send engineers to customer locations to holdR&D Center. There were presentations on improvement activities

traveling product exhibitions and technical seminars that givefrom suppliers that have been certified by NTN for excellence incustomers a chance to learn about the performance and features

the areas of quality, cost, and delivery. As well, an outside expert

of our products and technologies and speak directly to NTN aboutgave a lecture on how to eliminate human error. Participants

what they need and want.

instructors that help our suppliers acquire knowledge and know-how

praised the meeting for offering a chance to share excellent casestudies and learn new ways to approach quality improvement.
Quality audits are conducted by the suppliers themselves using

In traveling product exhibitions, NTN engineers go to customer
locations to showcase and publicize our products, as well as toascertain customer needs. In the fiscal year ended March 31, 2011,

NTN’s check sheet for quality criteria, and this allows quality

these events took place at customers dealing in EVs and HEVs

progress to be assessed. These audits have been conducted(electric vehicles and hybrid electric vehicles).

continuously since October 1994 and have helped suppliers build

At the technical seminars, engineers explain the technology

quality management systems, improve the level of process control,and handling of NTN products and listen carefully to customer

and prevent the reoccurrence of defects. In the fiscal year ended

questions and concerns.

March 31, 2011, during quality month at NTN (November) we asked

Through such direct dialog

our 274 suppliers in Japan to conduct audits to ensure they

between NTN engineers andare certified for and are operating in compliance with quality

customers, we can better

management system standards,

assess customer needs andand that they are properly

thus offer products that givecontrolling their management

customers greater satisfaction.

resources. Based on the audit

Building a Quality Control System Based on Customer
Satisfaction Surveys

results, NTN conducts its own
on-site audits at the locationsof suppliers and offers assistanceto those with quality issues.

A technical seminarOnce a year we gather information crucial to improving the level
A supplier quality improvement meetingof customer satisfaction by conducting customer satisfaction
surveys on our products and services. In these surveys, customers

Enhancing Customer Satisfaction
Marketing Activities that Take the View of Customers
and Sales Agents
In June 2006 we formulated our CSR Policy, under which westated our goal of striving to develop new technologies and new
products, as well as to provide safe and reliable products. We
seek to fulfill this policy by ensuring that all related departments
collaborate in all stages to boost customer satisfaction. These
endeavors encompass everything from identifying customer
needs to developing, designing, manufacturing, and delivering.
The foundation of this endeavor is to find out exactly whatcustomers want by putting ourselves in their position. All NTN
Group sales companies in Japan and around the world have not
only a sales representative for each customer and sales agent,
but also a technical manager. Through this system, we strive tounderstand the exact needs and wants of customers, and toquickly find problems and offer the customers ways to solve them.

33

Action at Overseas Sites: Europe
NTN-SNR Makes Technical Service
Calls through “BeBox”
NTN-SNR Roulements (NTN-SNR) in France has service teams
handling maintenance and other forms of technical service training,support, and analysis. To build a closer relationship with customers,in the fiscal year ended March 31, 2009, the teams began the
Bearing Box, nicknamed “BeBox,” activities. Driving a special
vehicle shaped like a large tool box, the teams take tools needed
for training and workshops and visit customers around Europe toprovide service and instruction as bearing experts.
In the fiscal year ended
March 31, 2011, the teams
made 43 visits to customers
in France, Germany, Spain,
Belgium, and other countries.
Bearing Box

choose one of four levels of satisfaction in six survey items including

agents so that they can relay all the necessary information to their

quality, cost, and delivery. Survey results go to relevant company

end-users. We also regularly hold a variety of workshops for new

divisions to be reflected in improved products and services.

employees and mid-career employees to give them a deeper

In the fiscal year ended March 31, 2011, 74 customer companies

understanding of our products and technologies.

in Japan and other countries responded to the survey. Responses

In the fiscal year ended March 31,

in the level of “very good” or “good” for overall assessment were2011, we welcomed 58 sales agents

85% of total, the same as in the fiscal year ended March 31, 2010

to a meeting of our Domestic Sales

survey. However, in the quality survey item, only 77% of respondents

Agent Association to strengthen

replied “very good” or “good,” eight points below the previous year.

relations. Overseas, sales companies

Reasons for the drop included customers saying that they are lessin various countries conductedcertain of quality due to an increasing percentage of NTN production

activities that strengthened ties withbeing conducted outside Japan.

their sales agents.

Domestic Sales Agent Association
members visit an NTN plant

As a result, NTN set its sights on building a system that will allow
quality control on a global level. We are now building a system
under which we can carry out centralized control of information

Protecting Customer Information

We are positioning global quality control as a top priority that weDiverse Methods for Promptly Dealing with Information
Leak Risk

will continue to pursue with the aim of customer trust in our products.

Information is being sent and received in an increasing number ofon quality problems at any base in the world.

ways, and this means increasing risk of information leaks, as

Overall assessment of customer satisfaction surveys

evidenced by frequent cases of customer information being(Fiscal year ended March 31, 2011)

Needs a lot of improvement

Very good

23 %

0%

15 %

Customersatisfaction
Fiscal year
ended March
31, 2011

In the fiscal year ended March 31, 2004, NTN formulated its
Basic Policy on Information Security. The Information Security Guideon the NTN intranet contains items like the Information Security

Good

62 %

Handbook and tests of employee level of understanding on
information security; the aim is to make all employees aware of theproper ways to handle information at NTN. Sales sites in Japan havea Classified Information Protection Manual that details how to prevent

Working with Sales Agents to Improve Customer Satisfaction
We collaborate with agents selling our products in efforts to improvecustomer satisfaction.
When we release new products, we hold briefings for sales

Action at Overseas Sites: Panama
Technical and Sales Seminars for Sales
Agents in Panama
To strengthen ties with dealers in Central and South America andthe Caribbean, in September 2010, NTN Sudamericana, S.A. helda technical and sales seminar to coincide with its 35th anniversary.
In training to improve dealers’ knowledge about products,
participants learned about the wide range of bearings that NTN
provides for the automobile and industrial machinery fields.
Participants had praise for the seminar, commenting that they are
confident of establishing firm business footing in the region thanks tothe partnership with NTN. The
event strengthened ties on anumber of levels as participants
actively exchanged information
among themselves.

information leaks. And all employees who carry company laptop
computers are required to take the NTN Mobile Information Pledge
All portable computers also have data encryption software, andin the near future they will have software that restricts the use of
USB flash drives.

A Word from a Customer

Praise for BeBox Practical
Training

Julien LARROUDE
Maintenance Coordination Manager
Seretram Geant Vert (General Mills Group)

There are many employees, mainly new ones, who really want tobrush up their techniques and knowledge in handling bearings sothat they can better carry out maintenance of production equipment.
That’s why we took advantage of the BeBox service provided by
NTN-SNR. In the training, participants learned about bearings andgot practice in the procedures for installing and removing them. There
was also a session in which NTN-SNR representatives responded
to technical questions that our company had about the equipment
we use. I am grateful to the highly experienced NTN-SNR trainers
for giving even our veteran engineers valuable information.

Technical and sales seminar

34

Social and Environmental
Responsibility

Needs slight
improvement

made public.

Society Responsibility to Suppliers
We’re building a partnership with suppliers for quality control
and environmental protection.
Procurement Policy
New Policy for Procurement

Since the fiscal year ended March 31, 2007, we have shared
the joy of mutual growth with our suppliers by holding annual
commemorative cherry tree-planting activities on their premises.

In December 2010, NTN formulated a new procurement policy
focusing on global procurement, fairness, and equality.
We have also formed a project team to speed up the movement
towards local production and local procurement, and to this end
we are in the process of forming partnerships in various regions.

Supporting Suppliers in Acting Responsibly
Helping Responsible Suppliers Obtain Environmental
Management System Certification
Our Environmental Management Rules state that we must

Basic procurement policy
1 We stress quality, cost advantage, and on-time delivery
from a global viewpoint, and we pursue stable procurement
through prompt response to market changes.
2 We abide by laws and ethics, and we promote fairness
and equality in business.
3 Through procurement activities, we strive to conductbusiness in a manner that protects the environment andpreserves resources.
4 We deepen understanding with suppliers, and we aim tocreate a partnership founded on trust that generates
mutual prosperity.

conduct green procurement by giving priority to the purchase ofenvironmentally friendly raw materials and parts. We give our
suppliers our Green Procurement Standard for rules on these
eco-materials.
We urge our suppliers to receive certification for standards likeISO 14001 and EcoStage*1. For relatively small-scale suppliers
that have trouble achieving ISO 14001, experienced former NTN
employees act as consultants to these suppliers and help themachieve certification for the EcoStage and the EcoStage entry
version*2. Thanks to this
support, by the fiscal
year ended March 31,
2011, 32 suppliers had

Maintaining Fair and Proper Business Relations
Internal Audits Ensure Thorough Subcontractor Businessreceived EcoStagecertification, with another12 qualifying under the

Approximately 80% of NTN suppliers are covered by Japan’s

EcoStage entry version.

Subcontractor Act. We therefore have a responsibility to conduct*1 EcoStage: The environmental management system of EcoStage Institute.
*2 EcoStage entry version: NTN proposed this EMS to EcoStage Institute.
It was adopted as a trial certification level in 2004.

fair business dealings with our suppliers.
Since establishing our Voluntary Audit Manual for Subcontractors

Support in achieving EcoStage certificationin January 1997, production sites have been conducting voluntary
audits to ensure they are abiding by the Subcontract Law. Whennecessary, NTN’s procurement division intervenes with audits andguidance. We also require all procurement managers to attend
subcontractor business workshops sponsored by the Japan Fair
Trade Commission and seminars held outside NTN.
In the fiscal year ended March 31, 2011, 15 production sites
in Japan held voluntary audits, with five of these requiring intervention
by NTN’s procurement division. Production sites that had issues
were examined for progress in improvement and given guidance.

Communication with Suppliers
Earnest Dialog Brings Mutual Growth
NTN holds “Responsibility to Suppliers” meetings, where we explain
our procurement policy and trends in production volume at each of
our operating sites, and urge suppliers to cooperate in manufacturing
and achieve certification for quality and environmental management
systems. In the fiscal year ended March 31, 2011, we held twoof these meetings for 57 participating companies.
We also invite suppliers to lectures given by outside expertsthat we hold as part of our employee training.

35

A Word from a Supplier

Striving to Raise Quality andProtect the Environment toGrow as Good Partners

Yasuaki Takeuchi
President, Toshin Nekko Co., Ltd

We are a heat processing specialist with four factories around Japan.
We perform heat processing on NTN products. Because we areaware that our quality is directly tied to the quality of NTN products,
we strive to consistently improve product quality and protect theenvironment. Since last fiscal year we have been conducting integrated
efforts towards ISO 9001 and 14001 certification, doing everything
possible to share information among employees and make all efforts
and their effects highly visible. This has led to increased employee
awareness of quality and the environment. We also have our executives
conduct an audit of all factories once every two months. We willcontinue to attend Responsibility to Suppliers meetings and seminars
to receive direction from NTN so both companies can grow together.

Society Responsibility to Shareholders
We release information in a timely, appropriate manner so that we canreflect the wishes of our many shareholders in company management.
Streamlined Procedures for Shareholders
to Exercise Their Voting Rights
Boosting Attendance at General Shareholder Meetings
through Early Notice and Convenient Dates

results, annual and business reports, and materials from our resultsmeetings. For those who register on our website for the NTN
newsletter, we send an email with the latest news as soon as it
appears on our home page.
We also have an English IR site and an NTN Report in English

We have taken the following steps to streamline procedures forso that we can provide our international investors with information

shareholders to exercise their voting rights:

in a fair manner.

• Swiftly mailing our general shareholder meeting notice: The law

Other ways that we serve our international investors in the samesays that shareholders must be notified two weeks prior to amanner as our investors in Japan are conference calls and theshareholder meeting, but we send our notices six days earlier

hosting of individual visits to NTN. With the increasing number ofthan that.

inquiries from international investors, we strive to constantly provide• Scheduling meetings that avoid the dates that most companies

improved information services.

set for such gatherings: We do this because we want as many
shareholders as possible to attend, taking into account suchfactors as settlement and audit schedules.

IR Activities• Broadly notifying of our general shareholders meeting through the

NTN Top Management at the Forefront of IR Activities

internet and other media: We disclose our general shareholders

Members of NTN’s top management lead our company’s aggressive

meeting notice and other information through the Tokyo StockIR efforts.

Exchange and through our website to reach as many shareholders

At seminars for individual investors hosted by large securities

and investors as possible. And for the sake of institutional

companies, NTN top management talk about our company. They

investors in Japan and other countries, we participate in thealso host visits to production sites in Japan.

Electronic Voting Platform, which is managed by Investor

On a regular basis, our executives convene results meetings,

Communications Japan (ICJ), an entity formed by the Tokyo

teleconferences, one-on-one gatherings, and other regular briefings

Stock Exchange and other bodies.

for analysts and institutional investors. They also respond whenever
there are questions or requests from investors. In the fiscal year

votes via mail and the Internet through the 5:25 p.m. close ofended March 31, 2011, we accommodated investor requests forbusiness up to the day before the general shareholder meeting.

production site visits and meetings.

2 We have methods for dealing with cases in which there are

In the fiscal year ended March 31,

overlapping votes by mail and the Internet, or where shareholders

2012, we plan to make timely visits tovote multiple times over the Internet.

institutional investors in the Americas,• Other efforts: We present some of the business report andsettlement data as graphs,

Europe, the Middle East, and Asia forpresentations and other activities.

Investors visit an NTN factory

photos, and other visuals to

SRI Included in SRI Indicescomplement the meeting
chairperson’s explanations and

NTN Continues to be Included in Numerous SRI Indicesmake information in shareholder
meetings easier to understand.

General Shareholder Meeting

NTN has been included in several socially responsible investment(SRI) indices in the stock market for its aggressive efforts to protect

Prompt, Accurate, and Fair Information Disclosure

the environment and contribute to society.
In Japan, we have been chosen for the Morningstar CSR

Fair Information Disclosure Worldwide

Investment Register every year since July 2003. Outside of Japan,

NTN strives to disclose information promptly, accurately, and

NTN has been chosen since September 2002 by the FTSE4 Good

fairly with regard for shareholders and investors.

Global Index and since December 2005 by the Ethibel Pioneer

We satisfy timely disclosure requirements under Securities

Investment Register and the Ethibel Excellence Investment Register.
(Information current as of August 2011).

Listing Regulations by presenting
information through the Company
Announcements Disclosure Service
on the website of the Tokyo Stock
Exchange. On the NTN website, we

Morningstar CSR
Investment Register

release timely information including our
securities, quarterly report, business

English site

FTSE4Good
Global Index

The Ethibel Pioneer
Investment Register
The Ethibel Excellence
Investment Register

36

Social and Environmental
Responsibility• 1 Using electronic voting via the Internet: We accept shareholder

Society Responsibility to Employees
We respect the individuality and diversity of employees while
striving to create a safe, comfortable workplace.
Improving Levels of Occupational Safety and Health
Promoting a Safe and Comfortable Workplace

members and supervisors, while employees receive counseling fromoutside counselors during regular health check-ups. Other ongoingmental health support for employees includes NTN’s in-house

We work to create safe work environments based on a “safety first”

counseling service, the Oasis NTN program twice a month, and thespirit that respects people. We have therefore created a safety and

Mental and Physical Health Counseling Service via phone or email.

health management system based on the criteria of the Occupational
Safety and Health Management System (OSHMS). As of the fiscal
year ended March 31, 2011, all seven operating sites of the NTN

Human Resource Development

Group in Japan had been certified by the Japan Industrial Safety

Ongoing Education and Exchange at All Worldwide Sites

and Health Association. In the fiscal year ending March 31, 2012,

About 60% of NTN’s employees work outside Japan, and this will

we plan to achieve certification for NTN Omaezaki Corp. as well.

increase as we expand our business overseas through local production

In the fiscal year ended March 31, 2011, we had five key tasks:and procurement. Accordingly, we are promoting international(1) conduct thorough education on safety and health, (2) eliminate

exchange whenever possible in the development of the human

workplace accidents, (3) promote physical and mental health,resources who run our local production bases around the world.

(4) have measures for contagious diseases, and (5) improve theIn the fiscal year ended March 31, 2011, 108 employees fromlevel of safety and health in the NTN Group. We placed particulargroup companies in China, the U.S., France, and other countries

importance on giving skills education to management members

took training in Japan involving technical learning and exchange.

and supervisors heading safety and health activities; and basic

We also have an overseas training system in which we send

knowledge education to young and inexperienced employees,

Japanese employees to overseas sites so that they will develop into

who are the most likely to have workplace accidents. New

persons capable of leading NTN’s international business expansion.

employees are given safety and health education, and firsthandIn the fiscal year ended March 31, 2011, three NTN employees fromexperience through training that simulates getting sandwiched inJapan went to group companies in China and France. As well, fourmachinery, which is the type of accident most likely to occur.

employees took part in a program in which employees study at

In the area of mental health, we hold regular training for management

acquire the necessary specialized knowledge.

Incidence rate
2.00
1.50
1.00
0.50
0

1.90

1.83

NTN

National average for Japanese industry

1.75

1.62

0.34

0.26

0.08

0.18

2007

2008

2009

2010

1.61

NTN

include education for supervisors, the Meister and Junior Meister*

0.58
2011 (Years ended

employees led by former NTN employees.
* Meisters, Junior Meisters: Employees who have high levels of knowledge andMarch 31)

0.05
0

0.110

0.100

0.090

0.090

0.004

0.002

0.002

0.006

0.011

2010

2011 (Years ended
March 31)

2007

2008

2009

Action at Overseas Sites: Thailand
Occupational Safety and Health
NTN Manufacturing (Thailand) Co., Ltd. manufactures automobile
parts and bearings for hard disks. In these processes, employees
are at risk of getting sandwiched or caught in machinery, so thecompany works to prevent these by distributing a safety handbook,holding thorough safety education,and convening meetings of the
Safety Committee.
For employees who are
pregnant, we offer support suchas longer break times and leave
Safety handbookof absence for hospital visits.

37

skills, and a wealth of practical experience recognized company-wide, andwho can lead the next generation of technical skill at NTN.

National average for Japanese industry

0.120

0.10

We will continue to develop personnel who can handle jobs at
production sites: programs both in Japan and other countries will
systems, and skill and technical training for young and mid-career

Severity rate
0.15

sites in Japan or other countries (on scholarship) so that they can

A Word From an Employee
Hongyuan Zhu
Assistant Plant Manager, Plant No. 4
Shanghai NTN Corp.

For about three months in 2010, I was at NTN
Mie Corp. to take training in the products that
we make at Shanghai NTN. I am very gratefulfor the meticulous guidance I received while in Japan. I am now putting
all my effort into using the knowledge and skills I learned and working
with my colleagues to succeed in new business areas.

Junfeng Sun
Head of NB Section, Plant No. 4
Shanghai NTN Corp.

For six months starting in July 2010, I trained at
the needle bearing plant of Iwata Works. Thanks
to the thorough guidance of my instructors,
I was able to learn the production-related control
methods of the mother plant. With support from Japan, all of us at
Shanghai NTN will go all out in the manufacture of needle bearings.

Emphasizing Employee Diversity

As of March 2011, nine disabled persons worked in these workshops

Support for a Balance of Work and Child-Raisingunder instructions from experienced employees.
As of March 1, 2011, disabled employees accounted for

NTN stresses a work-life balance, particularly in helping employees

1.74% of all NTN employees, due to thework while raising a child.

increase in the hiring of non-regular

In the fiscal year ended March 31, 2011, seven employees

employees. This is below the legal figure

applied for the Mom-back system, under which employees canof 1.8%. However, we expect to raise

seek re-employment after temporarily resigning to raise children.

this to above the legal figure within the

In the fiscal year ended March 31, 2008, we started the Bear Kids

fiscal year ending March 31, 2012.

Bearing assemblyat Dream Workshops

Land, a place within the company where parents can leave theirchildren on a monthly basis to be taken care of while working. In
the fiscal year ended March 31, 2011, 49 employees applied for

Respecting Human Rights

under our Child-raising Support

Building a Fair and Equitable Workplace with Respect for
Human Rights

Declaration system, employees

Based on our CSR Management Rule and our Business Code of

write a child-raising plan andConduct, we strive to create a fair and equitable workplace

schedule that is shared with theenvironment, respecting human rights and ending discriminatory

this service, with seven making use of it (as of March 2011). And

entire workplace so that support

acts in the workplace.

is available.

Bear Kids Land at Iwata Works

We strengthen respect for human rights in many ways. For
example, we hold classes on the subject in training for new

Giving Opportunities for People to Use Their Abilities
after Retirement

employees, supervisors, and managers. We participate in theactivities of regional human rights organizations and take part in avariety of human rights exhibitions and seminars. We also have

In the spirit of the Revised Law Concerning Stabilization ofHelp Lines inside and outside the company that make it easy for

Employment of Older Persons, NTN has since 2006 had a system

employees and others to seek advice.
We also have measures to deal with sexual harassment andof those in their early 60s). This contributes to stable employment

power harassment, and in the fiscal year ended March 31, 2011

for our older employees.

managers underwent training.

This system is for employees who satisfy all employment
standards such as willingness and desire to work, attitude, health,and strength. They can choose from the Skill Transfer or Full

Rewards for Employee Inventions

Excellence options in this program. The Skill Transfer allows

Rewarding employees’ inventions

participants to pass on their technical skills, abilities, and professional

To reward our employees’ inventions and to improve our technicalknowledge to young employees. The Full Excellence option allows

competitiveness, we have established a Patent Management Ruleparticipants to utilize the skills they have developed through the years

and a Patent Reward Rule and we have clarified how patent rights

to work. In the fiscal year ended March 31, 2011, we re-employed

are attributed and how the value of the award is calculated. Rewards

194 individuals (including those renewing under this program).

are also made for foreign patents and for know-how and inventions

Giving the Disabled a Place to Be in Command
NTN strives to give disabled employees the chance to contributeconsidered to be trade secrets. There is no upper limit to actual awards.
In the fiscal year ended March 31, 2011, 144 employees wererewarded for obtaining rights for 110 patents.

to the company just as much as everyone else.
As part of this commitment, we created “Dream Workshops”
at Iwata Works, Kuwana Works, and Okayama Works in 2004.

Kaori Tomoda

Number of employees(Persons)

Consolidated regular employees

25,00020,00017,306

18,960Non-consolidated regular employees (female)Non-consolidated regular employees (male)

20,67917,95919,172

15,00010,000
5,000
0

434
5,011
2007

435
4,976
2008

A Word From an Employee

464
5,021
2009

477
4,944
2010

474
4,974
2011

(Years ended March 31)

Drive System Technology, EV Systems Group, NTN

I am currently working on getting in-wheel motor
products for EVs to market. In my department,
if you can show logically what you want to do,then you can do the work you want whether
you are male or female. There are also systems that allow women to
return to the workplace after taking leave for child birth or child care.
By taking advantage of these systems and this favorable atmosphere,
I hope to polish my skills and take an active role in helping NTN expand
its international business.

38

Social and Environmental
Responsibility

under which retirees can be re-employed (system for re-employment

Society Responsibility to Local Communities
We strive to protect the environment and contribute to society
as we conduct ongoing activities that help local communities.
Environmental Protectionof Automotive Engineers of Japan. In this event, students compete

Growing NTN Kigyo no Mori Throughout Japan
Since March 2003, we have been helping preserve forests throughin planning, designing, and building formula race cars. The aim is
to nurture the next generation of automotive industry leaders.
At the eighth edition of this event in 2010, besides being asponsor, NTN provided free-of-charge products like constant-velocity

our Kigyo no Mori activities.
We have so far been conducting these at Iwata Works, Okayama
Works, Nagano Works, and NTN Kinan Corporation, and in thefiscal year ended March 31, 2011 Kuwana Works joined thejoints and bearings, as well as technical guidance. For the past
three years, the top six teams have been supported by NTN.

Kigyo no Mori Activities. We will continue to expand this initiative

Sponsorship of Cross Country Race (France)

to other regions of Japan.

NTN Transmissions Europe (NTE) in France has sponsored thePlanting Seasonal Flowers in Parks (Shizuoka, Japan)

Cross d’Allonnes international cross country race since 2000. In theNovember 2010 edition, there were approximately 5,000 participants

NTN Omaezaki Corp. plants flower beds twice a year, in springfrom nine countries. From NTE, 19 employees took part in the race,

and autumn, in Yachiyo Park in Omaezaki City.

and many other NTN employees worked as volunteers.

In the fiscal year ended March 31, 2011, volunteer employees

Exchange and Cooperation with Communities

planted American Blue and Gazanias
in spring, and North Poles, ornamental

Donating Blood Regularly for Over 20 Years(Okayama, Japan)

cabbages and chrysanthemums inautumn. This is the fifth year of thisactivity and we plan to continue it ona regular basis.

In August 2010, the Okayama Works was honored by Japan’s
Flower beds in Yachiyo Park

Ministry of Health, Labour and Welfare for contributions to blood
donor clinics sponsored by Okayama Prefecture and the Japan

Sponsorship of E-Cycling (United States)

Red Cross.

In April 2010, NTN-Bower Corp. in Illinois State in the U.S. sponsoredThis honor recognizes more than 20
years of regular participation in blood donor

an event called E-Cycling.
The company called for the proper recycling of used electronics

clinics. Twice a year, about 100 Okayama
Works employees give blood at clinics.

like computers and TVs so as to help
prevent pollution caused by the illegal
disposal of these. Many households inSponsorship of the Japan Festival (United States)

the community brought in their used

NTK Precision Axle Corp. (NTK) in the U.S. is a regular sponsor

appliances for this event.

of the Japan Festival, held every two years at the Frankfort Public
E-Cycling event

Promoting Art and Sports

Library in Indiana.
At the fiscal year ended March 31, 2011 edition of this fair for

Promoting Sports through the NTN Track Club (Japan)

introducing Japanese culture, participants enjoyed a performance ofbiwa (Japanese lute) and tried their hand

The NTN Track Club has taken part 47 times in the All-Japan

at kingyo sukui (catching goldfish).

Corporate Ekiden, and we use this experience in coaching junior

NTK employees and family members

and senior high schools, and taking part in regional competitions

worked as volunteers managing andas both organizers and athletes.

setting up the site as well as helping

Yukihiro Kitaoka of the NTN Trackvisitors enjoy themselves.

Club won a silver medal in the marathon

Participants try catching goldfish

at the Guangzhou Asian Games inHigh Rating for Labor Standards (China)

November 2010. He also represented

Guangzhou NTN-Yulon Drivetrain Co., Ltd. in China was given a

Japan in the marathon in the IAAF

triple-A (AAA) rating for labor-management relations by theWorld Championships in September
2011 in Daegu, South Korea.

Yukihiro Kitaoka (number 393)
in the Asian GamesNTN Provides Technical Guidance and Products at the
All-Japan Student’s Formula Contest

government department in charge of labor in Guangzhou City.
The rating recognizes Guangzhou
NTN’s favorable labor-management
system, as well as other social
contributions such as tuition fee

Since the fiscal year ended March 31, 2003, NTN has supported

subsidies to low-income families with

the All-Japan Student’s Formula Contest sponsored by the Society

children in the neighboring areas.

39

Tuition fee subsidies to local children

Great East Japan Earthquake: NTN’s Situation and Response
NTN expresses its deepest condolences to all those who
suffered from the March 11 Great East Japan Earthquake.
We pray for early recovery for the victims of this tragedy.

Immediately after the Earthquake
Based on our Risk Management Rules, immediately
following the Great East Japan Earthquake, NTN set up a
central emergency task force made up of executives anddivision heads, which led efforts to confirm people’s
whereabouts, gather information, and conduct emergency
support activities.
Damage Situation• There were no injuries or deaths among NTN employees
and their families.
• Property damage included products falling down at
the East Japan Distribution Center and cabinets
being overturned at the Tohoku Branch and Ibaraki
Sales Branch.
Aid Supplies
We provided food and daily necessities to employees
and their families, customers, and sales agents.
Support for Customer Recovery
For customers whose production equipment was
damaged in the disaster, NTN sent production engineers
to customer factories to help get equipment back online.

Monetary Donations

Support for Employment
In response to losses of workplaces and homes from thedisaster, NTN offered housing and employment support.
Although there has only been a small number ofapplicants and persons hired so far, we will continue these
employment support efforts.

Managing Disaster Risk
NTN has a risk management system under which we
conduct ongoing control based on our Risk Management
Rules.
In emergency situations, we promptly implement our
emergency management system in several steps:
1 The Emergency Management Center begins gathering
information.
2 Based on this information, we decide what level theemergency is.
3 If necessary, we set up a central emergency task force
and begin implementing initial measures. Following
the recent Great East Japan Earthquake, we wereable to promptly relay and gather information, which
helped us quickly assess the extent of damage.

Electricity Saving Measures
The Ministry of Economy, Trade and Industry put into
action restrictions on the use of electricity by major usersof power in the service areas of Tokyo Electric Power
Company and Tohoku Electric Power Co., Inc.
Although NTN does not have sites in either of these
service areas, nuclear power plants run by utilities suchas Chubu Electric Power Co., Inc. and Kansai ElectricPower Co., Inc. decided to stop operation, so the summerof 2011 saw severe electricity shortages.
In response, NTN cut back on peak summer electricity
use and reduced its overall consumption of electricity.
Several NTN production and sales sites have alreadystarted thorough measures for dealing with customers, andto get cooperation on leveling off electricity demand, for alimited time they are changing their days off to coincide withthose of customers (from Saturday to weekdays). We arealso conducting electricity saving measures that include
cutting back on lighting use, adjusting air conditioning
temperatures, and installing inverters on equipment.

Social and Environmental
Responsibility

NTN donated 100 million yen to the Japan Red Cross
to aid in the recovery of disaster victims and disasterstricken areas.
NTN executives and Group employees in Japan andother countries donated a total of 22 million yen.

When there is a disaster, we have telephone and Internet
information on people’s whereabouts, and in June 2005
we introduced a whereabouts confirmation system basedon information that people submit on their whereabouts.
Several times a year we have drills on registering for thissystem. During the recent earthquake, this system was used
to confirm the whereabouts of employees and their families
and to let employees know if they should go to work.
In September 2010, the Iwata Works and other bases
held drills that simulated the situation of a major earthquake inJapan’s Tokai region. The drill assumed that lifelines had been
cut off, that main roads and bridges were unusable, and that
25% of homes in the west of Shizuoka Prefecture had been
destroyed. In this situation, employees had drills in evacuation,
whereabouts confirmation, communications, fire extinguishing,
and water purification for drinking and making rice.
However, the Great East Japan Earthquake made usaware of many things we still need to improve on regarding
business recovery and continuation. Accordingly, we will
re-examine our existing measures in order to improve our
response to disaster risk.

Iwate Prefecture
Miyagi Prefecture
Tohoku Branch

Fukushima
Prefecture

Epicenter

Ibaraki Prefecture
East Japan Distribution Center
Ibaraki Sales Branch: Sites partially affected by the disaster

40

Environment Environmental Management
We constantly improve our environmental management
through internal audits, education, and training.
Environmental Policy and Management Rules

Environmental Management System

Improving Our Management System Through Revision
of Environmental Management Rules

Multi-Site Certification* Helps More NTN Sites,
Including R&D Sites, Achieve ISO 14001 Certification

Based on the NTN Environmental Policy, the purpose of which

NTN is obtaining ISO 14001 certification in Japan under multi-site

is to reduce environmental impact and ensure our company’s

certification so that it can build an environmental management system

continuous development, we have built an environmental

consistent over all sites. As of the fiscal year ended March 31, 2011,

management system centered around the Company-wide

15 sites had been certified under this system and one site had been

Environmental Management Committee.

independently certified. In the fiscal year ended March 31, 2011, 19

In January 2011, we revised our Environmental Managementof all 22 sites were included in multi-site certification, including NTN

Rules to make them and all other NTN rules consistent. During

Kamiina Corp., NTN Bizen Corp., and Research Institute of Advanced

an external ISO audit, it was pointed out that our Environmental

Technologies, which is the first NTN R&D site to be certified. In Japan,

Management Manual contained too much paperwork in case of

NTN Houdatsushimizu Corp., NTN Shika Corp., and NTN Hakui

emergency, so we revised it to ensure smooth operations in such

Corp. are scheduled for certification in July 2012. Overseas,

emergencies. In line with the revisions mentioned here, all NTN

NTN NEI Manufacturing India Private LTD. was certified in June

sites revised their relevant regulations and procedures.

2011 and all of the total of 15 sites have been certified.
Under our environmental management system, our goal is toEnvironmental Policy

have future production sites achieve certification within three years

Harmony with the global environment is our most important
issue and we will continuously strive to contribute to theharmonious development of society and work to reduce theimpact of our corporate activities on the environment.

* Multi-site certification: Rather than have each site certified separately, have

1. Development and sales of environmentally-friendly productsof the startup of operations.
multiple sites certified simultaneously.

Operating sites with ISO 14001 certification• NTN will contribute to world-wide energy conservation by
developing and providing eco-products using tribological
technologies and high precision processing technologies.

Company

2. Reduction of environmental impact• NTN will work to prevent global warming by improving energy
efficiency activities throughout the business process, fromprocurement of materials and parts, through to manufacture,
distribution and sales.
• NTN will strive to reduce waste by paying heed to efficient useof raw materials, and thorough application of the 3Rs (reduce,reuse, recycle).
• NTN will avert environmental pollution by rigorous managementof substances having an environmental impact that are used in
products or processes, and by active substitution of chemical
substances suspected of having harmful effects.

3. Observance of laws and regulations and implementationof thorough environmental management systems• In addition to observing laws, regulations and ordinances,
NTN will actively seek to comply with requests from regional
communities and customers by imposing tighter self-determined
standards and internal rules, and keeping to them.
• NTN will establish an environmental management organizationand operational methods, and will conduct environmental audits
to maintain and improve corporate environmental management
systems. We will also advance communication with society atlarge by publishing information about our environmental initiatives.
• NTN will conduct environmental education. NTN will promote
improved awareness of this Environmental Policy and environmental
protection to all persons working on behalf of the NTN Group.

4. Activities to contribute to society and protect thenatural environment• By actively participating in regional social contribution activities
and natural environmental protection activities, NTN will interact
with the immediate community, aiming to develop together
with the local region.
March 1, 2009
Person responsible for company-wide environmental controlling
NTN Corporation

41

Date ofcertification

Operating site
Region
Plant

Multi-site certification

Japan

Registration

Registration Registration
Year MonthNo.
body
1999 11JSA
JSAE176(Operating sites included)
Head Office, Kuwana Works, Iwata Works, Okayama Works, Nagano Works,
NTN Kongo Corp., NTN Mikumo Corp., NTN Engineering Plastics Corp.,
NTN Powder Metal Corp., Hikari Seiki Industry Co., Ltd., NTN Casting Corp.,
NTN Omaezaki Corp., NTN Mie Corp., NTN Fukuroi Corp., NTN Kinan Corp.,
NTN Kamiina Corp., NTN Bizen Corp., Research Institute of Advanced technologies

2005

3

JSAE1058

JSA

American NTN
Bearing Mfg. Corp.

Elgin Plant

2000

6

111994

LRQA

Schiller Park Plant

2000

9

112115LRQA

NTN-Bower
Corp.

Macomb Plant

2000

6

111998LRQA

Hamilton Plant

2000

6

111999LRQA

NTN Driveshaft, Inc.

1999

12

A8478

UL

NTN USA Corp. Head Office

2000

4

0112005LRQA

NTK Precision Axle Corp.

2008

4

4000717LRQA

NTN Bearing Corp. of Canada Ltd.
NTN Kugellagerfabrik(Deutschland) GmbH

1999

7

287

KPMG

1999

6

201167-2

LRQA

FranceNTN Transmissions Europe
NTN-SNR ROULEMENTS *

2003

1

19479

AFAQ

2009

1

0448-4

UTAC

ThailandNTN Manufacturing(Thailand) Co., Ltd.

TÜVNTN Tado Corp

U.S.A

CanadaGermany

China
India

2003

3

31634

Guangzhou NTN-Yulon Drivetrain co., Ltd. 2005

4104043247

TÜVShanghai NTN Corp.

2005

7

CH05/0489

SGS

NTN NEI Manufacturing India Pvt. Ltd.

2011

6

104071903

TÜV* Multi-site certification

Operating sites expected to be ISO 14001 certified
Operating site

RegionJapan

Date of certification
Year

Month

NTN Hakui Corp.

2012

7

NTN Houdatsushimizu Corp.

2012

7

NTN Shika Corp.

2012

7

Performing Environmental Audits

Environmental Education

ISO 14001 External Audits Along With Internal Audits
and Cross-Audits

Raising Environmental Awareness Through Constant
Education and Training

NTN undergoes external audits by ISO 14001 certification

In an effort to increase environmental awareness, NTN provides

institutes, as well as internal audits (once a year) and cross-audits,

continuous environmental education for management, newwhich are conducted between operating sites. This ensures thatmanagers, and new employees.

the PDCA cycle (plan, do, check, action) is carried out inenvironmental preservation activities.

In the fiscal year ended March 31, 2011,
employees from Shanghai NTN Corp. joined

The Internal Environmental Audit Manual ensures that audits areenvironmental education that included waste

conducted effectively by detailing the roles of internal audits andtreatment. They also took part in the Kigyo Trainees from China takecross-audits, as well as all processes, from planning and implementation

no Mori activities, in which they worked withof audits to summary reports and improvement measure reports.

eagerness and interest as they cleared underbrush, planted trees,

In the fiscal year ended March 31, 2011, internal audits wereenvironmental education
at Iwata Works

fixed a hiking path, and made birdhouses for wild birds.

conducted at all sites and cross-audits at nine sites. Results of external

NTN also strives to raise environmental awareness at home.

audits cited four matters, including issues pertaining to document

Since January 2008, all NTN employees, sales agents, and suppliers

management. However, the Group

have been filling in Household Eco-Account Books provided by

was able to maintain its environmental

NTN. These books allow participants to convert their household

management registration since all correctiveenergy consumption into CO2 emissions. In the fiscal year ended

measures put forth were deemed effective

March 31, 2011, these were distributed to approximately 2,500

for preventing any reoccurrence.

ISO external audit

Training for ISO Internal Auditors
In November 2010, an outside instructor led training at Kuwana

people, with a 32% participation rate.

Efforts Towards Biodiversity
Preserving and Repairing the Natural Environment Around Sites

audits and cross-audits and increase the number of internal auditors.

Around NTN sites, employees are working to preserve the natural

The training was attended by 28 employees from 19 sites, including

environment and repair natural forests and locally managed forests.

three sites that are scheduled to be included in multi-site certification

Activities in Japan include planting

starting in July 2012. Participants got an overview of ISO 14001,

mountain cherry trees and other deciduous

acquired the knowledge needed to be an internal auditor, reviewed

trees in the NTN Komorebi no Mori at thecase studies that gave them practical techniques in auditing,Kuwana Works, building birdhouses at theand learned the most important points in conducting an audit.

Iwata Works, and cleaning up the habitat

Some of the trainees will now be appointed to conduct crossaudits and further improve their skills in carrying out actual audits.

Kuwana Works Event in the
NTN Komorebi no Mori

of fireflies at the Research Institute of Advanced Technologies.
At NTN Kugellagerfabrik (Deutschland) GmbH in Germany,
employees donate cardboard boxes to a facility for the protectionof hedgehogs so that homes can be built for the animals in winter.

Action at Overseas Sites: USA
Certified for Indiana State
Environmental Stewardship Program
NTN Driveshaft, Inc. (NDI), based in Indiana State, has been certified
for exemplary environmental performance by qualifying as a memberof the Environmental Stewardship Program under the Indiana
Department of Environmental Management (IDEM). To become amember, a company must be ISO 14001 certified, continuously planand implement improvements, and pass an audit by the state authority.
In June 2010, NDI passed thisaudit and subsequently received anaward and banner from the IDEM
Commissioner.
NDI has set a goal of three years ofcontinuous environmental improvement,
NDI receives certification forwhich it will detail in a report to IDEM
the Environmental
and other member companies.
Stewardship Program

Iwata Works
Putting up
birdhouses

Donating cardboard
boxes to make homes
for hedgehogs

A Word From an Employee
Heike SchottManager, Quality Assurance
NTN Kugellagerfabrik (Deutschland) GmbHYou can often see hedgehogs in forests inGermany. Today, however, this animal has been
designated as being under threat in nine of Germany’s 16 states.
I believe that donating used packaging material to hedgehog shelters
is very important for the protection of these animals.

42

Social and Environmental
Responsibility

Works. The goal of the session was to improve the quality of internal

Environment Environmental Management
Environmental Accounting
Improving Cost Effectiveness as Production Volume Rises
In the fiscal year ended March 31, 2005, the NTN Group introduced
environmental accounting as a quantitative tool for evaluating
environmental preservation measures by group companies andother entities.
Environmental preservation costs in the fiscal year ended March
31, 2011 consisted of 1,226 million yen in environment-related
equipment, up approximately 66% from the previous year, and related
costs of 2,461 million yen, up approximately 23%. These increases

were due to the introduction of energy-conserving equipment
such as lighting and compressors, as well as higher costs forpollution prevention, which included maintenance of wastewater
treatment equipment. The economic benefit was also up, byapproximately 70% over the previous year, to 821 million yen.
CO2 emissions were 290,000 tons, up approximately 16%(40,000 tons). However, this is far less than the approximately 39%
increase in production volume. The recycle rate was about the sameas the previous year, thanks to efforts to lessen waste despite ahigher production volume. The amount of paper and styrofoamthat we purchased also dropped to near previous-year levels.

Environmental preservation costs
Classification

At operating site in Japan (Millions of yen/year)

Costs

Work areas
internal costs

Pollution prevention costs

145

Expenses to preserve
the global environment

508

Resource recycling expenses

Equipment investment
Details
Environmental equipment (dust collectors, particulate smoke
removal devices, and wastewater treatment equipment)
Energy-conserving equipment (compressors, lighting,air conditioning, etc.), switch to alternative fuels, etc.

143

0

582

0

2

Costs of management activities

0336
R&D equipment related to environmental preservation

Fiscal year ended
March 31, 2011 results

Previous fiscal year

Total CO2 emissions

290,000 tons

250,000 tons

Reduction of waste

Recycle rate 99.7%

99.9%

Against the fiscal year ended
March 31, 2000 (99.1%)(98.7%)

Reduction in styrofoam purchases

Environmental Communication
In Japan

1,116
151
9
2,461
2,001

Item
Global environment preservation
expenses, effects
Resource recycling expenses,
effects
Total(For reference)
Total from previous fiscal year

Overseas

NTN introduces Its Activities in Local Communities

NTN sites are working closely with local communities in preserving
the environment.
NTN Kongo Corp. had a booth at the Kawachi Nagano
Environmental Forum in November 2010 where it introduced what
NTN is doing to help create a recycling society.
NTN Kamiina Corp. holds regular drills so that it can properly
deal with any emergency that occurs on its premises that may
affect the surrounding environment.

Grand total
3,727
2,762

Financial effect of environmental
preservation activities

Impact on environmental preservation
Indicator

Inspection and management of environmental equipment(dust collectors and wastewater treatment equipment)
Costs of switching to energy-saving equipment,from halon fire extinguishers to CO2 extinguishers, etc.
Cost of recycling and waste reduction measures,
cost of processing regular and industrial waste
Analysis related to green procurement
Labor costs related to the EMS and information disclosure(advertising and NTN reports) and the greening andbeautification of company grounds
R&D costs related to environmental preservation
Greening and beautification outside the company
Cost of soil sampling

122

Upstream / downstream costs

R&D costs
613
Costs of social activities
0
Environmental remediation expenses
0
1,266
Total
(For reference) Total from previous fiscal year
761

AmountDetails

Costs(Millions of yen/year)

Amount58
763

Details
Energy-conserving effects, etc.
of air conditioning, compressors, and lighting
Profit from saleable materials such as metallic
sludge821
484

Cleaning Up Around NTN Sites

In August 2010, all employees of NTN NEI Manufacturing India (NMI)
held a cleanup of the area around the site.
In December 2010, employees of NTN
Manufacturing Thailand (NMT) took partin a volunteer cleanup of a park in the
district of Si Racha, Chonburi Province. The Employees of NMI clean up
around the company site
Japanese staff of NMT live in this district.

A Word From an Employee
Rajeev Sharma

NTN Kamiina Corp.
An emergency training

NTN Kongo Corp. takes partin an environmental forum

43

NTN NEI Manufacturing India
HR Manager

In India, people do not normally pick up litter
they see on the street. But when approximately
30 of our employees embarked on a cleanup of litter on the streetsaround the NTN NEI site, I think everyone realized that this could be
the start of a very important custom.

Environmental Impact of Business Activities

In the fiscal year ended March 31, 2011, our production volume
increased significantly, resulting in raw material input (steel andnon-ferrous material) increasing by 34% over the previous fiscal
year to 386,000 tons. Our use of energy and water also increased
accordingly. The amount of industrial waste that was landfilled
was also up significantly. CO2 emissions, however, were kept
to just 290,000 tons, an approximate 16% increase. We managed
this through higher productivity and large-scale energy-conserving
improvements at plants, and through daily energy-conserving
efforts by all employees.

Reducing the Environmental Impact over a Product’s
Entire Lifecycle
The NTN Group strives to reduce the environmental impact overthe entire lifecycle of our products. To this end, we strive tounderstand the amount of raw materials, energy, and water weuse (the input) and the products, CO2, waste, and wastewater(the output) that are generated. We then do everything we can toreduce our impact on the environment.

At operating site in Japan

Raw materials

EnergyRaw materials
386,000 tons

INPUT

Steel materials: 382,000 tons
Non-ferrous materials: 4,000 tons
Purchased amount of
raw materials (10,000 ton/year)
39.8

2009

28.8

2010

38.6

2011

Fuel
(gasoline, gas)

Electricity
538 GWh

Purchased amount(10,000 kL/year)of fuelElectricity
consumption(crude oil equivalent)
20,700 kL

2.58

2008

(Years ended March 31)

Material
recycling*1

2.12

2009

1.62

2010

2.07

583

523

2011

2008

2009

(Years ended March 31)

Scrap metal
16,149 tons

446

Disposal ofindustrial waste

CO2 emissions
290,000 tons

OUTPUT

35.3

31.1

25.0

29.0

Total landfilledamount

2008

2009

2010

2011

(Years ended March 31)(ton/year)

2008

2009

2010

2011

2008

207

2009

179

2010

225

2011

(Years ended March 31)

Grinding
PolishingAssembly

Use of circulating water
50,000 m3

Wastewater
206

58

237

(10,000 m3/year)

Products

Wastewater
1,750,000 m3

923
217

Water usage

538

Wastewater

Disposal ofindustrial waste
Total landfilled amount204 tons

CO2 emissions (10,000 ton/year)

2010

Heat
Treatment

Thermal recycling*2
Waste oil 4,689 tons

CO2

(GWh/year)(Years ended March 31)

Forging
Turning

Production process

Water
2,250,000 m3

Social and Environmental
Responsibility

2008

34.0

Water

(10,000 m3/year)

163

164

175

2009

2010

2011

204
2011

(Years ended March 31)

2008(Years ended March 31)*1 Material recycling: To recycle for use as a raw material *2 Thermal recycling: To recycle for use as fuel44

Environment Environmental Targets and Results
We are working towards achieving targets of environment covering three areas:
Environmental Preservation, Creation of a Recycling Society, and Maintenanceand Improvement of the Environmental Management System.
Environmental Targets and Results, Medium-Term Targets
NTN Must Reduce CO2 Emissions Overseas
NTN strives to achieve the annual targets for a three-year
environmental target, formulated in the fiscal year ended March
31, 2010, that covers three areas: preservation of the global
environment, creation of a recycling society, and maintenance andimprovement of the environmental management system.
For the fiscal year ended March 31, 2011, the final year of thecurrent plan, key items are reduction of CO2 emissions, participation
in local environmental activities, and promotion of green procurement.
We achieved targets for total CO2 emissions in Japan as well as
CO2 emissions rate*1. Overseas, however, we were unable toachieve our target for CO2 emissions rate.

In the area of reducing waste materials, we exceeded our recycle
rate target in Japan but were below our target for overseas.
For green procurement, revisions to our Green Procurement
Standard necessitated more paperwork, and we failed to achieve
our target for receiving paperwork from our key suppliers.
In order to succeed where we fell short of our targets, in thefiscal year ending March 31, 2012 we are starting a new three-year
medium-term management plan (see page 46 for details). Under thisplan we will focus on reducing total CO2 emissions in Japan andoverseas, prepare for certification of ISO 50001*2, and reduce
our use of paper and water in order to save resources.

*1 CO2 emissions rate = CO2 emissions/added-value production output*2 ISO 50001: An international standard for an energy management system,
which specifies systems and processes for improving energy performance.

Results of environmental management activities in the fiscal year ended March 31, 2011 (Bold text shows key items)
PurposeTargets for the fiscal year ended March 31, 2011

Preservation of the global environment
Creating a recycling society

Domestic

Achieve total CO2 emissions of 290,000 tons/year or less(Target emissions coefficient for power suppliers)
Achieve an 18% (1.46) improvement in CO2 emissions rate overthe fiscal year ended March 31, 1998

Achieved total CO2 emissions of 290,000 tons/year or less(Target emissions coefficient for power suppliers)
Achieved a 18% (1.45) improvement in CO2 emissions rate overthe fiscal year ended March 31, 1998

Overseas

Achieve a 10% improvement in CO2 emissions rate over the
fiscal year ended March 31, 2007

Achieved a 6% improvement in CO2 emissions rate over the
fiscal year ended March 31, 2007

Completely phase out halon fire extinguishers by fiscal year-end

Completely phased out halon fire extinguishers

Reduce the use of substances designated by PRTR Law*by 45% over the fiscal year ended March 31, 2007

Reduced the use of substances designated by PRTR Law
by 42% over the fiscal year ended March 31, 2007

Promote local greening activities
Propose a plan for Kigyo no Mori activities in the Kuwana district

Conducting local greening activities in Iwata, Okayama,
and Nagano. Started Kigyo no Mori activities in the Kuwana district

Work toward achieving zero emissions with a recycle rate of 99.7%

Worked toward achieving zero emissions andachieved a recycle rate of 99.7%

Reduce landfill waste to 10 tons/month or less

Reduced landfill waste to 17 tons/monthAchieve zero emissions with a recycle rate of 98%

Achieved zero emissions and achieved a recycle rate of 94.6%

Reduce paper consumption by 48% over the fiscal year ended
March 31, 1999

Reduced paper consumption by 40% over the fiscal year ended
March 31, 1999

Reduce Styrofoam usage by 98.8% over the fiscal year ended
March 31, 2000

Reduced Styrofoam usage by 99% over the fiscal year ended
March 31, 2000

Reduce CO2 emissions

Reduce air, water, andground pollution

Domestic

Participate in local
environmental activities

Domestic

Domestic
Reduce waste materials
Overseas

Maintaining and improving the environmental management system

Preserve resources

Domestic

Internal systems

Domestic Build a system that will allow all worldwide bases to achieve
ISO 14001 certification
Overseas (Houdatsushimizu Corp., Hakui Corp., Shika Corp., NNMI)

Promote green
procurement

Results for the fiscal year ended March 31, 2011

Activities underway for certification of NNMI in June 2011, andHoudatsushimizu Corp., Hakui Corp., and Shika Corp. in July 2012

Receive green procurement paperwork from key suppliers

Because the revised version was distributed in February, some key
suppliers have not yet submitted green procurement paperwork

Formulate and implement plan to substitute phthalate esters

Audits of environmentally hazardous substances completed at all sites

Domestic Conduct audits for environmentally hazardous substances at all sites

Substitute decided on for phthalate esters

Conducted ongoing incoming inspections

Incoming inspections being carried out

Zero complaints of environmentally hazardous substances

Zero complaints of environmentally hazardous substances

Encourage suppliers andSupport key suppliers in obtaining certification such as ISO 14001,
vendors to implement
environmental management Domestic achieving 95% certification or more
systems

Supported key suppliers in obtaining certification such as ISO 14001,
achieving 95.2% certification

Comply withnew regulations

Understand amount used of substances designated by amended
PRTR Law and set targets for next fiscal term and beyond

Domestic

Understand amount used of substances designated by amended PRTR Law
Conform to the amended Soil Contamination Countermeasures Act* PRTR Law: Pollutant Release and Transfer Register (Japanese law)45

Evaluation

Achieved

Not achieved

Under a New Environmental Target, Focus on Targets
for and Environmental Management of Rates for Waste,
Paper Purchased, and Water Used
April 2011 marked the start of our “Global Advance 2013” medium-term
management plan (lasting until the fiscal year ending March 31, 2014;see page 8-11 for details). In parallel with this plan is our three-year
environmental target, which clarifies our continuing targets in the threeareas of preservation of the global environment, creation of a recycling
society, and maintenance and improvement of the environmental
management system.
Under this medium-term target, we have set targets for the rates inthree new areas (waste generated, weight of paper purchased, andamount of water used) per added-value production output, and we aim
to achieve these targets by the fiscal year ending March 31, 2014.
To boost our environmental management system, we have set

targets of having all worldwide sites that were operational as of
the fiscal year ended March 31, 2011 certified for ISO 14001 by
the fiscal year ending March 31, 2014, and having designatedenergy management factories* in Japan certified for ISO 50001
by the fiscal year ending March 31, 2014. We are also planning
to prepare overseas plants for certification.
One of our top priorities is to reduce total CO2 emissions (bythe fiscal year ending March 31, 2014) at overseas companies,
and we are monitoring progress in this respect and plan to set
target values in the fiscal year ending March 31, 2012.

* Designated energy management factories: Designated under Japan’s Law

Concerning the Rational Use of Energy, there are two types: type 1 and type 2.
Type 1 are those that consume large amounts of energy (the total consumptionof fuel and electricity is 3,000 kL or more per year in crude oil equivalents),
while type 2 are smaller (those that consume at least 1,500 kL but less than
3,000 kL per year in crude oil equivalents).

Company-wide environmental targets for the fiscal year ending March 31, 2012 and the fiscal year ending March 31, 2014
PurposeTargets for the fiscal year ending March 31, 2012

Targets for the fiscal year ending March 31, 2014

Achieve total CO2 emissions of 283,000 tons/year or less(Target emissions coefficient for power suppliers)
Achieve a 20% improvement in CO2 emissions rate over the fiscal year
ended March 31, 1998 (emissions coefficient: 0.381)

Achieve total CO2 emissions of 269,000 tons/year or less(Target emissions coefficient for power suppliers)
Achieve a 25% improvement in CO2 emissions rate over the fiscal year
ended March 31, 1998 (emissions coefficient: 0.381)

Overseas

Achieve total CO2 emissions of 260,000 tons/year or less
Achieve a 5% improvement in CO2 emissions rate over the fiscal year
ended March 31, 2007

Achieve a 10% improvement in CO2 emissions rate over the fiscal year
ended March 31, 2007
Note: The total CO2 emissions target will be decided in the fiscal year
ending March 31, 2012

Reduce CO2 emissions

Reduce air, water, andground pollution

Reduce the use of substances designated by PRTR Law
Achieve a 48% reduction in substances designated under the old law overDomestic the fiscal year ended March 31, 2007
Achieve a 1% reduction in substances designated under the new law overthe fiscal year ended March 31, 2011

Reduce the use of substances designated by PRTR Law
Achieve a 50% reduction in substances designated under the old law overthe fiscal year ended March 31, 2007
Achieve a 3% reduction in substances designated under the new law overthe fiscal year ended March 31, 2011

Participate in local
environmental activities

Propose a plan for greening activities in the Kansai district
Domestic Propose a plan for environmental preservation activities in the Hokuriku district

Conduct ongoing environmental preservation activities such as greening activities

Creating a recycling society

Reduce waste materials

Domestic
Overseas

Reduce waste generation rate by 1% over the fiscal year ended
March 31, 2011

Work toward achieving zero emissions with a recycle rate of 99.8%(continuation)
Reduce waste generation rate by 3% over the fiscal year ended
March 31, 2011

Work toward achieving zero emissions with a recycle rate of 97%

Work toward achieving zero emissions with a recycle rate of 99%

Work toward achieving zero emissions with a recycle rate of 99.8%

Maintaining and improving the environmental management system

Reduce paper consumption by 3% over the fiscal year ended
March 31, 2011

Preserve resources

Reduce paper consumption by 1% over the fiscal year ended
March 31, 2011
Reduce water usage rate by 1% over the fiscal year ended
Domestic March 31, 2011
Reduced Styrofoam usage by 99% over the fiscal year ended March
31, 2000 (maintenance)

ISO 14001 certification

Certification of new sites
Domestic Certification overseas (NNMI)
Overseas Support for certification in Japan(Houdatsushimizu Corp., Hakui Corp., Shika Corp.)

Certification of all worldwide sites operation as of the fiscal year ended
March 31, 2011
Certification of new production sites within three years of startup of operations

ISO 50001 certification

Domestic
Overseas Prepare a system for certification in Japan

Certification for designated energy management factories in Japan
Prepare a system for certification overseas

Strictly abide by regulations,
Confirm management of poisonous materials
in-house standards, andDomestic(conduct inspection once a month)environment-related rules

Promote green
procurement

Continue implementing the items on the left and add new items

Receive green procurement paperwork from key suppliers
Formulate and promote plan for alternatives to phthalate esters
Domestic Conduct audits for environmentally hazardous substances at all sites
Conduct ongoing incoming analysis of environmentally hazardous substances
Zero complaints of environmentally hazardous substances

Continue implementing the items on the left and add new items

Distribute the Green Procurement Standard to overseas suppliers

Establish a green procurement system for overseas suppliers

Overseas

Encourage suppliers andDomestic Certify the environmental management systems of key suppliers
vendors to implement
environmental management Overseas 95% or more certified
systems
Comply withnew regulations

Reduce water usage rate by 5% over the fiscal year ended
March 31, 2011
Reduced Styrofoam usage by 99% over the fiscal year ended March
31, 2000 (continuation)

Comply with the revised Act on the Evaluation of Chemical Substances andDomestic
Regulation of Their Manufacture, etc.
Overseas
Comply with REACH, CLP, and China RoHS

Certify the environmental management systems of key suppliers
95% or more certified (continuation)
Respond appropriately whenever there are revisions

46

Social and Environmental
Responsibility

Preservation of the global environment

Domestic

Environment Measures Against Global Warming
NTN is working in a number of ways to achieve its targets forCO2 emissions reductions in the fiscal year ending March 31, 2012.
Energy-Conserving Efforts in Plants

To Achieve CO2 Emission Reduction Targets

Annual CO2 Reductions of 500 Tons at NTN Mie Corp.

In Japan

NTN Mie Corp. is working in two areas: use only as much energy
as is needed when it’s needed; and reduce CO2 emissions.

10% Reduction in Total Emissions Over the
Fiscal Year Ended March 31, 2008

In February 2008, we set a target of an upper limit of 317,000 tons

In the fiscal year ended March 31, 2011, we revised how we useof CO2 emissions (10% less than the fiscal year ended March 31, 2008)

resources like fuel, heat, and electricity, and we made it easy to seefrom all sites in Japan. We went on to set an even stricter target,

how much energy is being used by equipment with high CO2 emissions.

and in the fiscal year ended March 31, 2011, our CO2 emissions wereWe also hired outside consultants to diagnose the company, and

290,000 tons (18% less than the fiscal year ended March 31, 2008).

subsequently converted medium and large motors and pumps to

We have set further targets for continuous CO 2 emissions

inverter types, and improved the combustion efficiency of the heat

reductions: 283,000 tons in the fiscal year ending March 31, 2012

treatment furnace. The result was an approximate 500-ton annual

and 269,000 tons in the fiscal year ending March 31, 2014 (±0%decrease in CO2 emissions.

compared to the fiscal year ended March 31, 1991).

For the fiscal year ended March 31, 2012, we plan to achieve
CO2 reductions of approximately 600 tons by introducing inverter-type

Overseas

compressors and improving the pneumatic system.

10% Reduction in CO2 Emission Rate Overthe Fiscal Year Ended March 31, 2007

We set a target of a 10% reduction in the CO2 emission rate forall overseas sites in the fiscal year ended March 31, 2011; the actual
reduction was 6%, short of our target.
For the fiscal year ending March 31, 2012, we expect an increasein production volume and so have set a reduction target of 5% overthe fiscal year ended March 31, 2007. For the fiscal year ending March
Cooling water pump converted
to inverter type70 lights converted tohigh-efficiency lamps

31, 2014, however, we have put our reduction target back up to 10%.

Total CO2 emissions (sites in Japan)

A Word From an Employee
Yuichiro Sugihara
Energy Manager
Production Technology Group Mono-zukuri Center
NTN Mie Corp.

Our company is still barely seven years old,plant equipment is new, and energy efficiency ishigh. Despite this, we are not satisfied and all employees are searchingfor every way possible to further reduce CO2 emissions.

Action at Overseas Sites: France
NTN-SNR in Major Equipment Overhaul
At NTN-SNR Roulements (NTN-SNR), equipment like compressors
and dryers for the air production processes used to consume about
15% of total electricity, or 6 million kWh a year. To remedy thisproblem, when the company did a plant audit in the fiscal year ended
March 31, 2009, it undertook a major project to overhaul equipment.
Between June and December 2010, it installed three new screw
compressors. In August 2011, it installed a fourth screw compressor,
this one a variable-speed type, as well as two dryers that run on gas
with minimal greenhouse effect. Further, in August 2012, NTN-SNR
plans to connect a heat exchanger to the heating system so thatit can heat the plant without
having to use the gas boiler.
These efforts are expected toresult in electricity consumption
during air production that is lessthan one-third of the levels forfiscal year ended March 31, 2010.
Screw compressor at NTN-SNR

47(10,000 tons/year)

50.0
40.0
30.0
20.0
10.0
0

33.9

2006

34.0

2007

35.3

2008

31.1

2009

25.0

2010

29.0

2011

28.3

26.9

TargetTarget2012

2014(Years ended or ending March 31)

CO2 emission rate (sites in Japan)
Emission rate (t-CO2/million yen)

2.00 1.76 1.70 1.58 1.64 1.54 1.55 1.50 1.55 1.50 1.46 1.56 1.54
1.45 1.42
1.50
1.00
0.50
0

1.34

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2014

(Target) (Target)(Years ended or ending March 31)

NTN Takes Part in Lights Off Campaign toReduce CO2 Emissions
NTN has been participating in the Ministry of the Environment’s
CO2 Reduction/Light-Down Campaign since the fiscal year ended
March 31, 2009 to contribute to reducing CO2 emissions and toraise employee awareness of energy conservation.
In the fiscal year ended March 31, 2011, on the summer solstice(June 21) and Tanabata (July 7), the NTN Head Office, plants,
branches, sales offices, distribution centers, and affiliates turned
off their neon signs and office lights from 8 p.m. until the next morning.
The electricity saved by this effort is the equivalent of approximately
900 kg of CO2.

Striving to Utilize Natural Energy
Increasing Use of Wind and Solar Power

And with the goal of further reducing environmental impact andcost and improving packaging quality, we are introducing eco-bands,
developed in-house by NTN and which prevent polyurethane

As part of efforts to lower its CO 2 emissions, NTN actively

cases stacked on palettes from being crushed during delivery.

utilizes generated power from wind, solar and other renewable

We have completed load testing, and we are working with plants

forms of energy.

and customers to decide when to carry out actual delivery tests

At NTN Houdatsushimizu Corp., where our largest wind powerwith the aim of introducing these eco-bands as early as possible.

facilities are located, the wind power generator installed there

Conventional bands used to prevent goods from being crushedgenerates enough power to run air conditioning and lighting. At

during delivery are made of polypropylene and must be thrown away

the Research Institute of Advanced Technologies, the electricity

after just one use. These newly developed eco-bands, however, arefrom the solar power generator and wind turbine installed during

made of polyester, which is resistant toconstruction of new laboratories

friction, and they are attached using Velcro,

is used to charge the company

so they can be used over and over. And

electric vehicles.

they contribute to less waste from customers
and thus lower distribution costs.

In the fiscal year ending March
31, 2012, we plan to install wind

CO2 emissions from truck transport

power generators at Iwata Worksand NTN Fukuroi, as well as a solar
power generator at NTN Mie Corp.

Load testing of eco-bands

Target(kg/km)Wind power generator(NTN Houdatsushimizu Corporation)

Striving to Utilize Green Power
Green Power for Printing and Binding of the NTN Report
In addition to the development, construction, and operation of wind
power facilities, Japan Wind Development Co., Ltd., an NTN
serve as guarantees of environmental added value of reductions

0.583

0.583

0.554 0.554

0.568

0.554

0.561

0.550

0.539

0.548

0.542

0.536 0.531

0.500
0

1999

Results

0.535
0.521
0.524

0.513

0.507

0.506

0.495
2004 2005 2006 2007 2008 2009 2010 2011 2012

Using a Closer Port for Export(Target)(Years ended or ending March 31)

in CO2 enabled by renewable energy, and they can be traded (sold)To reduce CO2 emissions resulting from truck deliveries fromfor this value.

the Kuwana Export Distribution Center, in the fiscal year ended

We purchased renewable energy certificates for the green

March 31, 2009 we changed the port where our products leave

power required to cover the electricity for the printing and binding

Japan from Nagoya Port (Aichi Prefecture) to Yokkaichi Port (Mieof the NTN Report 2009. Green power is also being used forPrefecture). This shortened the delivery distance from 20 km to

the NTN Report 2010.

12 km. This effort was certified under the Yokkaichi Port Green
Logistics Promotion Assistance Program, which subsidizes

Striving to Reduce Environmental Impact
from Distribution
Reducing Environmental Impact by Modal Shift andImproving Packaging

companies for their rate of CO2 emissions reductions.
For NTN’s product shipments to other parts of Asia, although
there were the equivalent of 273 more 20-foot containers shipped(total of 740 containers) in the fiscal year ended March 31, 2011
compared to the previous year, CO2 emissions dropped by 9.73

NTN is working to reduce CO2 emissions and costs by switching

tons. In the fiscal year ending March 31, 2012, we will graduallyfrom trucks to rail shipment.

switch to using Yokkaichi Port for export shipments to Europe as well.

In October 2011, we plan to shift deliveries between Okayama
Works and the Kanto Distribution Center (Kanagawa Prefecture)

Introducing Forklifts with Emission Credits

from truck to rail. We estimate this will reduce annual CO2 emissions

NTN Mie Corp. is switching to using forklifts with high fuel efficiency,

by 63.29 tons and annual crude oil use by 68.1 kiloliters.

as well as forklifts for which the forklift leasing company is offering

At the Kuwana Export Distribution Center, we are loading

CO2 emission credits. Under this service, the forklift leasing company

the containers carried by trucks bound for Nagoya Port (Aichi

takes the CO2 emission credits it holds and gives 1 ton of themPrefecture) with three palettes instead of two to improve load

annually with each forklift leased.

efficiency and thus reduce the number of containers being

Although companies must do everything possible to reducetransported. We estimate this will reduce annual CO2 emissions

CO2 emissions on their own, it is also important to make use of

by 2.75 tons and annual crude oil use by 1.04 kiloliters.

services like this.

48

Social and Environmental
Responsibility

customer, sells renewable energy certificates. These certificates0.600

Environment Reduce Waste, Save Resources
To contribute to the realization of a recycling society,we develop recycling devices and reduce waste.
Grinding Swarf Briquetting Machine

briquetting machines when it expanded its plant. This allows
grinding fluid to be recycled and it is estimated that this will save

Development of Ultra-Compact Machine

approximately 10 million yen in the cost of new grinding fluid.

NTN developed a grinding swarf briquetting machine that requires
just 40% of the installation space of conventional machines.

Looking Into Company-Wide Electronic Manifest

This machine makes it easy to take metal debris, which remains

When companies dispose of industrial waste, they must get proof

after grinding fluid is separated from the swarf generated duringfrom the waste treatment company that the waste has been properly

the grinding process, and make it into briquettes that can be useddisposed of (a control manifest for industrial waste), and thisagain. NTN previously made machines with treatment capacities of

document must be stored for five years. However, paper manifests

20 or 30 tons a month, but in response to the need to meet smaller

are cumbersome and can contain errors or get lost; in fact, NTN

scale needs, we developed this machine, which has a capacity

has been cited for such problems during internal audits.

of five tons a month. This machine is also capable of automatically

To solve this problem, NTN is considering using an electronic

adjusting the force and speed of the exerted pressure, depending

manifest system. Some sites are already doing so, and we areon the amount of water in the grinding swarf.

examining the benefits as we look to adopt this system company-wide.
Plant

Steel mill

Grinding swarf

All NTN Sites Observe Industrial Waste Treatment Companies
In the fiscal year ended March 31, 2011, all NTN Group sites
observed operations at their industrial waste contractors during

Reuse

June, which is environmental month at NTN. At the Nagano Works,a waste treatment company checklist created by the National

ReduceGrinding
fluid

Federation of Industrial Waste Management Associations was

Recycleused when visiting the waste treatment company to check
operations, compliance with subcontractor standards, verify theMetaldebris Briquettes

Grinding swarf
briquetting machinestate of the site and processes, and overall ensure there are no
problems in waste processing.
Under Japan’s Revised Waste

A Word From an Employee
Akira Nishiyama
Chief
Equipment Development Dept.
Production Engineering R&D Center
NTN Corporation

In developing the grinding swarf briquetting
machine, we focused on making something that is environmentallyand user friendly by totally revamping the design and construction
and giving it a simple interface. Our efforts allowed us to make amachine that customers are truly satisfied with.

Management Law, which went into
effect in April 2011, companies must
confirm that their waste is being properly
disposed of. Accordingly, NTN will
step up efforts and regularly observe
the state of its waste disposal.

Recycle rate and Landfill waste

Improve the Resource Recycling Rate at Worldwide
Production Sites

Landfill waste( Tons/year)

5,000
4,000

Zero Emissions

Processing wood debris

96.0

1,000
0

96.3

98.7

98.5

99.6

1,722

the recycling ratio.
In the fiscal year ended March 31, 2011, NTN Mie Corp. took

99.7

100
80
60

1,969
711

923

40

204
58
2004 2005 2006 2007 2008 2009 2010 2011
217

20
0

(Years ended March 31)

NTN defines zero emissions as landfill waste constituting 0.5% orless of total waste generated and we work towards this by raising

99.9

2,843

3,000
2,000

94.4

Recycle rate (%)

Management of Pollutants
Completed Switch to Halon-Free Fire Extinguishers

waste it had previously been sending to landfills, such as plastic

Halon fire extinguishers used at electric-related facilities containwaste and compound waste, to a contractor that carries out

CFCs that deplete the Earth’s ozone layer.

non-toxic incineration to have the waste pulverized for recycling.

In the fiscal year ended March 31, 1999, NTN formulated a planThis helped raise the recycling rate from 96.7% to 99.9%. NTN

to totally phase out halon fire extinguishers and we worked towards

Mie Corp. achieved a 100% recycling rate in January 2011,

doing so by the fiscal year ended March 31, 2011. We have

which it has maintained since.

achieved this target, with all halon fire extinguishers removed

Overseas, Shanghai NTN Corp. installed four grinding swarf

49

as of the fiscal year ended March 31, 2011.

Environment Managing Environmentally Hazardous Substances
We abide by laws and regulations in properly managing restricted
substances in products and processes throughout the entire supply chain.
Compliance with the EU REACH and Other Regulations

Green Procurement

All-Encompassing Survey of Substances of Very High Concern
The EU REACH*1 regulation designates substances that must be

Revision of the Green Procurement Standard with the Goal of
Thorough Control of Environmentally Hazardous Substances

controlled as substances of very high concern (SVHC), of which there areUnder NTN’s Green Procurement Standard, we work with the suppliers

currently 57. To comply with REACH, NTN conducts ongoing surveys of

who provide us with raw materials, parts, and indirect materials tothe substances contained in the raw materials, parts, and indirect

preserve the environment and improve environmental performance.

materials that it procures. In the fiscal year ended March 31, 2011, we

In the fiscal year ended March 31, 2011, we revised thisconducted an all-encompassing survey at major suppliers in Japan

document with the goal of achieving even more thorough control

and overseas. And to comply with CLP*2, which obligates labeling ofof environmentally hazardous substances. We also created the Green

chemicals, NTN notified the regulatory authorities regarding the fats andProcurement Operation Manual and simultaneously revised ouroils it uses, and it provided the necessary information to customers as well.

technical standards so as to graphically display the prohibition of

Although some of our products use rubber parts that containregulated substances, and distributed and explained this to suppliers.

phthalate ester, which is a SVHC, we plan to completely phase

In June 2010, the Kuwana Works was honored by Fuji Xerox

this out by March 2013.

Co., Ltd. for years of providing green procurement products with

*1 REACH: Registration, Evaluation, Authorization and Restriction of Chemicals*2 CLP: Classification, Labelling and Packaging

designation as a permanent environmental partner.

Reducing Substances Designated by the PRTR Law

Cooperation in Customer Survey ofEnvironmentally Hazardous Substances

Target of 48% Reduction Over the Fiscal Year Ended March 31, 2007

Canon Inc. is aiming for certification under Germany’s Blue AngelNTN is reducing the amount of substances designated under theenvironmental labeling system. To this end, the company forbid the

PRTR Law (Pollutant Release and Transfer Register) that it handles.

use of specified halon-based compounds in plastic molded products.

Although our target for the fiscal year ended March 31, 2011 was

NTN underwent a survey in March 2010 and there were no issues

a 45% reduction in these substances over the fiscal year ended

found with NTN’s raw materials and parts.
Canon Inc. has asked NTN to cooperate inour sites could not totally eliminate the 2-amino ethanol contained

a survey of both parts and raw material every

in grinding fluid. In the fiscal year ended March 31, 2012, we will

two years from now on. NTN will continue toeliminate all use of this substance and have set a target of a 48%

work with Canon in thorough efforts to control

reduction over the fiscal year ended March 31, 2007.

environmentally hazardous substances.

The PRTR Law was revised in November 2008 and as of theEnvironmentally hazardous
substance audit

fiscal year ended March 31, 2011 there are more designatedTraining for Hazardous Substances Auditors

substances. One of these is N,N-Dicyclohexylamine, which we are

NTN Group companies conduct hazardous substance audits atstriving to reduce the use of.

suppliers (particularly environmentally hazardous substances).
These are conducted by auditors who have completed training

Usage of substances designated by the PRTR Law( Tons/year)

120
80
40
0

114.3

114.2

to become hazardous substance auditors.
In the fiscal year ended March 31, 2011, hazardous substance

69.1

51.7

66.9

2009

2010

2011

auditor training was held for internal auditors at the Head Office andthree sites. Company-wide there are currently about 100 employees

2007

2008

(Years ended March 31)

Compliance with Revised Chemical Substances Law
NTN Surveys Relevant Substances and Completes Notification
In May 2009, there were revisions to Japan’s Law Concerning
the Examination and Regulation of Manufacture, etc. of Chemical
Substances. As of April 1, 2011, companies are obligated to notify
Japan’s Ministry of Economy, Trade and Industry if they are importingor manufacturing at least 1 ton/year of chemicals.
To comply with the revised law, NTN surveyed the amount ofchemical substances contained in the pharmaceuticals (lubricantssuch as grease, resin, etc.) that it imports. In June 2011, wecompleted the proper notification process.

certified as hazardous substance auditors and we will continue
training more people to become auditors.

A Word from a Customer
NTN Certified as an Environmental Partner
Requiring No Further Surveys

Kiyoshi Iwasaki
Environmental & Product Safety Division,
Quality Assurance Group Fuji Xerox Co., Ltd.
NTN is excellent at in-house clarification of how and which environmentallyhazardous substances it must control. We conducted two surveys of NTN’s
raw materials and parts and found no problems. Because of this and thecompany’s maintenance and improvement of its management system,
we have certified NTN as an environmental partner requiring no further
surveys. I hope that NTN will continue to set an example for othercompanies with its environmentally hazardous substance control.

50

Social and Environmental
Responsibility

March 31, 2007, we were not able to achieve it because some ofCorporate Governance

Governance System

We continue to work on prompt decision-making and businessexecution and strong management oversight functions.
Improving Our Corporate Governance Structure

Corporate Governance

NTN employs a corporate auditor-based governance system in

Basic Approach to Corporate Governancewhich three of the four corporate auditors are from outside theWe have a complete system for corporate governance, which wecompany. This strengthens the management oversight functions.

consider a crucial part of company management.

The Board of Directors oversees decisions on key issues andWe also strive to communicate with shareholders, investors,

performance of duties, and in April 2011 we strengthened theseand other stakeholders by providing information in a prompt,

functions by increasing from one to two the number of outsideaccurate manner. This ensures more effective, transparent, andmembers of the Board. We also employ the Executive Officer

solid management.

System to ensure swift decision-making and business execution.
The Internal Audit Department is in charge of internal audits

Corporate Governance Structure

and the internal control system. In April 2011, it became theInternal Audit and Test Department in order to allow us to better

Stockholder Meeting
Assigns/
Removes

Corporate
Auditors

Assigns/
Removes

AuditsBoard ofDirectors

manage and lead audit and test functions.
Assigns/
RemovesAccounting
Auditors(Audit firm)

Internal Control
Internal Control System Placement and Operation
NTN Corporation has put in place and operates an internal control

Business Strategy
Committee

system that covers financial reporting in accordance with the basic

Executive
Committee

Standards and Practice Standards for Management Assessments

framework for internal control set forth in “On the Setting of theand Audits Concerning Internal Control Over Financial Reporting(Council Opinions)” published by the Business Accounting Council
in February 2007.

(Other positions omitted)

An assessment of internal control over financial reporting was
conducted with March 31, 2011, the end of the fiscal year underreview, as the reference date and conformed to the assessment
standards for internal control generally accepted in Japan.

Board of Directors
The role of the Board of Directors is to make decisions relating
to fundamental business policies, statutory matters, andimportant management issues, and to supervise theperformance of duties by its members. The board holds regularmeetings at least once per month, with extraordinary meetings
also convened at any time when necessary.

Business Strategy Committee
The Business Strategy Committee discusses fundamental
business policies and important management strategies, withmeetings held twice per month.

Executive Committee
NTN introduced the Executive Officer System in the fiscal year
ended March 31, 2005 to enable swift decision-making andbusiness execution. Reviews of monthly performance areconducted by the Executive Committee, comprising Directors
and Executive Officers.

Corporate Auditors
NTN has four corporate auditors, two of who are standing

51

auditors (with three of the four being outside auditors). The
auditors are responsible for auditing the performance of duties
by members of the board. Auditors attend board meetingsand express their opinions as part of their efforts to maintainand improve the transparency and fairness of the Company’s
management supervision system. The system is structured toenable standing auditors to participate and express theiropinions during meetings of the Business Strategy andExecutive committees. The corporate auditors also strive toincrease the efficiency of the overall auditing process, meeting
regularly to coordinate their own corporate audits, independent
public auditing firm audits, and internal audits. There are no
special business relationships or interests between the outside
auditors and NTN.

Internal Audit and Test Department
The Internal Audit Department is responsible for internal audits,and has been established as an independent auditing organization
to audit business execution throughout the Company.

Officers (As of June 24, 2011)

Directors

Yasunobu Suzuki
1. Chairman and CEO

Masashi Honma

3

6. Managing Director

Shigeyoshi Takagi
2. President

5

7

9 10

13

11

12

8

6

4

Fukumatsu Kometani
7. Managing Director

Osamu Wakisaka
3. Deputy President

Hitoshi Takai
8. Director

Yoshio Kato
9. Director

Yoshikazu Fukumura
5. Managing Director

Yoshinobu Yasuda

1

Corporate GovernanceKenji Okada
4. Executive Director

2

11. Director

Hironori Inoue
10. Director

Akira Wada

Hisaji Kawabata
12. Director (external)

13. Director (external)

Statutory Auditors
Standing Statutory Auditors

Statutory Auditors(External)(External)

Akio Imanishi

Mizuho Hikida

Tadao Kagono(External)

Norifumi Ishii

Executive Officers
Senior Executive Officers

Shoji Kido
Didier SEPULCHRE DE CONDE
Yukiyoshi Hagimoto
Tetsuya Kondo

Executive Officers

Toshiharu Kato
Takayuki Matsuo
Toru Tomiyama
Katsuhiko Iwamoto
Yoshihiro Inami
Takashi Hosoya

Tatsunobu Yasui
Hiroshi Ohkubo
Keiji Ohashi
Yoshinobu Akamatsu
Tomoyuki Miyanomae
Eiichi Ukai

Takehiko Umemoto
Natsuhiko Mori
Hidefumi Tsuji
Toshinori Shiratori
Tetsuya Sogo

52

Corporate Governance

CSR Promotion Structure

So that we can maximize corporate value for all our stakeholders, we have asystem for fulfilling corporate social responsibility based on our CSR Policy.
CSR Promotion Structure

All employees are given the CSR Guidebook and the Pocket

Corporate Philosophy System and Approach
NTN’s corporate philosophy is “We shall contribute to internationalsociety through creating new technologies and developing new

CSR Card to constantly remind them that CSR is a part of theireveryday duties.

Corporate Philosophy Systemproducts.” To realize this philosophy, in June 2006 we formulated
Corporate
Philosophy

the CSR Policy, one of NTN’s Basic Policies. All officers andemployees are thoroughly educated in both of these.

Basic corporate values.
Show intended direction of
corporate activities.

NTN strives to conduct CSR as part of its corporate activities;

Corporate
Management
Policies

NTN’s Basic Policies

not just to improve our economic position, but to also improve ourenvironmental and social standing as well. Besides accountability
to our stakeholders, we work to meet their expectations andEmployee Code of
Conduct

gain their trust. By growing our company while at the same time
contributing to the advancement of society as a whole, we believe
we can maximize corporate value for all our stakeholders. Under

Business Code of
Conduct

Guideline to encourage aggressive actions

Guideline for compliance actions

our CSR Policy, we clarify our corporate code of conduct to eachgroup of stakeholders and our responsibilities to society as a whole.

CSR Promotion Structure

Also in accordance with our CSR Policy, we have an Employee
Code of Conduct, which guides all employees’ CSR activities,
and a Business Code of Conduct, which details the social rulesthat all employees and officers must abide by.

Chief Management
Officer

Department in charge
and the Committee Office

CSR Committee

CSR Management (CSR Dept.)

Managing departments

Corporate Planning
Department

Legal Department

General Affairs
Department

Personnel
Department

Environmental
Management Department

Quality Management
Department

Intellectual Property
Planning Department

Procurement
Department

Management andcontrol Departments

Implementing Departments (plants,
Engineering Departments, Research & Development, CSR Managers
Persons in charge of CSR
Sales, Head Office) and Subsidiaries

CSR Guidebook

Pocket CSR Card

Other Subcommittees

CSR Policy

Employee Code of Conduct

Business Code of Conduct

1 Legal compliance/Policy for activities: We shall comply

1 We respect social ethics and act as good members of society.

1 Compliance with laws and norms
2 Pursuit of quality and safety
3 Compliance with the Anti-Trust Law
4 Fair trade with suppliers
5 Honoring agreements
6 Refusal to engage in improper conduct with business partners
7 Proper labeling and specification
8 Respect for intellectual property rights
9 Proper control of confidential information
10 Ensuring security by strengthening export controls
11 Compliance with industrial laws
12 Compliance with corporate accounting principles
13 Compliance with international rules
14 Promotion of environmental preservation
15 Positive contribution to society
16 Compliance with labor-related laws and company work rules
17 Realization of a safe and positive work environment
18 Respect for human rights
19 Prohibition of sexual harassment
20 Proper control of information about individuals
21 Strict distinction between public and private matters
22 Confronting harmful social forces
23 Proper utilization of our information system
24 Prohibition of insider trading
25 Self-restraint regarding entertainment and gifts
26 Lawful donations/political donations

with both the letter and the spirit of laws and regulations, andcarry out our business activities in an open and honest manner.

2 Customers: We shall strive to develop new technologies andnew products, as well as to provide safe and reliable products.

3 Business partners: We shall engage in fair and freecompetition, and at the same time establish excellent
partnerships with our business partners.

4 Stockholders/Disclosure of information: We shall work

to develop this corporation and increase stockholder return,while at the same time communicating broadly with society
and actively disclosing information.

5 Employees: We shall value the individuality and diversity of

our employees, work to create a safe and pleasant work place,and achieve comfort and prosperity.

6 The environment: With ample consideration to preserving

the global environment and protecting the ecosystem, we shallwork toward the creation of a sustainable, progressing society.

7 Society: We shall make every effort to interact meaningfully

with society on a local level, and to engage in activities that
contribute to society.

8 International activities: We shall, as a matter of course,obey all international rules as well as the laws of each country
and each region that we operate in; we shall also respect local
cultures and practices and contribute to local development.

53

Compliance Subcommittee

2 We have noble ambitions and always make efforts tobrainstorm and achieve the set target.

3 We accept changes, have broad vision and act voluntarily.
4 We deepen mutual understanding and enhance the vitality of

our work site.

5 Management and supervisors in particular, as faces of thecorporation, improve their qualifications, make efforts todevelop individuals, always take care of safety and show
leadership.

Corporate GovernanceCompliance, Risk Management

We meet stakeholder expectations through compliance andrisk management activities.
Complianceand outside the company) allow officers and employees to speak
directly with someone—without having to go through organizational

Compliance Management Systemchannels—to report on, inquire about, and receive consultation

NTN defines compliance as not only abiding by laws and regulations,on acts that are in violation of, or may be in violation of, laws, thebut also as having a system for thorough compliance with all social

Business Code of Conduct, and internal regulations. Our Groupnorms and rules.

company in the U.S. also has a similar Help Line system.

NTN has the Compliance Subcommittee as an advisory body

NTN’ s Help Line system can also be used by our suppliers.

under the CSR Committee. This subcommittee is charged withcomprehensively promoting and managing compliance initiatives
for the entire Group.

Risk Management
Risk Management System, Education and Drills

Compliance Management System

NTN has formulated a Risk Management Policy and Risk

Compliance promotion

Manages the Help LineManagement Rules so that it can prevent major risks such as

Chief Management Officer

Chief Management Officer

information leaks and quickly deal with such risks should they occur.

(Director in chargeof the Legal Department)

Risk is managed in an integrated manner with coordination by the(Director in charge of CSR)

Risk Management Committee.
Office(CSR Management
Department)

CSR Committee

Legal
Department

Legal
Departmentthat are predicted for the Tokai and Tonankai regions of Japansometime in the future. (See page 40 for details.)

Personnel
Department

Internal Help
Desk

External Help
Desk

Risk Management System
Board of Directors

CSR managers
Persons in charge of CSR
Corporate
Philosophy

Japan Earthquake of March 2011, we are reviewing our disasterprevention measures so that we are ready for major earthquakes

Compliance Subcommittee

CSR
Management
Department

Although NTN suffered only slight damage from the Great East

Officers and employees of NTN Group companies

CSR Policy

Employee Codeof Conduct

Chief Management Officer(Director in charge of risk management)

Risk Management Committee

Business Codeof Conduct

Chairman: Chief Management Officer
Vice-Chairmen: Risk Management Manager
Emergency Management Manager
Members: Head of the Promotion Division

NTN conducts compliance education for all levels of employees
and management. In the fiscal year ended March 31, 2011, all new
employees and mid-career recruits took group training in basic CSR

Risk Management
Department(CSR, Public Relations,
IR Department)

Emergency Management
Department(Human Resources,
General Affairs Department)

Corporate GovernanceCompliance Education and Awareness Surveys
Emergency
Management
Centerknowledge and the NTN Group CSR, and employees being
promoted to managerial positions took self-learning with company
Promoting Department

textbooks and online CSR comprehension tests. And based on the
results of compliance awareness surveys for employees, education
was held covering power harassment, sexual harassment, andmanagement of working hours.

Risk Management Approach
Preventative
measures

The NTN intranet compliancedatabase has case studies in

Risk management planning

non-compliance and the latest

Person in charge of managing
emergency information

An incident occurs

information on compliance issues

Creation and implementation of
measures to address risk

so as to raise employee awarenessin this area.

Emergency
measures

Determining the level

Compliance training

Help Line Management
NTN has established Help Lines (internal reporting system) as
part of its compliance framework. These Help Lines (both inside

Evaluation of measures toaddress risk
Evaluation of effectivenessof risk management

Establishment ofcentral task force
and response

Response by
department
in charge

Measures toprevent reoccurence

54Third-Party Opinions

NTN Report 2011 Third-Party Opinions
Katsuhiko Kokubu
High Hopes for New Medium-Term Management Plan
The NTN Report begins with NTN President Shigeyoshi Takagi giving details of
the management situation, which centers on the new medium-term management
plan starting in April 2011. He stresses the creation of a system for “on local sitewith local materials by local personnel.” If companies today plan to grow, it is crucial
that they globalize, and this is a key theme of this year’s NTN Report. Following is
a comment on what companies must to do truly globalize.

CSR of a Global Company
It’s no secret that companies operating on a global level must also conduct CSR
activities on a global standard. To this end, one should be guided by ISO 26000,
an international standard for social responsibility released in 2010. NTN currently
conducts a wide range of CSR activities in earnest and is to be commended forthese efforts. However, the company should re-examine its framework for these
activities, and not just in terms of CSR but in terms of company management as well.

Strengthen Dialog with Stakeholders
This year’s report shows that NTN has incorporated many opinions from both
inside and outside the company in its stepped-up efforts to strengthen dialog withstakeholders. From an environmental aspect, the company keeps in close contact
with local communities, and overseas bases conduct cleanups around theirpremises. The earnest involvement of stakeholders is a key point of ISO 26000,
and I hope NTN continues this on a systematic basis. Since NTN is a B to B
company, the company must work even harder to gain the understanding andsupport of society.

Environmental Management
NTN conducts environmental activities in earnest and has set new environmental
targets under its medium-term management targets. In environmental performance,
the company has achieved noteworthy results in efforts including improved
efficiency through environmental accounting. Overseas, however, there is still room
for improvement in achieving targets. Environmental management creates difficult
challenges for any company with overseas bases, but a company must determine
the situation at such bases and establish standard targets that can be achieved
anywhere in the world.

Progress with an Integrated Report
In the field of CSR, more and more companies are publishing integrated reports; inother words, reports that combine CSR and financial aspects. This year’s
NTN Report is such a document. However, to be a truly integrated report, apublication must have performance data not only on the financial side but on the
CSR side as well in the form of key performance indicators (KPI). NTN currently
has no quantitative targets set for its CSR activities other than environmental ones.
If the company remedies this by setting quantitative targets, it can proceed to thenext stage in which it shows KPIs.

Note: Opinions from third parties are based on information available as of the end of March 2011.

55

Katsuhiko Kokubu
Biographical Information
Katsuhiko Kokubu is a professor at
the Graduate School of Business
Administration, Kobe University. He
specializes in environmental
management, environmental
accounting, and CSR management
and serves as chairman of Material
Flow Cost Accounting (MFCA)
Forum Japan, chairman of ISO/TC
207 Working Group 8, and a directorof the Institute for Environmental
Management Accounting, and amember of the executive boardof the Society for Environmental
Economics and Policy Studies, theSustainable Management Forum ofJapan, the Japan Corporate Social
Accounting and Reporting
Association, and the Japan Cost
Accounting Association. His
published books include “Material
Flow Cost Accounting” (Nikkei
Publishing Inc.) and “Environmental
Management and Accounting”(Yuhikaku Publishing Co., Ltd.).

Financial Review
Net sales

Sales by business segment

Net sales by region(Billions of Yen)

(Billions of Yen)

(Billions of Yen)

Bearing
Constant-Velocity Joints
Precision Equipment and Other Product
Automotive
Industrial Machinery
Aftermarket & Distributor

Americas

6,000

6,000

5,000

5,000

5,000

4,000

4,000

4,000

3,000

3,000

3,000

2,000

2,000

2,000

1,000

1,000

1,000

0

2006 2007 2008 2009 2010 20110

2006 2007 2008 2009 2010 2011

(Years ended March 31)

Scope of Consolidation
The scope of consolidation as of March 31, 2011 consisted of NTN
Corporation and 53 consolidated subsidiaries (13 domestic and 40
overseas subsidiaries). A total of 10 affiliates (all overseas affiliates)
were accounted for by the equity method. The following changes tothe scope of consolidation and application of the equity method
were made during the fiscal year under review.
Consolidation(5 companies joining NTN Group)
NTN do Brasil Produção de Semi-Eixos Ltda.
NTN Noto Corporation
NTA PRECISION AXLE CORP.
PT. NTN BEARING INDONESIANTN-LYC (Luoyang) Bearing Corporation

Summary of the Fiscal Year Ended March 31, 2011

Net sales: ¥530.1 billion, a year-on-year increase of ¥77.3
billion (17.1%)
Operating income: ¥24.6 billion (operating margin of 4.6%)
Interest-bearing debt: ¥223.3 billion, a decrease of ¥8.4
billion from March 31, 2010
Capital expenditures: ¥29.7 billion, a year-on-year increase of¥8.2 billion (38.1%)
Dividend: Full-year dividend of ¥10 per share(interim dividend of ¥5 per share and year-end dividend of ¥5
per share)

6,000

0

2006 2007 2008 2009 2010 2011

(Years ended March 31)(Years ended March 31)

Net Sales and Earnings
Net sales and operating income both increased. The earthquake
had only a minor effect and we are growing according to plans.
Sales Performance
Consolidated net sales for the fiscal year ended March 31, 2011
amounted to ¥530,056 million, an increase of ¥77,310 million (17.1%)
from the previous fiscal year. Overseas sales totaled ¥343,461 million,
an increase of ¥47,079 million (15.9%) year on year. Overseas sales
accounted for 64.8% of net sales overall (Europe 25.1%; theAmericas 22.3%; and Asia and others 17.5%), a decrease of 0.7
percentage points from the previous fiscal year.
Net Sales and Earning by Business Sector
In the automotive market, overall sales increased for products likeconstant-velocity joints, axle bearings, and needle roller bearings
in Japan, Europe, the Americas, and Asia and others. As a result,net sales were ¥344,408 million. Operating income was ¥3,546
million, thanks in part to increased sales.
In the industrial machinery market, sales were up in Japan,
Europe, the Americas, and Asia and others thanks to a recovery
in demand for products including construction machinery,
agricultural machinery, and machine tools. The resulting net sales
were ¥99,451 million and operating income was ¥3,111 million,
the latter thanks to increased sales.
In the aftermarket and distributor markets, sales increased on
demand recovery in Japan, Europe, the Americas, and Asia and others,
a positive trend that resulted in net sales of ¥86,197 million. Operating
income benefitted from increased sales to reach ¥17,901 million.
Net Sales by Region
Sales in the automotive market saw an overall recovery in customer
demand, despite a stoppage of deliveries to some customers as aresult of the Great East Japan Earthquake near the end of the fiscal
year. In the industrial machinery market, sales were up significantlyin the construction machinery and machine tools sectors, while theaftermarket and distributor markets were also up. As a result, sales
were ¥186,595 million, up 19.3% over the previous year.
In Europe, sales in the automotive market were up as a whole due
to factors including recovery in customer demand. For sales to theindustrial machinery market, sectors including agricultural machinery,wind power systems, and general industrial machinery improved, as
did the aftermarket and distributor markets. Net sales were up 4.5%
to ¥132,814 million despite unfavorable foreign exchange rates.

56

Consolidated
Financial Statements

During the fiscal period, Japan’s economy was on the solid
road to recovery with increased exports, a recovery in capital
investment, and improved corporate profit. But then came theGreat East Japan Earthquake, which has hurt the recovery andcaused an electricity shortage that is feared to last for sometime. In the rest of the world, the Americas have benefitted fromgovernment policies, Europe is generally improving although
unevenly across borders, and in Asia, in-region demand driven
by China is contributing to mild recovery.
In this environment, the NTN Group was promoting measuresthat include further increasing sales to the industrial machinery
sector and reducing costs, aiming to achieve business
operations that do not rely on business scale, which is anobjective of the new two-year medium-term management plan,“NTN 2010 for The Next Step,” which started in April 2009.

Japan
EuropeAsia and Others

Financial Review
Net income (Loss)/
Ratio of net income (Loss) to sales

Operating income/Operating margin(Billions of Yen)

Operating income
Operating margin
(%)

500

10

400

8

300

6

200

4

100
0

2

2006 2007 2008 2009 2010 2011

0(Billions of Yen)

(%)

6

300

(Billions of Yen)

Capital expenditures
Depreciation

600
500

4

200

400
100

2

0

0

300
200
100

-100

2006 2007 2008 2009 2010 2011

(Years ended March 31)

In the Americas, sales to the automotive market were up
overall due to factors including recovery in customer demand. In
the industrial machinery market, sales made a large jump in the
key markets of construction machinery and agricultural
machinery, while sales in the aftermarket and distributor markets
were also up. Net sales were ¥117,985 million, up 31.1% overthe previous year.
As for Asia and others, sales in the automotive market were up
overall due to factors including recovery in customer demand in
China and other parts of Asia. In the industrial machinery market,
sales improved in construction machinery and office equipment, as
well as in the aftermarket and distributor markets. The result was a
16.9% increase in net sales to ¥92,662 million.
Cost of Sales and Selling, General and Administrative(SG&A) Expenses
Cost of sales amounted to ¥437,515 million, with the percentage
of cost to overall sales rising 3.1 percentage points to 82.5%. Thisis due mainly to the effects of sales increases and cost decreases.
Selling, general, and administrative (SG&A) expenses
amounted to ¥67,981 million, with the percentage of cost to
overall sales rising 1.2 percentage points to 12.8%.
Earnings
Looking at earnings, there were factors (greater scale ofbusiness, decreased proportional costs, etc.) contributing to anincrease and factors (increased labor costs, business expenses,
cost of sales, losses on exchange rates, etc.) contributing to adecrease. The result of these offsetting factors was an operating
income for the term of ¥24,560 million, up ¥23,161 million overthe previous fiscal year. The operating margin increased by 4.3
percentage points to 4.6%.
Other expenses amounted to a net expense of ¥1,705 million
yen. Major contributing factors were gains on sale of investment
securities of ¥1,512 million, gains on negative goodwill of ¥1,286
million, compensation received of ¥559 million, gains on allotmentof shares of ¥298 million, extraordinary operating losses of ¥812
million, earthquake-related expenses of ¥538 million, provision ofreserve for product defect compensation of ¥401 million, and loss
on valuation of investment securities of ¥146 million.
As a result, the Company reported income before income
taxes of ¥22,855 million, up ¥24,693 million from the previous
fiscal year, and net income of ¥14,399 million, up ¥16,414 million.

57

Capital expenditures and depreciation

Net income (Loss)
Ratio of Net Income (Loss) to Sales-2

0

2006 2007 2008 2009 2010 2011

(Years ended March 31)(Years ended March 31)

Net income per share was 27.08 yen for the year under review.
The year-end dividend for the fiscal year under review totaled¥5 per share. Together with the interim dividend of ¥5 per share,
the dividend for the full fiscal year amounted to ¥10 per share.

R&D and Capital Expenditures
Increase in Both R&D Costs and Capital Expenditures
R&D Costs
R&D costs for the fiscal year under review were ¥15,697 million, up¥1,009 million and representing 3.0% of consolidated net sales. In
the industrial machinery market, NTN is positioning as key businessareas wind power systems, a form of new energy with promising
global growth, and the sectors of rolling stock, aircraft, machine
tools, and construction machinery, which all require state-of-the-art
bearing technology. We are working to reduce the environmental
impact of bearings by developing compact, light bearings thatboast long life and low-torque, and by developing new productsthat meet customer needs for precision and speed, while at thesame time focusing on basic technologies that will make us morecompetitive, and adding value by modularizing products suchas sensors. In the automotive market, we are meeting a rangeof electric vehicle (EV) development needs through new systemproducts like our in-wheel motor system for EVs.
Capital Expenditures
The main focus of expenditures was on increasing production
capacity, labor savings, and rationalization, maintaining andupgrading existing facilities, improving safety, and conducting
R&D for new products.
In Japan, capital expenditures were ¥11,534 million,
accounted for mainly by the installation of bearing production
equipment at the new plant of NTN Houdatsushimizu Corp., andan expansion of bearing production equipment at Kuwana Works.
In Europe, capital expenditures were ¥4,570 million, with main
projects including expansion of bearing production equipment at
NTN-SNR Roulements. In the Americas, capital expenditures
were ¥8,097 million, with main expenditures accounted for by a
new plant building at NTA Precision Axle Corp., expansion on
bearing production equipment at American NTN Bearing Mfg.
Corp. and NTN-Bower Corp., and an expansion of theconstant-velocity joint production equipment at NTN Driveshaft,
Inc. In Asia and others, projects including expansion of the plant

Inventories/Inventory turnover ratio(Billions of Yen)

1,500

Interest-bearing debt

Inventories
Inventory turnover ratio(Times)6(Billions of Yen)

3,000
2,500

1,000

4

2,000
1,500

500

2

1,000
500

0

2006 2007 2008 2009 2010 201100

2006 2007 2008 2009 2010 2011

(Years ended March 31)

building and expansion of bearing production equipment at
Shanghai NTN Corp. added up to capital expenditures of ¥5,552
million. After adjusting for ¥54 million in equipment transfers
between segments, total capital expenditures for the fiscal year
under review were ¥29,700 million, an increase of ¥8,196 million.
All expenditures were funded from internal funds andshort-term loans. Depreciation for the fiscal year under review
amounted to ¥35,936 million (down ¥4,767 million from theprevious fiscal year).

Financial Position and Cash Flows

per share from a year ago). Interest-bearing debt amounted to¥223,283 million, a decrease of ¥8,354 million (3.6%) from theend of the previous fiscal year. Taking into account the ¥6,540
million decrease from currency adjustments, interest-bearing debt
declined by ¥1,814 million. The ratio of interest-bearing debt tototal assets was 35.3% (down 2.1 percentage points).
Net working capital was ¥49,070 million, an increase of¥26,217 million from the end of the previous fiscal year. The
current ratio was 118.2% (an improvement of 9.6 percentage
points from a year earlier).
The inventory turnover ratio for the fiscal year under review was
3.9 times (up 0.3 times year on year), while the turnover ratio of total
assets was 0.8 (up 0.1 from the end of the previous fiscal year).
Net cash provided by operating activities was ¥44,503 million,a year-on-year increase of ¥533 million, or 1.2%. This mainlyreflected inflows in the form of income before income taxes of¥22,855 million, depreciation and amortization of ¥35,936 million,
and an increase in trade payables of ¥21,051 million; offset
against outlays of an increase of ¥15,817 million in inventories, adecrease in trade receivables of ¥13,639 million, and ¥6,309
million in income taxes.
Net cash used in investing activities increased ¥6,628 million,
or 25.9% year on year, to ¥32,187 million. This was due mainly tooutlays of ¥27,568 million for purchases of property, plant, andequipment, and ¥5,908 million for acquisition of investments in
subsidiaries.
Net cash used by financing activities was ¥6,696 million,
down 63.9% from the ¥11,866 million of the previous fiscal year.
This mainly reflected outflows in the form of a net decrease in
short-term loans of ¥10,699 million, repayment of ¥26,225 million
in long-term loans, and dividend payments of ¥4,785 million;
offset against income from a net increase of ¥35,187 million in
long-term loans.
Factoring in the ¥1,703 million increase due to the effect of
exchange rate changes, cash and cash equivalents at the end of the
fiscal year under review amounted to ¥40,082 million, an increase of¥7,323 million, or 22.4%, from the end of the previous fiscal year.
Free cash flow, the difference between net cash provided byoperating activities and net cash used in investing activities,
amounted to ¥12,316 million.
The proportion of net cash provided by operating activities to
net sales was 8.4%.

58

Consolidated
Financial Statements

Inventories increased ¥15.8 billion year on year.
Interest-bearing debt decreased ¥8.3 billion year on year.
Total current assets at the fiscal year-end amounted to ¥318,694
million, an increase of ¥29,968 million, or 10.4%, from the end of
the previous fiscal year. This is mainly the result of an increase ininventories of ¥10,321 million, an increase in trade receivables of¥8,766 million, and an increase in cash and cash equivalents of¥7,323 million. Property, plant, and equipment was down
¥14,434 million (5.5%) to ¥246,132 million. Investments andother assets were down ¥2,335 million (3.4%) from the end of theprevious fiscal year to ¥67,175 million. This mainly reflected adecrease of ¥2,433 million in investment securities. As a result,
total assets were ¥632,001 million, up ¥13,199 million (2.1%)
over the end of the previous fiscal year.
Current liabilities were up ¥3,751 million (1.4%) over the endof the previous fiscal year to ¥269,624 million. Major factors
included a ¥19,999 million increase in trade payables and a¥1,106 million increase in accrued income taxes. Long-term
liabilities were up ¥13,646 million (9.9%) over the end of theprevious fiscal year to ¥152,024 million, mainly reflecting a¥14,428 million increase in long-term loans.
Total net assets were ¥210,353 million, down ¥4,198 million(2.0%) over the end of the previous fiscal year. This mainlyreflected a ¥7,793 million decrease in translation adjustments, a¥5,168 million decrease in minority interests, and a ¥2,573 million
decrease in deferred retirement benefits, despite an increase of¥12,783 million in capital surplus.
The shareholders’ equity ratio was 31.6%, down 0.6 of apercentage point from the previous fiscal year. Total net assets
per share, based on the number of shares outstanding at the endof the fiscal year, were ¥376.05 per share (an increase of ¥1.86(Years ended March 31)

Risk Factors
Business results and the financial position of the NTN Group are
subject to the following risks. It should be noted that forward-looking
statements contained in the following reflect judgments of the
NTN Group as of June 28, 2011.

systems and stands ready to engage in measures to containdamage as much as possible, risks cannot be completely
eliminated. Business performance and the financial status of the
NTN Group may be affected by a natural disaster or by accidents.

1) Economy6) Dependence on Specific Industries

The NTN Group operates global production and sales networks,
and supplies customers in various industrial sectors. Businessresults and the financial position of the NTN Group operations may
be affected by the economic conditions in specific countries andbusiness conditions in industries to which our customers belong.

The NTN Group’s Bearings Division derives approximately half of
its sales revenues from the automotive industry, which also
accounts for more than half of sales of components that theConstant-velocity Joints Division produces for automotive powertransmission to the drive axle. Dependence on the automotive
industry is therefore high. Although the NTN Group works toincrease sales of bearings and precision equipment products tothe industrial machinery sector and implements policies toachieve a balanced sales structure, a rapid shift in demand in theautomotive industry could potentially affect the NTN Group’sbusiness results and financial position.

2) Foreign Exchange Fluctuations
Overseas sales of the NTN Group account for over 50% ofconsolidated sales. This percentage is expected to increase
further due to continued acceleration in the global businessdevelopment of the NTN Group.
Overseas subsidiaries’ foreign currency-denominatedbusiness results and financial positions are converted to yen forthe preparation of consolidated financial statements. Moreover,many export transactions with overseas customers of theCompany are conducted in foreign currencies. Although the NTNGroup hedges risks through forward foreign exchange contracts
and expansion of local procurement, effects of exchange rate
fluctuations on business results and financial positions cannot be
fully eliminated.

3) Declines in Market Prices
The competitive environment surrounding production and sales
activities of the NTN Group is becoming harsher worldwide. As
products from China and Eastern Europe are gaining ground,bearings have been affected by falling market prices. At the sametime, against a backdrop of global price competition, calls forprice reductions are mounting in the automotive industry, which
accounts for over half of the NTN Group sales. Although the NTNGroup works continuously to reduce costs while developing new
products of high quality and high added value, business results
and the NTN Group’s financial position may be affected by
downward pressure on market prices.

7) Product Defects
To ensure product quality, the NTN Group works to satisfy
customers’ requirements concerning product functions andspecifications, and strives to provide appropriate quality andproduct safety by enforcing quality assurance globally. However, asubstantial product defect leading to a serious accident, claim fordamages, or product recall could entail huge product warranty
costs and potentially affect business performance and thefinancial position of the NTN Group. Although the NTN Group hastaken out global product liability insurance, complete coverage forloss is not possible.

8) Intellectual Property
The NTN Group generates a wealth of innovative technologies
and know-how in the process of new product development,
representing valuable intellectual property for which the NTNGroup files patent applications to protect its rights. However,business performance and the financial position of the NTNGroup may be affected if a legal challenge is initiated against its
intellectual property or if its intellectual property is infringed by athird party.

4) Rise in Raw Materials Prices9) Risks Associated with Global Operations

The NTN Group procures a wide range of raw materials fromoutside sources. To deal with cost increases, especially of steel
materials, which pose a high weighting in materials costs,
measures have been taken such as mark-ups on selling prices toreflect higher materials cost. In addition, the Group is targeting
cost reductions through enhanced production yields and VA/VE
methods. Nevertheless, business results and the NTN Group’s
financial position may be affected by stronger than expected
increases in raw materials costs.

The NTN Group develops its business operations worldwide withoverseas sales exceeding 50% of consolidated sales. Overseas
business development is associated with the following risks:a. Risks from unforeseen change in tax systems of or between
individual countries
b. Risks from unforeseen change in laws of individual countries
c. Difficulty in hiring and retaining appropriate staff
d. Evolving technology levels and unstable labor relations inemerging economies
e. Political instability in emerging economies

5) Disasters and Accidents
Production plants and facilities of the NTN Group and its
transaction counterparts are exposed to the risk of damage fromnatural disasters such as earthquakes, floods, and fires.
Although the NTN Group has put into place crisis management59Consolidated Balance Sheets
March 31, 2011 and 2010

Assets2011

2010

Thousands of
U.S. dollars(Note 1)2011

¥ 40,082¥ 32,759$ 482,044

1,334

1,874

16,043

Millions of yen

Current Assets:
Cash and cash equivalents (Note 13)
Short-term investments (Note 13)
Trade receivables (Note 13):
8,227

6,668

98,942

101,495

93,9991,220,625

(648)

(359)

(7,793)109,074

100,308

1,311,774

136,985

126,664

1,647,444

Deferred income taxes (Note 23)

6,132

6,226

73,746

Other current assets (Note 13)

25,087

20,895

301,709318,694

288,726$ 3,832,760

Notes
Accounts
Allowance for doubtful accounts
Inventories (Note 4)

Total current assets

Property, plant and equipment, at cost (Notes 5, 7 and 22):Land

30,84929,995371,004

Buildings and structures

148,459

154,511

1,785,436

Machinery, equipment and vehicles

611,996620,2127,360,144

14,536

6,583

174,817805,840

811,301

9,691,401(559,708)(550,735)(6,731,305)

246,132

260,566

2,960,096

Investment securities (Notes 6 and 13)

27,49729,930330,692

Investments in unconsolidated subsidiaries and affiliates (Note 13)

10,768

10,976

129,501

Deferred income taxes (Note 23)

24,21523,129291,221

Other assets

4,695

5,475

56,464

67,17569,510807,878¥ 632,001¥ 618,802$ 7,600,734

Construction in progress
Less accumulated depreciation
Property, plant and equipment, net (Note 26)

Investments and other assets:

Total investments and other assets

Total assets (Note 26)
See accompanying notes to the consolidated financial statements.

Consolidated
Financial Statements

60Consolidated Balance Sheets
March 31, 2011 and 2010

2011

2010

Thousands of
U.S. dollars(Note 1)2011

¥ 95,581¥ 110,407$ 1,149,501

18,83926,914

226,566

Notes

12,572

10,476

151,197

Accounts

97,63479,731

1,174,191

110,206

90,207

1,325,388

3,743

2,637

45,015

212

300

2,550

Other current liabilities

41,04335,408493,602

Total current liabilities (Note 26)269,624265,873

3,242,622

Long-term debt (Notes 7 and 13)

110,129

95,701

1,324,462

Accrued retirement benefits for employees (Note 8)

30,83430,258370,824

Reserve for product defect compensation (Note 16)

846

1,339

10,174

Liabilities and net assets

Millions of yen

Current liabilities:
Short-term bank loans (Notes 7 and 13)
Current portion of long-term debt (Notes 7 and 13)
Trade payables (Note 13):

Accrued income taxes (Notes 13 and 23)
Deferred income taxes (Note 23)

Long-term liabilities:

Negative goodwill
Deferred income taxes (Note 23)

−

37

−

3,871

3,968

46,554

Other long-term liabilities

6,344

7,075

76,296

Total long-term liabilities (Note 26)

152,024

138,378

1,828,310

653,602

Contingent liabilities (Note 10)
Net assets:
Shareholders’ equity (Note 9):
Common stock:
Authorized — 1,800,000,000 shares
54,34754,347

Capital surplus

67,41867,418810,800

Retained earnings (Note 28)

113,030

100,247

1,359,351

Issued — 532,463,527 shares in 2011 and 2010

Treasury stock, at cost: 824,400 shares in 2011 and 773,007 shares in 2010
Total shareholders’ equity

(758)

(737)

(9,116)

234,037

221,275

2,814,637

2,137

3,629

25,701

Accumulated other comprehensive income (loss):
Net unrealized holding gain on securities (Note 6)
Unrealized loss from hedging instruments (Note 14)
Translation adjustments
Unfunded retirement benefit obligation of foreign subsidiaries
Total accumulated other comprehensive loss, net
Minority interests
Total net assets
Total liabilities and net assets
See accompanying notes to the consolidated financial statements.

61

−

(66)

−

(33,679)(25,886)(405,040)(2,573)−(30,944)(34,115)(22,323)(410,283)

10,431

15,599125,448

210,353

214,5512,529,802¥ 632,001¥ 618,802$ 7,600,734

Consolidated Statements of Operations
Years ended March 31, 2011 and 2010

2011

2010

Thousands of
U.S. dollars(Note 1)2011

¥ 530,056
437,515
92,541¥ 452,746
387,743
65,003$ 6,374,696
5,261,756
1,112,940

67,981
24,56063,604
1,399

817,570
295,370661(3,243)
507
37
1,512
1,286
559
298
(812)
(538)
(401)
(146)
−
−
−
−
−
(1,425)(1,705)22,855591(3,965)
(120)
1,132
−
−
−
−
−
−
−
−
723
(1,183)
(350)
(238)
(142)
315
(3,237)(1,838)

7,949(39,002)
6,097
445
18,184
15,466
6,723
3,584(9,765)(6,470)(4,823)(1,756)−−−−−(17,137)(20,505)
274,865

7,624
(758)
6,866
15,989(1,590)¥ 14,399

3,677(5,763)(2,086)248(2,263)¥ (2,015)

91,690(9,116)
82,574
192,291(19,122)$ 173,169

Millions of yen

Net sales (Note 26)
Cost of sales (Note 15)
Gross profit
Selling, general and administrative expenses (Note 15)
Operating income (Note 26)
Other income (expenses):
Interest and dividend income
Interest expense
Equity in earnings (losses) of affiliates
Amortization of negative goodwill
Gain on sales of investment securities (Note 6)
Gain on recognition of negative goodwill (Notes 26 and 27)
Compensation income
Gain on allocation of shares (Note 17)
Loss resulting from low operating capacity (Note 18)
Loss on earthquake (Note 19)
Provision of reserve for product defect compensation (Note 16)
Loss on valuation of investment securities (Note 6)
Gain on sales of investments in subsidiaries
Loss on liquidation of a subsidiary (Note 21)
Loss on impairment of fixed assets (Note 5)
Loss on valuation of investments in subsidiaries and affiliates
Reorganization expenses (Note 20)
Other, net
Income (loss) before income taxes and minority interests
Income taxes (Note 23):
Current
DeferredIncome before minority interests
Minority interests
Net income (loss)
See accompanying notes to the consolidated financial statements.

Consolidated Statement of Comprehensive Income
Years ended March 31, 2011

Total comprehensive income attributable to:Shareholders of NTN Corporation
Minority interest¥ 15,989$ 192,291(1,492)
66(7,393)63(395)(9,151)¥ 6,838(17,943)794(88,912)758(4,751)(110,054)$ 82,237¥ 5,777¥ 1,061$ 69,477$ 12,760

Consolidated
Financial Statements

Income before minority interests
Other comprehensive income (loss):
Net unrealized holding loss on securities (Note 6)
Unrealized gain from hedging instruments (Note 14)
Translation adjustments
Unfunded retirement benefit obligation of foreign subsidiaries
Share of other comprehensive loss of affiliates accounted for by the equity method
Other comprehensive loss, net
Comprehensive income

Millions of yen
2011

Thousands of
U.S. dollars(Note 1)2011

See accompanying notes to the consolidated financial statements.

62

Consolidated Statements of Changes in Net Assets
Years ended March 31, 2011 and 2010

Millions of yen

Treasurystock,
at costNet
unrealized
holding
gain onsecurities

Unrealized
loss fromhedging
instruments

Translation
adjustments

Unfundedretirement
benefitobligationof foreignsubsidiaries

Number ofshares in
issue

Commonstock

Capitalsurplus

Balance at March 31, 2009

470,463,527¥ 42,340¥ 55,411 ¥ 105,525¥ (728)¥ (405)¥–¥ (25,167)¥–

Issuance of new shares

62,000,000

12,007

12,007

–

–

–

–

–

–

–

24,014

Cash dividends paid

–

–

–

(4,006)

–

–

–

–

–

–

(4,006)Net loss–––(2,015)

–

–

–

–

–

–

(2,015)Retainedearnings

Minority
interests

Total net
assets¥ 15,247 ¥ 192,223

Actuarial differences ofoverseas subsidiaries

–

–

–

743

–

–

–

–

–

–

743

Purchases of treasury stock

–

–

–

–

(14)

–

–

–

–

–

(14)

Sales of treasury stock

–

–

–

–

5

–

–

–

–

–

5

–

–

–

–

–

4,034

(66)

(719)

–

352

3,601

532,463,527

54,34767,418100,247

(737)

3,629

(66)

(25,886)–

15,599214,551

Other changes
Balance at March 31, 2010
Effect of application of
accounting standard forpresentation ofcomprehensive
income (Note 3)

–

–

–

3,169

–

–

–

(533)

(2,636)––

Cash dividends paid

–

–

–

(4,785)

–

–

–

–

–

–

(4,785)

Net income

–

–

–

14,399

–

–

–

–

–

–

14,399Purchases of treasury stock

–

–

–

–

(22)

–

–

–

–

–

(22)

Sales of treasury stock

–

–

–

–

1

–

–

–

–

–

1

Other changes

–

–

–

–

–

(1,492)

66(7,260)63(5,168)(13,791)

Balance at March 31, 2011 532,463,527¥ 54,347¥ (758) ¥ 2,137¥–¥ (33,679)¥ 67,418 ¥ 113,030¥ (2,573) ¥ 10,431 ¥ 210,353

Thousands of U.S. dollars (Note 1)

Commonstock

Balance at March 31, 2010

CapitalsurplusTreasurystock,
at costRetainedearnings

Net
unrealized Unrealized
holding
loss fromgain onhedgingsecurities instruments$ 653,602 $ 810,800 $ 1,205,617 $ (8,863) $ 43,644

Translation
adjustments$ (794)$ (311,318)

Unfundedretirement
benefitobligationof foreignsubsidiaries

Minority
interests

Total net
assets$ – $ 187,601 $ 2,580,289

Effect of application of
accounting standard
for presentation ofcomprehensive income (Note 3)––

Cash dividends paid–

Net income–

Purchases of treasury stock
Sales of treasury stock
Other changes
Balance at March 31, 2011

63

38,112–––(6,410)(31,702)–––(57,547)

–

–

–

–

–

–

(57,547)–

173,169

–

–

–

–

–

–

173,169

–

–

–

(265)

–

–

–

–

–

(265)

–

–

–

12

–

–

–

–

–

12

–

–

–

–

(17,943)794(87,312)758(62,153)(165,856)$ 653,602 $ 810,800 $ 1,359,351 $ (9,116) $ 25,701$–$ (405,040) $ (30,944) $ 125,448 $ 2,529,802

Consolidated Statements of Cash Flows
Years ended March 31, 2011 and 2010

Cash flows from operating activities:
Income (loss) before income taxes and minority interests
Adjustments for:
Depreciation and amortization
Amortization of negative goodwill
Gain on recognition of negative goodwill
Increase in allowance for doubtful accounts
Increase (decrease) in allowance for directors’ andcorporate auditors’ bonuses
Increase (decrease) in accrued retirement benefits for employees
Decrease in reserve for product defect compensation
Decrease in other current and long-term liabilities resulting fromamendment of pension plans
Interest and dividend income
Interest expense
Translation adjustments and foreign exchange loss, net
Equity in (earnings) losses of affiliates
Gain on sales of investments in subsidiaries (Note 25)
Loss on impairment of fixed assets
Loss on valuation of investments in subsidiaries and affiliates
Increase in trade receivables(Increase) decrease in inventories
Increase in trade payables
Other
SubtotalInterest and dividend income received
Interest paid
Income taxes paid
Net cash provided by operating activities2010¥ 22,855¥ (1,838)$ 274,865

35,936(37)(1,286)314

40,703(1,132)–
26

432,183(445)(15,466)
3,776

170
1,244
(491)

(11)
(1,620)
(200)

2,044
14,961(5,905)(1,583)
(661)
3,243
112
(507)
–
–
–
(13,639)(15,817)
21,051
2,174
53,078932(3,198)(6,309)¥ 44,503(1,978)
(591)
3,965
229
120
(723)
350
238
(23,391)
11,165
18,566
6,942
50,8201,136(4,303)(3,683)¥ 43,970(19,038)(7,949)39,002
1,347(6,097)–––(164,029)(190,222)
253,169
26,144
638,340
11,209(38,461)(75,875)$ 535,213

Cash flows from investing activities:
Decrease in short-term investments
Purchases of property, plant and equipment
Purchases of other assets
Proceeds from sales of property, plant and equipment
Purchases of investment securities
Proceeds from sales of investment securities
Purchases of investments in subsidiaries
Proceeds from sales of investments in subsidiaries resulting inchange in scope of consolidation (Note 25)
Purchases of investments in an affiliate
Other
Net cash used in investing activities¥ 358(27,568)
(527)
25
(158)
1,564
(5,908)¥ 85(25,401)(541)
25(1,900)––$ 4,305(331,545)(6,338)301(1,900)18,809(71,052)–(30)
57(32,187)

2,421
–
(248)
(25,559)

–
(361)
685
(387,096)

Cash flows from financing activities:
Decrease in short-term bank loans, net
Proceeds from long-term debt
Repayment of long-term debt, including current portion
Proceeds from issuance of common stock
Proceeds from issuance of common stock assigned to minority
shareholders of a consolidated subsidiary
Cash dividends paid
Repayment of lease obligations
Other
Net cash used in financing activities(10,699)
35,187(26,225)–(45,447)
19,527(12,224)
23,884(128,671)
423,176(315,394)–

204(4,785)(189)(189)(6,696)–(4,006)(150)(146)(18,562)2,453(57,547)(2,273)(2,273)(80,529)

Effect of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year

1,703
7,323
32,759¥ 40,082

1,914
1,763
30,996¥ 32,759

20,481
88,069393,975$ 482,044

Consolidated
Financial Statements

2011

Thousands of
U.S. dollars(Note 1)
2011

Millions of yen

See accompanying notes to the consolidated financial statements.

64Notes to Consolidated Financial Statements
March 31, 2011

1. Basis of Preparation
The accompanying consolidated financial statements of NTN
Corporation (the “Company”) and consolidated subsidiaries areprepared on the basis of accounting principles generally accepted inJapan, which are different in certain respects as to the applicationand disclosure requirements of International Financial ReportingStandards, and are compiled from the consolidated financial
statements prepared by the Company as required by the Financial
Instruments and Exchange Act of Japan.
In preparing the accompanying consolidated financial statements,
certain reclassifications have been made to the consolidated financial
statements issued domestically in order to present them in a format
which is more familiar to readers outside Japan. In addition, certain
notes included herein are not required under accounting principles
generally accepted in Japan but are presented as additional information.
The translation of yen amounts into U.S. dollar amounts is included
solely for the convenience of readers outside Japan and has been
made at ¥83.15 = U.S.$1.00, the exchange rate prevailing on March
31, 2011. This translation should not be construed as arepresentation that yen can be converted into U.S. dollars at theabove or any other rate.

2. Summary of Significant Accounting Policies(a) Principles of consolidation
The accompanying consolidated financial statements include theaccounts of the Company and the significant companies which it
controls directly or indirectly. Companies over which the Company
exercises significant influence in terms of their operating and financial
policies have been included in the accompanying consolidated
financial statements on an equity basis.
The financial statements of certain consolidated subsidiaries whose
fiscal year end is December 31 have been included in consolidationon the basis of a full fiscal year closing on March 31 for consolidation
purposes.

(b) Foreign currency translation
Monetary assets and liabilities denominated in foreign currencies aretranslated into yen at the rates of exchange in effect at the balance
sheet date. Revenues and expenses are translated at the rates of
exchange prevailing when the transactions were made.
Assets and liabilities of overseas consolidated subsidiaries aretranslated into yen at the exchange rates in effect at the respectivebalance sheet dates, except for the components of net assets
excluding minority interests which are translated at the respective
historical rates. Revenue and expenses are translated at the average
rates of exchange for the respective years. Differences arising fromtranslation are reflected in “Translation adjustments” and “Minority
interests” in the accompanying consolidated balance sheets andstatements of changes in net assets.

(c) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, deposits withbanks withdrawable on demand, and short-term investments which
are readily convertible to cash subject to an insignificant risk of any
change in their value and which were purchased with an original
maturity of three months or less.

(d) Allowance for doubtful accounts
The allowance for doubtful accounts is computed based on theactual historical percentage of bad debts and an estimate of
uncollectible amounts determined after an analysis of specificindividual receivables.

(e) Short-term investments and investment securities
The accounting standard for financial instruments requires that
securities be classified into three categories: trading, held-to-maturity

65

or other securities. Trading securities are carried at fair value andheld-to-maturity debt securities are carried at amortized cost.
Marketable securities classified as other securities are carried at fairvalue with any changes in unrealized holding gain or loss, net of theapplicable income taxes, included directly in net assets. Cost of
securities sold is determined by the moving average method.
Non-marketable securities classified as other securities are carried atcost based on the moving average method.

(f) Inventories
Inventories are principally stated at lower of cost, determined by theaverage method, or net selling value.

(g) Property, plant and equipment
Property, plant and equipment are stated at cost. Depreciation iscomputed at rates based on the estimated useful lives of therespective assets by the declining-balance method, except for thebuildings and assets of foreign consolidated subsidiaries to which thestraight-line method is principally applied.
The principal estimated useful lives are as follows:
Buildings and structures
Machinery, equipment and vehicles

10 to 50 years
5 to 12 years

Contributions granted by national and municipal governments are
deducted directly from the acquisition costs of the related fixed assets
as stipulated in the Corporation Tax Law of Japan. The property,
plant and equipment accounts on the consolidated balance sheets at
March 31, 2011 and 2010 were reduced by the following amounts:
Millions of yen
2011
2010

Land
Buildings andstructures
Machinery,equipment
and vehicles

Thousands of
U.S. dollars
2011

¥ 721

¥ 721

$ 8,671

524

501

6,302

730

561

8,779

(h) Accrued retirement benefits for employees
Accrued retirement benefits for employees have been provided
principally at an amount calculated based on the retirement benefit
obligation and the fair value of the pension plan assets, as adjusted
for net unrecognized actuarial gain or loss and unrecognized priorservice cost. The estimated benefit is attributed to each period by
the straight-line method over the estimated years of service of theeligible employees.
Prior service cost is amortized in the year in which the gain or loss isrecognized primarily by the straight-line method over a period of
principally 15 years, which is within the estimated average remaining
years of service of the eligible employees.
Net unrecognized actuarial gain or loss is amortized commencing theyear following the year in which the gain or loss was recognizedprimarily by the straight-line method over a period of principally 15
years, which is within the estimated average remaining years ofservice of the eligible employees.

(i) Reserve for product defect compensation
Reserve for product defect compensation is provided at an estimatedamount in order to cover the anticipated compensation.

(j) Leases
For lease transactions involving the transfer of ownership, theleased assets are depreciated by the same methods used forowned fixed assets.

For lease transactions not involving the transfer of ownership, leased
assets are depreciated over the lease period using the straight-line
method with a nil residual value.
The Company and its domestic consolidated subsidiaries continue toaccount for finance lease transactions not involving the transfer ofownership that commenced prior to April 1, 2008 as operating leases.

(k) Goodwill
Goodwill of immaterial amounts is charged to income as incurred.

(l) Research and development costs and computer software
Research and development costs are charged to income as incurred.
Expenditures relating to computer software developed for internal
use are charged to income when incurred, except if the software is
expected to contribute to the generation of income or to future costsavings. Such expenditures are capitalized as assets and areamortized by the straight-line method over their respective estimateduseful lives, generally a 5-year period.

(m) Deferred income taxes

Investments” (ASBJ Statement No.16 issued on December 26,2008), “Guidance on Accounting Standard for Business
Combinations and Accounting Standard for Business Divestitures”(ASBJ Guidance No.10 issued on December 26, 2008).

(c) Accounting Standard for Presentation of Comprehensive Income
Effective April 1, 2010, the Company adopted “Accounting Standard
for Presentation of Comprehensive Income” (ASBJ Statement No.25
issued on June 30, 2010) and the Company was required to present
the consolidated statement of comprehensive income.
Under this accounting standard, one item, which was previously
presented as part of the “Retained earnings” as “Actuarial
differences of overseas subsidiaries,” is separated and presented as“Unfunded retirement benefit obligation of foreign subsidiaries” and“Translation adjustments” as part of “net assets.” As a result, the“Actuarial differences of overseas subsidiaries” for previous years,
which would have been presented, was identified as “Effect ofapplication of accounting standard for presentation ofcomprehensive income” and “other changes” in the consolidated
statements of changes in net assets.

Deferred income taxes are provided for temporary differences between
the balances of assets and liabilities reported for financial reporting
purposes and the corresponding balances for tax reporting purposes.

The item “Unfunded retirement benefit obligation of foreignsubsidiaries” under the new standard of presentation amounted to¥2,636 million position at March 31, 2010.

(n) Derivative financial instruments and hedging activities

The following tables present other comprehensive income (loss) andtotal comprehensive income attributable to shareholders of theCompany and minority interests for the year ended March 31, 2010:

All derivatives are stated at fair value with any changes in fair value
included in net income for the period in which they arise, except forderivatives which meet the criteria for deferral hedge accounting
under which realized gain or loss, net of the applicable income taxes,
is deferred as a component of net assets. Receivables and payables
hedged by forward foreign exchange contracts which meet certain
conditions are translated at the corresponding foreign exchange
contract rates. An interest-rate swap which meets certain conditions
is accounted for as if the interest rates applied to the interest-rate
swap had originally applied to the underlying debt.

(o) Distribution of retained earnings
Under the Corporation Law of Japan and the Company’s Articles ofIncorporation, the distribution of retained earnings with respect to agiven financial period is made by resolution of the shareholders at a
general meeting held subsequent to the close of the financial period.
The distribution of retained earnings with respect to the interim
financial period is made by resolution of the Board of Directors. The
accounts for the period do not reflect such distributions. (Refer toNote 28.)

3. Accounting Changes(a) Accounting Standard for Asset Retirement Obligations

Other comprehensive income (loss):
Net unrealized holding gain on securities
Unrealized loss from hedging instruments
Translation adjustments
Unfunded retirement benefit obligation offoreign subsidiaries
Share of other comprehensive income ofaffiliates accounted for by the equity method
Total comprehensive income attributable to:Shareholders of the Company
Minority interests925
656¥ 3,626¥ 1,977
1,897¥ 3,874(d) Accrued retirement benefits for employees
Effective April 1, 2009, the Company and its domestic consolidated
subsidiaries adopted “Partial Amendments to Accounting Standard
for Retirement Benefits (Part 3)” ASBJ Statement No. 19 issued on
July 31, 2008). The effect of the adoption of this standard was nil tothe unrecognized portion of unfunded retirement benefit obligation atMarch 31, 2010 and consolidated operating income and loss before
income taxes and minority interests for the year then ended.

4. Inventories
Inventories at March 31, 2011 and 2010 consisted of the following:(b) Accounting Standard for Business Combinations and Others
Effective April 1, 2010, the Company adopted “Accounting Standard
for Business Combinations” (ASBJ Statement No.21 issued on
December 26, 2008), “Accounting Standard for Consolidated
Financial Statements” (ASBJ Statement No.22 issued on December
26, 2008), “Partial Amendments to Accounting Standard for
Research and Development Costs” (ASBJ Statement No.23 issued
on December 26, 2008), “Accounting Standard for Business
Divestitures” (ASBJ Statement No.7 issued on December 26, 2008),“Accounting Standard for Equity Method of Accounting for¥ 4,034(66)(1,923)

Consolidated
Financial Statements

Effective April 1, 2010, the Company and its domestic consolidated
subsidiaries adopted “Accounting Standard for Asset Retirement
Obligations” (Accounting Standards Board of Japan (“ASBJ”)
Statement No.18 issued on March 31, 2008) and “Guidance on
Accounting Standard for Asset Retirement Obligations” (ASBJ
Guidance No.21 issued on March 31, 2008). The adoption of thesestandards had no effect on operating income or income before
income taxes and minority interests for the year ended March 31, 2011.

Millions of yen
2010

Millions of yen
2011
2010

Finished goods
Work in process
Raw materials
and supplies

Thousands of
U.S. dollars
2011¥ 73,762
39,063¥ 68,923
36,668$ 887,095
469,790

24,160¥ 136,985

21,073¥ 126,664

290,559$ 1,647,444

66

Notes to Consolidated Financial Statements
March 31, 2011

5. Impairment of Fixed Assets
The Company and its consolidated subsidiaries group fixed assets used for manufacturing by management segment into minimum units which
generate identifiable cash flows (e.g., a factory). They also group fixed assets used at the head office or used for sales activities as shared assets.
The Company and its consolidated subsidiaries wrote down the following assets to their respective net recoverable values because the Company
and its consolidated subsidiaries do not expect any future use for them and do not expect them to be recoverable. Consequently, the Company
and its consolidated subsidiaries recorded a related loss on impairment of fixed assets of ¥350 million in the accompanying consolidated statementof operations for the year ended March 31, 2010:
Millions of yen
2010

Usage

Classification

Location

Production equipment
Production equipment
Production equipment

Machinery and equipment
Machinery and equipment
Machinery and equipment

China
Shizuoka Prefecture
France

¥ 160
96
94
¥ 350

The recoverable value of the fixed assets presented in the above table has been measured primarily at net realizable value based on appraisals
conducted by real estate appraisers or value in use. If a fixed asset cannot be sold or diverted to other usage, such asset is valued at nil.

6. Securities(a) Information regarding marketable securities classified as other securities at March 31, 2011 and 2010 is summarized as follows:
Millions of yen

Securities whose carrying value exceeds
their acquisition costs:
Equity securities
Subtotal
Securities whose carrying value does notexceed their acquisition costs:
Equity securities
Other
Subtotal
Total

Carrying
value

2011
Acquisition
costs

Unrealized
gain (loss)¥ 17,774
17,774¥ 11,377
11,377

5,628
3,000
8,628
¥ 26,402

8,464
3,000
11,464¥ 22,841

Carrying
value

2010
Acquisition
costs

Unrealized
gain (loss)¥ 6,397
6,397¥ 21,388
21,388¥ 13,099
13,099¥ 8,289
8,289(2,836)–(2,836)¥ 3,561

4,324
7,025
11,349¥ 32,737

6,547
7,044
13,591¥ 26,690(2,223)(19)(2,242)¥ 6,047

Thousands of U.S. dollars
2011
Carrying
Acquisition
Unrealized
value
costs
gain (loss)

Securities whose carrying value exceeds
their acquisition costs:
Equity securities
Subtotal
Securities whose carrying value does notexceed their acquisition costs:
Equity securities
Other
Subtotal
Total$ 213,758
213,758$ 136,825
136,825$ 76,933
76,93367,68636,079103,765$ 317,523

101,792
36,079137,871$ 274,696(34,106)–(34,106)$ 42,827

Impairment losses are recorded for securities whose fair value has declined by 50% or more, or whose fair value has declined by 30% or more, butless than 50%, if the decline is deemed to be irrecoverable.
The Company has recognized an impairment loss on valuation of investment securities of ¥146 million ($1,756 thousand) for the year ended March
31, 2011. In addition, no impairment loss was recognized for those investment securities whose fair values had declined by 30% or more, but lessthan 50% as of March 31, 2011 because they were determined to be recoverable.
(b) Sales and aggregate gain on investment securities for the years ended March 31, 2011 are summarized as follows:

Sales
Aggregate gain

Millions of yen
2011

Thousands of
U.S. dollars
2011¥ 1,6101,512$ 19,363
18,184

7. Short-Term Bank Loans and Long-Term Debt
Short-term bank loans principally represent short-term notes with average annual interest rates of 0.87% and 0.86% at March 31, 2011 and 2010,
respectively.
Long-term debt at March 31, 2011 and 2010 consisted of the following:

67

Millions of yen
2011
2010

Loans from banks and other financial institutions, due through 2018,at an average annual interest rate of 1.9%
0.76% unsecured bonds due 2010
1.66% unsecured bonds due 2013
Lease obligations due through 2018
Less current portion¥ 117,703–
10,0001,265
128,968(18,839)¥ 110,129¥ 91,232
20,00010,000
1,383
122,615(26,914)¥ 95,701

Thousands of
U.S. dollars
2011$ 1,415,550–
120,265
15,213
1,551,028(226,566)$ 1,324,462

Assets pledged as collateral for short-term bank loans of ¥500 million ($6,013 thousand) at March 31, 2011 were as follows:Land
Buildings and structures

Millions of yen
2011

Thousands of
U.S. dollars
2011

¥ 298
308
¥ 606

$ 3,584
3,704$ 7,288

Millions of yen
2011

Thousands of
U.S. dollars
2011¥ 18,839
13,74058,387
13,95915,5428,501¥ 128,968$ 226,566
165,244
702,189
167,877
186,915
102,237$ 1,551,028

The aggregate annual maturities of long-term debt subsequent to March 31, 2011 are summarized as follows:Year ending March 31,

2012
2013
2014
2015
2016
2017 and thereafter

8. Accrued Retirement Benefits for Employees
The Company and certain domestic consolidated subsidiaries have defined benefit pension plans, i.e., corporate pension fund plans andlump-sum payment plans, covering substantially all employees who are entitled to lump-sum or annuity payments, the amounts of which are
determined by reference to their basic rates of pay, length of service, and the conditions under which termination occurs. They also have defined
contribution pension plans and advance payment plan. Certain overseas consolidated subsidiaries also have defined benefit pension plans anddefined contribution pension plans.
The following table sets forth the funded and accrued status and the amounts recognized in the accompanying consolidated balance sheets at
March 31, 2011 and 2010 for the Company’s and consolidated subsidiaries’ defined benefit pension plans:Millions of yen
2011
2010

¥ (97,109)
52,451(44,658)
14,587(701)(30,772)62¥ (30,834)¥ (99,147)
55,695(43,452)
14,204(985)(30,233)
25¥ (30,258)$ (1,167,877)
630,800(537,077)
175,430(8,431)(370,078)
746$ (370,824)

The components of retirement benefit expenses for the years ended March 31, 2011 and 2010 are outlined as follows:
Millions of yen
2011
2010

Service cost
Interest cost
Expected return on plan assets
Amortization:
Actuarial loss
Prior service cost
Retirement benefit expenses
Contributions to defined contribution pension plans
Retirement benefit expenses

Thousands of
U.S. dollars
2011¥ 2,909
2,808(1,518)¥ 2,832
2,949(1,402)$ 34,985
33,770(18,256)

1,737
(184)
5,752
1,136
¥ 6,888

2,070
(169)
6,280
777
¥ 7,057

20,890(2,213)
69,176
13,662$ 82,838

The assumptions used in accounting for the defined benefit pension plans for the years ended March 31, 2011 and 2010 are a discount rate
principally of 2.6% and an expected rate of return on plan assets principally of 2.5%.

68

Consolidated
Financial Statements

Retirement benefit obligation
Plan assets at fair value
Unfunded retirement benefit obligation
Unrecognized actuarial loss
Unrecognized prior service cost
Net retirement benefit obligation
Prepaid pension costAccrued retirement benefits for employees

Thousands of
U.S. dollars
2011Notes to Consolidated Financial Statements
March 31, 2011

9. Shareholders’ Equity(a) The Corporation Law of Japan (the “Law”) provides that an amount equal to 10% of the amount to be disbursed as distributions of capitalsurplus (other than the capital reserve) and retained earnings (other than the legal reserve) be transferred to the capital reserve and the legal
reserve, respectively, until the sum of the capital reserve and the legal reserve equals 25% of the capital stock account. Such distributions can bemade at any time by resolution of the shareholders, or by the Board of Directors if certain conditions are met.
Retained earnings include the legal reserve provided in accordance with the provisions of the Law. The legal reserve of the Company included inretained earnings amounted to ¥8,639 million ($103,897 thousand) at March 31, 2011 and 2010.
(b) Movements in shares issued and treasury stock during the years ended March 31, 2011 and 2010 are summarized as follows:
Number of shares
2011
Increase
Decrease

March 31, 2010

Shares issued:
Common stock
Treasury stock:
Common stock

March 31, 2011

532,463,527––

532,463,527

773,00754,8603,467

824,400

Decrease

March 31, 20102010

Shares issued:
Common stock
Treasury stock:
Common stock

March 31, 2009

Increase

470,463,527

62,000,000–

532,463,527

750,86235,08912,944

773,007

The increases of treasury stock were due to purchase of shares of less than one voting unit and the decreases of treasury stock were due to salesof shares at requests of shareholders who own less than one voting unit for the years ended March 31, 2011 and 2010. The increase of sharesissued was due to issuance of new shares by public offering and to third party for the year ended March 31, 2010.

10. Contingent Liabilities
The contingent liabilities of the Company at March 31, 2011 were as follows:

Keep-well agreement with an affiliate, NTN de Mexico, S.A. for its loans from financial institutions

Millions of yen
2011

Thousands of
U.S. dollars
2011

¥ 137

$ 1,648

11. Finance Lease Transactions That Do Not Transfer Ownership
Lessees’ accounting
The following pro forma amounts represent the acquisition costs, accumulated depreciation and net book value of property leased to the Company
and its consolidated subsidiaries at March 31, 2011 and 2010, which would have been reflected in the accompanying consolidated balance sheets
if finance leases other than those which transfer the ownership of the leased property to the Company and its consolidated subsidiaries (which are
currently accounted for as operating leases) had been capitalized:
Millions of yen

Buildings and structures
Machinery, equipment and vehicles
Other assets

Acquisition
costs

2011
Accumulated
depreciation

Net bookvalue

Acquisition
costs

2010
Accumulated
depreciation

Net bookvalue¥ 1,419139
8¥ 1,566¥ 1,033
103
7¥ 1,143

¥ 386
36
1
¥ 423

¥ 2,639250
14¥ 2,903¥ 2,144178
11¥ 2,333

¥ 495
72
3
¥ 570

Thousands of U.S. dollars
2011
Acquisition
Accumulated
Net book
costs
depreciation
value

Buildings and structures
Machinery, equipment and vehicles
Other assets$ 17,065
1,672
96$ 18,833$ 12,423
1,239
84$ 13,746$ 4,642433
12$ 5,087

Lease payments relating to finance leases accounted for as operating leases in the accompanying consolidated financial statements amounted to¥144 million ($1,732 thousand) and ¥171 million for the years ended March 31, 2011 and 2010, respectively. Depreciation of the leased assets
computed by the straight-line method over the respective lease terms with a nil residual value amounted to ¥144 million ($1,732 thousand) and¥171 million for the years ended March 31, 2011 and 2010, respectively.
Future minimum lease payments subsequent to March 31, 2011 for finance leases accounted for as operating leases are summarized as follows:69

Year ending March 31

Millions of yen

Thousands of
U.S. dollars

20122013 and thereafter
Total

¥ 80
343
¥ 423

$ 962
4,125
$ 5,087

The acquisition costs and future minimum lease payments under finance leases presented in the above tables include the imputed interest
expense.
No loss on impairment was allocated to any leased assets for the years ended March 31, 2011 and 2010.

12. Operating Leases
Future minimum lease payments subsequent to March 31, 2011 for non-cancelable operating leases were as follows:Year ending March 31,

Millions of yen

Thousands of
U.S. dollars

20122013 and thereafter
Total

¥ 175
1,741
¥ 1,916$ 2,105
20,938$ 23,043

13. Financial Instruments – Fair Value
Effective the year ended March 31, 2010, the Company adopted “Accounting Standard for Financial Instruments” (ASBJ Statement No.10
originally issued on January 11, 1999 and revised on March 10, 2008) and “Guidance on Disclosures about Fair Value of Financial Instruments”(ASBJ Guidance No.19 issued on March 10, 2008). These accounting standards require the Company to disclose the fair values of all financial
instruments.

Overview(a) Policy for financial instruments
The Company and its subsidiaries (collectively, the “Group”) raisenecessary funds in accordance with management plans mainly bybank borrowings and corporate bonds in support of operations related
to the manufacture and sales of bearings, constant-velocity joints(CVJs) and precision equipments. The Group utilizes bank borrowings
for short-term operating funds, and bank borrowings and corporate
bonds for long-term capital investments and finances. Temporary
surplus funds are managed by low-risk financial assets. The Grouputilizes derivatives to avoid or mitigate risks as described in the laterpart of this note and does not hold them for speculative purposes.

(b) Types of financial instruments and related risks
Trade receivables, notes and accounts receivable, are exposed tocredit risk of customers. In addition, as a result of the business of theGroup, which operates globally, foreign currency trade receivables
are exposed to currency rate fluctuation risk, which is mitigated byutilizing forward foreign currency exchange contracts.
Securities are mainly composed of stocks of the companies withwhich the Group has business relationships and they are exposed tofluctuation risk of market prices.

Loans and corporate bonds are mainly utilized for business
operations of the Group. Short-term loans are mainly utilized forfinancing of operating activities. Long-term loans and corporate
bonds are mainly utilized for capital investments and financing. These
have maturity dates of less than 8 years, at the longest, subsequent
to March 31, 2011. Certain loans are exposed to fluctuation risk ofinterest rates due to floating rates and this risk is hedged by interest
rate swap agreements.
The Group has a policy to utilize derivative transactions involving
forward foreign currency exchange contracts, currency option
agreements, currency swap agreements, interest swap agreements
and interest option agreements for the purpose of avoiding futurefluctuation risk of foreign currencies trade receivables and payables
and mitigating future fluctuation risk of interest rate of loans andcorporate bonds. The Group utilized forward foreign currency(c) Risk management for financial instruments(i) Monitoring of credit risk (the risk that customers or counterparties
may default)
In accordance with internal rules and manual, the credit management
section periodically monitors financial conditions of major customers,
manages collection due dates and balances of each customer andtries to identify credit risk of customers with worsening financial
conditions at the early stage and mitigate the risk.
Credit risk of securities is quite low because the Group utilizes
certificate of deposits with high credit ratings, up to a limited amount,which is approved by the Company.
The Group believes credit risk of derivative transactions is almost nil
because counterparties are financial institutions with high credit ratings.
(ii) Monitoring of market risks (the risks arising from fluctuations inforeign currency exchange rates, interest rates and others)
The Group mainly utilizes forward foreign currency exchange
contracts for hedging of fluctuation risk which is identified by eachcurrency. Depending on the market conditions of foreign currencies,
the Group utilizes forward foreign currency exchange contracts forforecasted export transactions with a maximum period of 6 months.
The Group utilizes interest rate swap agreements to mitigate
fluctuation risk of interest rates.
The Group continuously reviews securities holdings by monitoring
periodically the market value and financial condition of securities’issuers (companies with business relationships with the Group) andby evaluating those relationships.
The Group has established policies which include maximum upper
limits and reporting obligations for derivative transactions and comply
fully with these guidelines. Derivative transactions are entered into by
the Company’s Accounting Department and certain consolidated
subsidiaries. The Company carries out mutual supervision andmonitoring of the derivative transactions in accordance withmanagement policies and its consolidated subsidiaries apply the same
approach. Each derivative transaction of the Company is reported to
the responsible director when entered into. The consolidated
subsidiaries are required to report the status of their derivatives
transactions to the Company on a monthly basis and are also required

70

Consolidated
Financial Statements

Trade payables, notes and accounts payable, are due within one
year. Certain trade payables resulting from the import of raw
materials is denominated in foreign currencies. These are exposed tofluctuation risk of foreign currencies. However, the risk is mitigatedbecause the trade payables, notes and accounts payable
denominated in foreign currencies are within the range of accounts
receivable which are denominated in the same currencies.

exchange contracts and interest rate swap agreements for the year
ended March 31, 2011. Refer to “(n) Derivative financial instruments
and hedging activities” in Note 2. “Summary of Significant
Accounting Policies.”

Notes to Consolidated Financial Statements
March 31, 2011

to consult with the Company when they enter into derivativetransactions other than forward foreign currency exchange contracts.
(iii) Monitoring of liquidity risk (the risk that the Group may not be able
to meet its obligations on scheduled due dates)
The Group manages liquidity risk with the responsible section
preparing and updating cash flow plans and keeping necessary
funds based on reports of each section.
Syndicated loans have certain financial covenants that represent aliquidity risk from an early repayment request by financial institutions.

(iv) Supplementary explanation of the fair value of financial instruments
The fair value of financial instruments is based on their quoted market
price, if available. When there is no quoted market price available, fairvalue is reasonably estimated. Since various assumptions and factors
are reflected in estimating the fair value, different assumptions andfactors could result in different fair value. In addition, the notionalamounts of derivatives in Note 14 “Derivative Financial Instruments
and Hedging Activities” are not necessarily indicative of the actual
market risk involved in the derivative transactions.

Fair Value of Financial Instruments
The carrying value of financial instruments on the consolidated balance sheets, fair value and the difference as of March 31, 2011 and 2010, areshown in the following table. The table does not include financial instruments for which it is extremely difficult to determine the fair value. (Pleaserefer to Note 2 below).
Millions of yen
Carrying value

2011
Fair value

Difference

Carrying value

2010
Fair value

Difference¥ 40,082
1,334
109,722
23,402¥ 40,082
1,334
109,722
23,406¥–––4¥ 32,759
1,874
100,667
25,737¥ 32,759
1,874
100,667
25,740

¥–
–
–
3

305
¥ 174,845
110,206
95,581
18,656
3,743
109,048¥ 337,234¥ (270)305¥ 174,849
110,206
95,581
18,656
3,743
110,065¥ 338,251¥ (270)

–
¥4
–
–
–
–
1,017
¥ 1,017¥–304¥ 161,341
90,207
110,407
26,732
2,637
94,500¥ 324,483¥ (269)304¥ 161,344
90,207
110,407
26,744
2,637
95,851¥ 325,846¥ (269)

–
¥3
–
–
12
–
1,351
¥ 1,363¥–(1) Cash and cash equivalents(2) Short-term investments(3) Trade receivables(4) Investment securities(5) Short-term loans receivable included
in other current assets
Total assets(6) Trade payables(7) Short-term bank loans(8) Current portion of long-term debt
(9) Accrued income taxes(10)Long-term debt
Total liabilities
Derivative transactions (*)

Thousands of U.S. dollars
2011
Carrying value
Fair value
Difference(1) Cash and cash equivalents(2) Short-term investments(3) Trade receivables(4) Investment securities(5) Short-term loans receivable included
in other current assets
Total assets(6) Trade payables(7) Short-term bank loans(8) Current portion of long-term debt
(9) Accrued income taxes(10)Long-term debt
Total liabilities
Derivative transactions (*)$ 482,044
16,043
1,319,567
281,444$ 482,044
16,043
1,319,567
281,492

$–
–
–
48

3,668
$ 2,102,766
1,325,388
1,149,501
224,366
45,015
1,311,461$ 4,055,731$ (3,247)

3,668$ 2,102,814
1,325,388
1,149,501
224,366
45,015
1,323,692$ 4,067,962$ (3,247)

–
$ 48
–
–
–
–
12,231$ 12,231$–* Assets and liabilities arising from derivative transactions are shown at net value with the amount in parentheses representing net liability position.
Note 1: Methods to determine the fair value of financial instruments and other matters related to securities and derivative transactions(1) Cash and cash equivalents, (2) Short-term investments, (3) Trade receivables and (5) Short-term loans receivable included in other current assets
Since these items are settled in a short time period, their carrying value approximates fair value.
(4) Investment securities
The fair value of stocks is based on quoted market prices.
(6) Trade payables, (7) Short-term bank loans and (9) Accrued income taxes
Since these items are settled in a short time period, their carrying value approximates fair value.
(8) Current portion of long-term debt and (10) Long-term debt
Long-term debt is composed of long-term loans and corporate bonds. The fair market value of corporate bonds is based on quoted market prices. The fair value of long-term debt isbased on the present value of the total of principal and interest discounted by the interest rate to be applied assuming new loans under the similar conditions to existing loans are made.
Floating interest rates for certain long-term loans were hedged by interest rate swap agreements and accounted for as loans with fixed interest rates. The fair value of those long-term loans
is based on the present value of the total of principals, interests and net cash flows of the swap agreements discounted by the interest rates to be applied assuming new loans undersimilar conditions are made.
Derivative Transactions
Please refer to Note 14 “Derivative Financial Instruments and Hedging Activities” section of these Notes to Consolidated Financial Statements.
Note 2: Financial instruments for which it is extremely difficult to determine the fair value were as follows:71Thousands of
U.S. dollars
2011

Millions of yen
2011
2010

Unlisted stocks
Stocks of subsidiaries and affiliates
Other
Unlisted foreign bonds
Unlisted domestic bonds
Total¥ 10,768
579
2,516
1,000
¥ 14,863$ 129,501
6,963
30,25912,026$ 178,749¥ 10,976
677
2,516
1,000
¥ 15,169

Because no quoted market price is available and it is extremely difficult to determine the fair value, the above financial instruments are not includedin the preceding table.
Note 3: Redemption schedule for receivables and marketable securities with maturities at March 31, 2011 and 2010 is as follows:

Withinone year¥ 40,082
1,334
109,722305¥ 151,443

Cash and cash equivalents
Short-term investments
Trade receivables
Short-term loans receivable included in other current assets
Total

Withinone year

Cash and cash equivalents
Short-term investments
Trade receivables
Short-term loans receivable included in other current assets
Total¥ 32,759
1,874
100,667304¥ 135,604

Withinone year

Cash and cash equivalents
Short-term investments
Trade receivables
Short-term loans receivable included in other current assets
Total$ 482,044
16,043
1,319,567
3,668$ 1,821,322

Millions of yen
2011
More than one year
More than five years
and within five years
and within ten years

¥–
–
–
–
¥–

¥–
–
–
–
¥–

¥–
–
–
–
¥–

Millions of yen
2010
More than one year
More than five years
and within five years
and within ten years

¥–
–
–
–
¥–

More thanten years

¥–
–
–
–
¥–

¥–
–
–
–
¥–

Thousands of U.S. dollars
2011
More than one year
More than five years
and within five years
and within ten years

$–
–
–
–
$–

More thanten years

More thanten years

$–
–
–
–
$–

$–
–
–
–
$–

Note 4: The redemption schedule for long-term debt is disclosed in Note 7 “Short-Term Bank Loans and Long-Term Debt” section of these Notes to Consolidated Financial Statements.

14. Derivative Financial Instruments and Hedging Activities(a) Derivative transactions to which hedge accounting is not applied
The estimated fair value of the derivatives positions outstanding which do not qualify for deferral hedge accounting at March 31, 2011 and 2010 issummarized as follows:

Currency-related transactions

Classification

Over-the-counter transactions

Transaction

Notional amount

Fair value

Consolidated
Financial Statements

Millions of yen
2011
Valuation gain
(loss)

Forward foreign currency exchange contracts
Selling:
Euro
U.S. Dollars
Thai Baht
Canadian Dollars
British Pounds¥ 6,795
4,734
1,513
311
153

¥ (240)
(5)
(19)
(6)
0

¥ (240)
(5)
(19)
(6)
0

Buying:Yen
U.S. Dollars
Total

867
750
¥ 15,123(6)
6¥ (270)(6)
6¥ (270)72Notes to Consolidated Financial Statements
March 31, 2011

Millions of yen
2010
Classification

Transaction

Notional amount

Forward foreign currency exchange contracts
Selling:
U.S. Dollars
Euro
Thai Baht
Canadian Dollars
British Pounds
TotalOver-the-counter transactions

Classification¥ (230)
166
(81)
(14)
0
¥ (159)Valuation gain
(loss)¥ (230)
166
(81)
(14)
0
¥ (159)Thousands of U.S. dollars
2011
Valuation gain
Notional amount
Fair value(loss)

Transaction

Over-the-counter transactions¥ 10,963
5,586
1,763
378
154
¥ 18,844

Fair value

Forward foreign currency exchange contracts
Selling:
Euro
U.S. Dollars
Thai Baht
Canadian Dollars
British Pounds$ 81,720
56,93318,1963,740
1,840$ (2,886)
(60)
(229)
(72)
0

$ (2,886)
(60)
(229)
(72)
0

Buying:Yen
U.S. Dollars
Total

10,4279,020$ 181,876(72)
72$ (3,247)(72)
72$ (3,247)

The fair value of forward foreign currency exchange contracts are computed using prices provided by counterparty financial institutions. There areno contracts to be settled after one year.

(b) Derivative transactions to which hedge accounting is applied
The estimated fair value of the derivatives positions outstanding which qualify for deferral hedge accounting at March 31, 2010 is summarized asfollows:

Currency-related transactions

Method of hedge accounting

Deferral hedge

Transaction

Major hedged item

Forward foreign currency exchange contracts
Buying:EURO
Total

Millions of yen
2010
Notional amount
Fair value

Investment in affiliates¥ 5,909¥ 5,909¥ (110)¥ (110)The fair value of forward foreign currency exchange contracts are computed using prices provided by counterparty financial institutions. There areno contracts to be settled after one year.

Interest-rate related transactions

Method of hedge accounting

Swap rates applied to underlying debt

Method of hedge accounting

Swap rates applied to underlying debt

73

Transaction

Interest rate swaps
Receive / floating and pay / fixed
Total

Transaction

Interest rate swaps
Receive / floating and pay / fixed
Total

Millions of yen
2011
Contractual value
More than
Notional amount
one year¥ 30,000¥ 30,000Fair value¥ 28,000¥ 28,000(*)(*)

Millions of yen
2010
Contractual value
More than
Notional amount
one year

Fair value¥ 20,000¥ 20,000¥ 20,000¥ 20,000(*)(*)

Method of hedge accounting

Swap rates applied to underlying debt

Transaction

Interest rate swaps
Receive / floating and pay / fixed
Total

Thousands of U.S. dollars
2011
Contractual value
More than
Notional amount
one year
Fair value$ 360,794$ 360,794$ 336,741$ 336,741(*)(*)* Because interest rate swap agreements are accounted for applying swap rates to underlying long-term debt, their fair value is included in that oflong-term debt disclosed in Note 13.

15. Research and Development Costs
Research and development costs included in cost of sales and selling, general and administrative expenses totalled ¥15,697 million ($188,779
thousand) and ¥14,688 million for the years ended March 31, 2011 and 2010, respectively.

16. Provision of Reserve for Product Defect Compensation
The Company encountered some quality-control issues related to certain products and provided a reserve of ¥401 million ($4,823 thousand) for
the year ended March 31, 2011, which was presented as a component of other expenses in the accompanying consolidated statement ofoperations for the year.

17. Gain on Allocation of Shares
The Company received on allocation of shares issued by Dai-ichi Life Insurance Company, Limited in exchange for its management participantrights in mutual insurance company subsequent to Dai-ichi’s demutualization. As a result, the Company recorded a gain on allocation of shares of¥298 million ($3,584 thousand) for the year ended March 31, 2011.

18. Loss Resulting from Low Operating Volume
The Company recorded a loss resulting from low operating volume of ¥812 million ($9,765 thousand) for the year ended March 31, 2011. The
consolidated subsidiaries experienced abnormally lower operating volumes and recorded related loss.

19. Loss on Earthquake
During the year ended March 31, 2011, the Company and its domestic subsidiaries suffered losses related to the Great East Japan Earthquake on
March 11, 2011.
Loss on earthquake for the year ended March 31, 2011 consisted of the following:

Fixed costs incurred during the period of the suspended operation
Donation
OthersMillions of yen
2011

Thousands of
U.S. dollars
2011

¥ 418
100
20
¥ 538

$ 5,0271,203
240$ 6,470

20. Reorganization Expenses
Reorganization expenses for the year ended March 31, 2010 consisted of the following:

Loss on disposal of fixed assets
Relocation expenses of equipment

Consolidated
Financial Statements

Millions of yen
2010

¥ 131
11
¥ 142

21. Loss on Liquidation of a Subsidiary
On December 25, 2009, the Company’s Board of Directors’ meeting approved the liquidation of a consolidated subsidiary, NTN-BCA CORP. The
Company has recorded related losses as loss on liquidation of a subsidiary of ¥1,183 million in the consolidated statement of operations for theyear ended March 31, 2010.

22. Closure of TAKARAZUKA Works
Upon the completion of the transfer of manufacturing activities at TAKARAZUKA Works to other factories, the Company ceased the operation of
the TAKARAZUKA Works at the end of March 2009 and closed it in July 2009. Although the Company had planned to sell the site after soil
improvement work, the Company did not recognize any gain or loss on this land for the years ended March 31, 2011 and 2010 because theCompany could not estimate it reasonably.

74Notes to Consolidated Financial Statements
March 31, 2011

23. Income Taxes
Income taxes applicable to the Company and its domestic subsidiaries comprise corporate tax, inhabitants’ taxes and enterprise tax which, in theaggregate, resulted in a statutory tax rate of 40.0% for the years ended March 31, 2011 and 2010. Overseas subsidiaries are subject to theincome taxes of the respective countries in which they operate.
The effective tax rate for the year ended March 31, 2011 differs from the Company’s statutory tax rate for the following reasons:
2011

40.0%
0.7
(2.5)
3.4
(0.9)
(6.9)
(5.9)
(2.3)
4.4
30.0%

Statutory tax rate
Permanent non-deductible expenses
Permanent non-taxable income
Elimination of dividend income
Equity in earnings of affiliates
Difference in overseas consolidated subsidiaries’ applicable tax rate
Decrease in valuation allowance
Negative goodwill
Other
Effective tax rate

The details of the differences between the statutory tax rate and effective tax rate for the year ended March 31, 2010 is omitted because theCompany and consolidated subsidiaries recorded a loss before income taxes and minority interests for the year.
The tax effects of temporary differences which gave rise to significant portions of the deferred tax assets and liabilities at March 31, 2011 and 2010
are presented below:
Millions of yen
2011
2010

Thousands of
U.S. dollars
2011

Deferred tax assets:
Accrued retirement benefits for employees
Inventories
Tax loss carryforwards
Reserve for product defect compensation
Accrued expenses
Foreign tax credit
Accrued expenses for a defined contribution pension plan
Other
Gross deferred tax assets
Less: valuation allowance
Total deferred tax assets¥ 14,380
395
16,059
179
2,993
2,130
1,446
7,303
44,885(6,756)38,129¥ 13,829
1,009
16,785
536
3,027
1,892
2,080
6,245
45,403(8,253)37,150$ 172,940
4,750
193,133
2,153
35,99525,616
17,39087,831
539,808(81,251)458,557

Deferred tax liabilities:
Depreciation and amortization
Unrealized holding gain on securities
Reserve for deferred gain on property included in retained earnings
Retained earnings of overseas consolidated subsidiaries
Other
Total deferred tax liabilities
Net deferred tax assets(7,562)(1,419)(387)(185)(2,312)(11,865)¥ 26,264(8,423)(2,414)
(393)
(117)
(716)
(12,063)¥ 25,087(90,944)(17,066)(4,654)(2,225)(27,805)(142,694)$ 315,863

24. Amounts per Share
Amounts per share at March 31, 2011 and 2010 and for the years then ended were as follows:Yen

Net assets
Net income (loss):
Basic
Cash dividends

2011

2010

U.S. dollars
2011¥ 376.05¥ 374.19$ 4.52

27.08
10.00

(4.00)
8.00

0.33
0.12

Amounts per share of net assets are computed based on the number of shares of common stock outstanding at the year end.
Basic net income or loss per share is computed based on the net income or loss attributable to shareholders of common stock and theweighted-average number of shares of common stock outstanding during the year. Diluted net income per share has not been presented because
there are no potentially dilutive shares of common stock outstanding for the years ended March 31, 2011 and 2010.
Cash dividends per share represent the cash dividends proposed by the Board of Directors as applicable to the respective years together with theinterim cash dividends paid.

7525. Supplementary Cash Flow Information
The assets and liabilities of NTN-NIDEC (THAILAND) CO., LTD. and NTN-NIDEC (ZHEJIANG) CORPORATION at the time they were excluded fromthe scope of consolidation during the year ended March 31, 2010 because of the Company’s sales of investments in these subsidiaries, related
sales value and proceeds from sales of investments are summarized as follows:
Millions of yen
2010¥ 4,157
4,288(4,923)(2)(1,408)
723
2,835
(414)
¥ 2,421

Current assets
Fixed assets
Current liabilities
Long-term liabilities
Minority interests
Gain on sales of investments in subsidiaries
Sales value of investments in subsidiaries
Cash and cash equivalents of sold subsidiaries
Proceeds from sales of investments in subsidiaries

26. Segment Information
Effective April 1, 2010, the Company adopted the “Accounting Standard for Disclosures about Segments of an Enterprise and Related Information”(ASBJ Statement No.17, issued on March 27, 2009) and “Guidance on Accounting Standard for Disclosures about Segments of an Enterprise andRelated Information” (ASBJ Guidance No.20, issued on March 21, 2008).

(a) Segment Information for the Year ended March 31, 2011
1. Outline of reporting segments
The Group’s reporting segments are divisions of the Group for which separate financial information is available, and whose operating results arereviewed regularly by the highest management decision-making body (Board of Directors meeting of the Company) in order to allocate
management resources and assess performance of operations.
The Group’s main business lines consist of the manufacture and sales of bearings, constant-velocity joints (CVJs) and precision equipments for the
automotive market, general industrial machinery market, and distribution and aftermarket. Business activities in Japan are controlled by theCompany (Head Office), and overseas business activities are controlled by the General Manager responsible in each region. Business entities ineach region prepare their own plans and strategies to conduct business activities while analyzing profitability and the investment efficiency ofoperations.
Accordingly, the Group has four reporting segments based on geographic business segmentation controlled by the Head Office or General
Managers: Japan, the Americas, Europe, and Asia and other areas. Each reporting segment engages in manufacture and sale of bearings,
constant-velocity joints (CVJs), and precision equipment and other products.
2. Calculation methods used for net sales, income, assets, liabilities and other items on each reporting segment.
The accounting policies of the segments are substantially the same as those described in the significant accounting policies in Note 2.
Inter-segment sales and transfer are recorded at the same prices used in transactions with third parties.
3. Information as to net sales, income, assets, liabilities, and other items for each reporting segment.
Millions of yen
2011
Reporting segments
Japan

Americas

EuropeAsia andother areas

Total

Adjustments(Note)

Consolidated¥ 201,276¥ 111,625¥ 140,614¥ 76,541¥ 530,056¥–¥ 530,056

118,346
319,622¥ 8,009¥ 450,135¥ 293,324

2,867
114,492¥ 2,909¥ 109,060¥ 70,593

3,379
143,993¥ 5,957¥ 119,706¥ 68,358

6,032
82,573¥ 6,808¥ 74,863¥ 34,283

130,624
660,680¥ 23,683¥ 753,764¥ 466,558(130,624)(130,624)¥ 877¥ (121,763)¥ (44,910)–
530,056¥ 24,560¥ 632,001¥ 421,648

Other items:
Depreciation and amortization
Capital expenditures¥ 21,764¥ 12,008¥ 6,117¥ 8,097¥ 5,072¥ 4,600¥ 2,983¥ 5,578¥ 35,936¥ 30,283¥–¥ (55)¥ 35,936¥ 30,228

Consolidated
Financial Statements

Sales, income andassets or liabilities byreporting segments:
Net sales:
Sales to third parties
Inter-segment sales
and transfers
Total
Segment income
Segment assets
Segment liabilities

76

Notes to Consolidated Financial Statements
March 31, 2011

Sales, income andassets or liabilities byreporting segments:
Net sales:
Sales to third parties
Inter-segment sales
and transfers
Total
Segment income
Segment assets
Segment liabilities

Thousands of U.S. dollars
2011
Reporting segments
Asia andEuropeother areas

Adjustments(Note)

Consolidated$ 6,374,696$–$ 6,374,696

72,544
993,061$ 81,876$ 900,337$412,303

1,570,944
7,945,640$ 284,823$ 9,065,111$ 5,611,040(1,570,944)(1,570,944)$ 10,547$ (1,464,377)$ (540,108)–
6,374,696$ 295,370$ 7,600,734$ 5,070,932$ 35,875$ 67,084$ 432,183$ 364,197$–$ (661)$ 432,183$ 363,536

Japan

Americas$ 2,420,638$ 1,342,453$ 1,691,088$ 920,517

1,423,283
3,843,921$ 96,320$ 5,413,529$ 3,527,648

34,4801,376,933$ 34,985$ 1,311,606$ 848,984

40,637
1,731,725$ 71,642$ 1,439,639$ 822,105$ 261,744$ 144,413$ 73,566$ 97,378$ 60,998$ 55,322

Other items:
Depreciation and amortization
Capital expenditures

Total

Note: Other than segment assets, adjustments are the elimination of inter-segment transactions. The adjustments for segment assets consist of inter-segment elimination of ¥157,270 million($1,891,401 thousand) and the corporate assets of the group of ¥35,507 million ($427,023 thousand). The corporate assets are the investments held by the Company, mainly cash and cash
equivalents and investment securities.

4. Related information(1) Sales by products and service
The sales by products and service, classified by the similarity of the market for the year ended March 31, 2011 is summarized as follows:

Automotive¥ 344,408

Sale to third parties

Automotive$ 4,142,008

Sale to third parties

Millions of yen
2011
Industrial
Repair andmachineryaftermarket¥ 99,451¥ 86,197

Thousands of U.S. dollars
2011
Industrial
Repair andmachineryaftermarket$ 1,196,043$ 1,036,645

Total¥ 530,056

Total$ 6,374,696(2) Regional information(a) Sales
Sales categorized by countries and regions based on locations of customers within the group for the year ended March 31, 2011 is summarized as follows:
Millions of yen
2011
Japan

Americas

Europe¥ 186,595¥ 117,985¥ 132,814

Asia andother areas¥ 92,662

Total¥ 530,056

Thousands of U.S. dollars
2011
Japan

Americas

EuropeAsia andother areas

Total$ 2,244,076$ 1,418,942$ 1,597,282$ 1,114,396$ 6,374,696“Americas” includes U.S.A., Canada and Central and South America. Europe includes Germany, France, U.K. and others. Asia and other areas
include China, Thailand, India and others. The sales of the “Americas” segment above contain the sales to U.S.A. of ¥100,437 million($1,207,901 thousand).
(b) Property, plant and equipment
Millions of yen
2011
Japan

¥ 133,821

Americas

Europe¥ 52,524¥ 37,218

Asia andother areas¥ 22,569

Total¥ 246,132

Thousands of U.S. dollars
2011
Japan

Americas

EuropeAsia andother areas

Total$ 1,609,392$ 631,678$ 447,601$ 271,425$ 2,960,096

1. Property, plant and equipment in “Americas” in the amount of ¥46,373 million ($557,703 thousand) is located in the U.S.A.
2. Property, plant and equipment of “Europe” in the amount of ¥31,387 million ($377,474 thousand) is located in France.

77

5. Significant gain on recognition of negative goodwill
The Company increased its ownership in S.N.R. ROULEMENTS, a consolidated subsidiary, to 80% by acquiring an additional 29% ownershipinterest on April 22, 2010. This resulted in a gain on recognition of negative goodwill recorded in the “Japan” segment. The amount was ¥1,203
million ($14,468 thousand), which are included in the component of gain on recognition of negative goodwill in consolidated statement of income
for the year ended March 31, 2011.

(b) Segment information for the year ended March 31, 2010
The Company and its consolidated subsidiaries are primarily engaged in the manufacture and sale of bearings, CVJ and precision equipment. As morethan 90% of the consolidated net sales and operating income for the year ended March 31, 2010 was made and more than 90% of the consolidated
total assets was held in the machinery and equipment parts segment, the disclosure of business segment information has been omitted.
Segment information by geographic area for the year ended March 31, 2010 is summarized as follows:
Millions of yen
2010
Reporting segments

External sales
Intersegment sales
Net sales
Operating expenses
Operating (loss) income
Total assets

Asia andother areas

Japan

Americas

Europe¥ 166,818
84,736
251,554263,213¥ (11,659)¥ 430,145¥ 86,819
2,187
89,00688,299¥ 707¥ 107,569¥ 134,247
2,749
136,996
132,889¥ 4,107¥ 115,776¥ 64,862
5,104
69,96662,800¥ 7,166¥ 63,325

Total¥ 452,746
94,776
547,522547,201¥ 321¥ 716,815

Eliminations or
corporate

Consolidated¥–(94,776)(94,776)(95,854)¥ 1,078¥ (98,013)¥ 452,746–
452,746
451,347¥ 1,399¥ 618,802

Overseas sales, which include export sales of the Company and its domestic consolidated subsidiaries and sales (other than exports to Japan) of
the overseas consolidated subsidiaries, for the year ended March 31, 2010 is summarized as follows:

Americas

Overseas sales
Consolidated net sales
Overseas sales as a percentage of consolidated net sales

27. Business Combination
1. Company name and business description of acquiredcompany, legal description of business combination, tradename after business combination and main purpose forbusiness combination(1) Company name and business description of acquired company
Acquired company: S.N.R. ROULEMENTS
Business description: Manufacture and sale of automotive, industrial
machinery, aerospace related products(2) Date of the business combination
April 22, 2010
(3) Legal description of business combination
Acquisition of shares from the minority shareholder(5) Main purpose for business combination
The Company additionally acquired 29% of the shares of S.N.R.
ROULEMENTS to expand its business in Europe and to enforce theconsolidation group management. As a result of the acquisition, theCompany owned 80% of its shares.

19.9%¥ 127,068
28.1%¥ 79,297
17.5%

Total

¥ 296,382
452,746
65.5%

2. Overview of accounting treatment applied
The acquisition of the shares was accounted for as transaction undercommon control in accordance with “Accounting Standard forBusiness Combinations” (ASBJ Statement No.21 issued on
December 26, 2008) and the “Guidance on Accounting Standard forBusiness Combinations and Accounting Standard for Business
Divestitures” (ASBJ Guidance No.10 issued on December 26, 2008.)

3. Matters related to additional acquisition of thesubsidiary’s shares(1) Acquisition cost of acquired company
Acquisition cost in cash and cash equivalents: ¥5,908 million($71,052 thousand)(2) Amount of gain on negative goodwill and reason(a) Amount of recognized negative goodwill ¥1,203 million ($14,468
thousand), which are included in the component of gain on
recognition of negative goodwill in consolidated statement of income
for the year ended March 31, 2011.
(b) Reason for the negative goodwill
Negative goodwill was recognized since the cost of additional
acquisition was less than the amount of decrease in minority interest.

28. Subsequent Event
The following distribution of retained earnings of the Company, which has not been reflected in the accompanying consolidated financial
statements for the year ended March 31, 2011, was approved at the annual general meeting of the shareholders held on June 24, 2011:

Year-end cash dividends (¥5.0 (U.S.$0.06) per share)

Millions of yen

Thousands of
U.S. dollars¥ 2,658$ 31,966

78

Consolidated
Financial Statements(4) Company name of acquired company after business combination
NTN-SNR ROULEMENTS (Changed its name from S.N.R.
ROULEMENTS in July 2010)¥ 90,017

Millions of yen
2010
Asia andEuropeother areas

Report of Independent Auditors

79

NTN’s Global Network
As of March 31, 2011

JAPAN

THE AMERICASHead Office
3-17, 1-chome, Kyomachibori, Nishi-ku,
Osaka 550-0003, JapanNTN Powder Metal Corp.
101 Katsutaba, Kanieshinden, Kanie-cho,Ama-gun, Aichi 497-8541, Japan

Automotive Business Headquarters
1578 Higashi-Kaizuka, Iwata-shi, Shizuoka
438-8510, JapanNTN Mikumo Company Ltd.
750-1 Onoe, Matsusaka-shi,Mie 515-2109, Japan

Industrial Business Headquarters
3066 Aza-Oyumida, Oaza-Higashikata,
Kuwana-shi, Mie 511-8678, JapanNTN Casting Corp.
475-1, Nadabun-cho, Izumo-shi,
Shimane 691-0003, Japan

Precision Equipment Division
1578 Higashi-Kaizuka, Iwata-shi, Shizuoka
438-8510, JapanNTN Kinan Corp.
2504-1 Ikuma, Kamitonda-cho, Nishimuro-gun,
Wakayama 649-2103, Japan

Composite Material Product Division
101 Katsutaba, Kanieshinden, Kanie-cho,Ama-gun, Aichi 497-8541, Japan

Hikari Seiki Industry Co., Ltd.
8 Motohigashikata, Sanmaiden-cho, Tenri-shi,
Nara 632-0046, JapanEV Systems Division
1578 Higashi-Kaizuka, Iwata-shi, Shizuoka
438-8510, JapanNTN Mie Corp.
3601-25 Mizono, Tado-cho, Kuwana-shi,Mie 511-0118, JapanSales
NTN Bearing Service Co., Ltd.
1-13, 3-chome, Shibakoen, Minato-ku,
Tokyo 108-0074, JapanNTN Omaezaki Corp.
4681-3, Sakura, Omaezaki-shi,
Shizuoka 437-1604, Japan

Manufacturing
Kuwana Works
2454 Aza-Tsuchijima, Oaza-Higashikata,
Kuwana-shi, Mie 511-8678, Japan
Iwata Works
1578 Higashi-Kaizuka, Iwata-shi,
Shizuoka 438-8510, Japan
Okayama Works
500-1 Hatakeda, Bizen-shi,
Okayama 705-8510, Japan
Nagano Works
14017-11 Oaza-Nakaminowa, Minowa-machi,
Kamiina-gun, Nagano 399-4601, Japan
Fluid Dynamic Bearing Unit Plant
101 Katsutaba, Kanieshinden, Kanie-cho,Ama-gun, Aichi 497-8541, JapanNTN Kongo Corp.
3-13, 1-chome, Kidonishi-cho,
Kawachinagano-shi, Osaka 586-0009, JapanNTN Fukuroi Corp.
1959 Midori, Fukuroi-shi,
Shizuoka 437-0005, JapanNTN Hakui Corp.
32 Mitsuya-machi, Hakui-shi,Ishikawa 925-0024, JapanNTN Houdatsushimizu Corp.
1-1 Futakuti-ho, Houdatsushimizu-cho,Hakui-gun, Ishikawa 929-1421, JapanNTN Bizen Corp.
2139-2 Yamaguchi, Akaiwa-shi,
Okayama 701-2225, JapanNTN Tado Corp.
1077 Yui, Tado-cho, Kuwana-shi,Mie 511-0101, JapanNTN Shika Corp.
5-58-2 Horimatsu, Shika-machi, Hakui-gun,Ishikawa 925-0157, JapanSales
NTN Bearing Corp. of America
1600 E. Bishop Court, P.O. Box 7604,
Mount Prospect, IL 60056-7604, U.S.A.
NTN Bearing Corp. of Canada Ltd.
305 Courtneypark Drive West, Mississauga,
Ontario, L5W 1Y4, Canada
NTN-Sudamericana, S.A.
World Trade Center Panama
Calle 53 Este, Urbanización Marbella Piso
NO.16, Oficina 1601 Apartado Postal
832-0487, Panamá, Rep.de Panamá
NTN de Mexico, S.A.
Emilio cárdenas No.158 Apdo.124,
C.P. 54030, Tlalnepantla, Edo de México,
MéxicoNTN do Brasil Ltda.
Av. Moema, 94-9° Andar-conj, 92193 CEP
04077-020, Indianópolis, São Paulo, Brasil
Manufacturing
American NTN Bearing Mfg. Corp.
Elgin Plant
1500 Holmes Road, Elgin, IL 60123, U.S.A.
Schiller Park Plant
9515 Winona Avenue, Schiller Park, IL 60176,
U.S.A.
NTN-Bower Corp.
Macomb Plant
711 North Bower Road, Macomb, IL
61455-2511 U.S.A.
Hamilton Plant
2086 Military Street South, Hamilton, AL 35570,
U.S.A.
NTN Driveshaft, Inc.
8251 South International Drive Columbus,
IN 47201 U.S.A.
NTK Precision Axle Corp.
741 South County Rd 200 West, Frankfort
IN 46041, U.S.A.
Asahi Forge of America Corp.
5030 Corporate Way Richmond, Kentucky
40475 U.S.A.

Consolidated
Financial Statements

NTN Engineering Plastics Corp.
970 Oaza Ano, Toin-cho, Inabe-gun,Mie 511-0243, JapanNTN Kamiina Corp.
522-2 Oaza-Nakasone, Minowa-machi,
Kamiina-gun, Nagano 399-4605, Japan

Holding Company
NTN USA Corp.
1600 E. Bishop Court, P.O. Box 7604,
Mount Prospect, IL 60056-7604, U.S.A.

80

NTN’s Global Network
As of March 31, 2011

THE AMERICASNTA Precision Axle Corp.
795 Kimberly Drive, Carol Stream, IL U.S.A.
Seohan-NTN Driveshaft USA Corp.
264 Teague Court, Auburn, AL 36832, U.S.A.
NTN Bearing Mfg. Canada(A Div. of NTN Bearing Corp. of
Canada Ltd.)
6740 Kitimat Road, Mississauga,
Ontario, L5N 1M6, Canada
NTN do Brasil Produção de Semi-Eixos Ltda.
Estrada Municipal, 400 Bairro Jardim SantoAfonso, CEP 07215-040, Guarulhos, SãoPaulo, Brasil

EUROPEASIA AND OTHERSSales
NTN Bearing-Singapore (Pte) Ltd.
No.9 Clementi Loop Singapore 129812
NTN Bearing Thailand Co., Ltd.
12th Floor, Panjathani Tower, 127/15
Nonsee Road, Chongnonsee Yannawa,
Bangkok 10120, Thailand
NTN Bearing-Malaysia Sdn. Bhd.
No.2, Jalan Arkitek U 1/22,Section U1, Hicom
Glenmarie Industrial Park,40150 Shah Alam,
Selangor Darul Ehsan, Malaysia
NTN Korea Co., Ltd.
10th Floor, Press Center, 25, Taepyeong-Ro
1-GA, Jung-Gu, Seoul 100-745, Korea
NTN-CBC (Australia) Pty. Ltd.
3, The Crescent, Kingsgrove, NSW 2208,
Australia

Sales
NTN Wälzlager (Europa) GmbH
Max-Planck-Strasse 23, 40699 Erkrath,
F.R. Germany

PT. NTN BEARING INDONESIA
Summitmas 1., 18th Floor, Jl. Jend. Sudirman
Kav. 61-62, Jakarta 12190, Indonesia

NTN Bearings (UK) Ltd.
Wellington Crescent, Fradley Park,
Lichfield, Staffordshire, WS13 8RZ, U.K.

Manufacturing
NTN Manufacturing (Thailand) Co., Ltd.
111/2 Moo 4,Tambol Pluakdaeng,
Amphur Pluakdaeng, Rayong 21140, Thailand

SNR ROULEMENTS
1, rue des Usines BP2017, 74010 Annecy,
FranceTung Pei Industrial Co., Ltd.
10th Floor No.142, Chung Hsiao E.Rd., Sec. 4,
Taipei, Taiwan.

SNR Wälzlager GmbH
Düesseldorf Branch
Max-Plank-Str. 23, 40699 Erkrath,
F.R. Germany
SNR Italia
Via Riccardo Lombardi, 19/4 20153 Milan, Italy

Taoyuan Plant
600 Sec. 1, Chieh-Shou Road, Pa-te City,
Taoyuan Hsien, Taiwan
Chungli Plant
No.7 Songjiang N. Rd., Jhongli City, Taoyuan
County 320, Taiwan

SNR Rodamientos Iberica S.A.
Calle Barberán N°6, 28035 Madrid, Spain

Taiway Ltd.
14, Kwang Fu Road, Hsinchu IND. Park,
Hukou 303, Hsianchu, Taiwan

Manufacturing
NTN Kugellagerfabrik (Deutschland) GmbHNTN Strasse 1-3, 40822 Mettmann,
F.R. Germany

Unidrive Pty. Ltd.
45-49 McNaughton Road, Clayton,
Victoria 3168, Australia
P.O.Box 146 Clayton, Victoria 3168, Australia

NTN Transmissions Europe
Z.A. des Trémelières Communauté Urbaine duMans 72704 Allonnes Cedex, France

NTN NEI Manufacturing India Pvt. Ltd.
Plot No. 131, Sector-7, HSIIDC Growth Centre,
Bawal Distt. Rewari, Haryana 123501 India

NTN Transmissions Europe Crézancy
Route de Paris, 02650 Crézancy, France

Seohan-NTN Bearing Co., Ltd.
1084-4 Yongmyeong-Ri, Geoncheon-Eup,
Gyeongju-Si, Gyeongsangbuk-Do, Korea
780-903

IFA-Antriebstechnik Gmbh
Buschstüeck Str. 6 39638 Gardelegen, F.R.
Germany

81

CHINA
Sales
NTN (CHINA) Investment Corp.
Shanghai Head Office
No.6 building No.1666 Nanle Road. Songjiang
Industrial Zone, Songjiang, Shanghai, China
NTN China Ltd.
Hong Kong Office
Room 1914-15, Park-In Commercial Centre,
56 Dundas Street, Mongkok, Kowloon, Hong
Kong
NTN-DONGPAI (Shanghai) Bearing Sales
Corp.
3F 195 NanSuzhou Road, Shanghai, China
Manufacturing
Shanghai NTN Corp.
No.1666, Nanle Road, Songjiang Industrial
Zone, Songjiang, Shanghai, China 201611
Guangzhou NTN-Yulon Drivetrain Co., Ltd.
No.11 Jun Da Road, East District ofGuangzhou Economic and Technological
Development Zone, Guangzhou, Guangdong
Province, China 510530
NTN-RAB (Changzhou) Corp.
No.200 Chuangxin Road (ELECTRONIC
INDUSTRRIAL PARK), Changzhou, 213031
China
Beijing NTN-Seohan Driveshaft Co., Ltd.
No.3 Zhengfu Road Opto-mechatronics
Industrial Park, Beijing, China 101111
Shanghai Tung Pei Enterprise Co., Ltd.
No. 601, Rongle RD.(E), Songjiang Industrial
Zone,Shanghai, China 201613
Nanjing Puzhen NTN Railway Bearing Co.,
Ltd.
No.5 Longhu Alley, Puzhen Town, Pukou
District, Nanjing City, Jiangsu, China 210031
Shanghai Laien Machine Tool Parts Corp.
10-2 Jinwen Road, Nanhui Area, Shanghai,
China 201323
NTN-LYC (Luoyang) Bearing Corp.
No.1 Zhangheng Street, Luoong TechnicalPark, Luolong District, Luoyang City, Henan
Province, China

NTN Group Investment Holdings
As of March 31, 2011

Paid-in
CapitalConsolidated Subsidiaries
Consolidated Subsidiaries
NTN BEARING SERVICE CO., LTD. ..........
NTN KONGO CORP. ................................
NTN ENGINEERING PLASTICS CORP. ....
NTN POWDER METAL CORP. ..................
NTN MIKUMO COMPANY LTD. ................
NTN CASTING CORP. ..............................
NTN KINAN CORP. ...................................
NTN MIE CORP. .......................................
NTN OMAEZAKI CORP. ............................
NTN KAMIINA CORP. ...............................
NTN FUKUROI CORP. ..............................
NTN HOUDATSUSHIMIZU CORP. ............
NTN USA CORP. ......................................
NTN BEARING CORP.OF AMERICA .........
NTN DRIVESHAFT, INC. ...........................
AMERICAN NTN BEARING MFG.CORP. ..
NTN-BOWER CORP. ................................
NTN-BCA CORP. ......................................
NTK PRECISION AXLE CORP. ..................
NTA PRECISION AXLE CORP. ..................
NTN BEARING CORP.OF
CANADA LTD. ........................................
NTN SUDAMERICANA, S.A. .....................
NTN do Brasil Producão de
Semi-Eixos Ltda. ....................................
NTN WÄLZLAGER (EUROPA) G.m.b.H. ....
NTN KUGELLAGERFABRIK(DEUTSCHLAND) G.m.b.H. ....................
NTE Gardelegen G.m.b.H. ........................
NTN BEARINGS (UK) LTD. .......................
NTN Transmissions Europe .......................
NTN TRANSMISSINONS EUROPE
CREZANCY ............................................
NTN-SNR ROULEMENTS ........................

Holding as
percentage (%)¥480,000,000¥1,000,000,000¥100,000,000¥400,000,000¥450,000,000¥450,000,000¥450,000,000¥3,000,000,000¥266,000,000¥725,000,000¥1,500,000,000¥1,250,000,000
US.$127,370,000
US.$24,700,000
US.$54,580,000
US.$24,330,000
US.$67,000,000
US.$16,000,000
US.$15,000,000
US.$10,000,000

100
100
100
100
100
100
100
100
97.4
80
100
100
100
100
100
100
100
100
60
87.5

Consolidated Subsidiaries

EURO18,500,000
EURO1,500,000
STG.£2,600,000
EURO76,531,592

100
100
100
100

EURO2,537,000 100
EURO11,359,542 82.3

Holding as
percentage (%)

NTN BEARING-SINGAPORE (PTE) LTD. ...
S.$36,000,000
NTN CHINA LTD. ......................................
HK.$2,500,000
NTN BEARING-THAILAND CO., LTD. ....... BAHT780,000,000
NTN MANUFACTURING(THAILAND) CO., LTD. ............................ BAHT1,311,000,000
NTN Manufacturing India Private LTD. ...... INR1,275,000,000
NTN BEARING-MALAYSIA SDN.BHD. ......
M.$10,000,000
NTN KOREA CO., LTD. ............................
WON500,000,000
PT. NTN BEARING INDONESIA ................
US.$7,300,000
NTN (CHINA) INVESTMENTCORPORATION ......................................
US.$48,000,000
SHANGHAI NTN CORP. ...........................
US.$99,300,000
GUANGZHOU NTN-YULONDRIVETRAIN CO., LTD. ..........................
US.$12,500,000
CHANGZHOU NTN-GUANGYANG
CORP. ....................................................
US.$28,440,000

(100)
(100)
(100)
(100)
(100)
(60)
(87.5)

Affiliated Companies Accounted for by the Equity Method
TUNG PEI INDUSTRIAL CO., LTD. ........... NT.$1,257,232,620
TAIWAY LTD. ............................................
NT.$160,000,000
UNIDRIVE PTY. LTD. .................................
A.$5,000,000
BEIJING NTN-SEOHANDRIVESHAFT CO., LTD. .........................
US.$6,000,000
ASAHI FORGE OF AMERICA CORP. ........
US.$7,100,000
IFA-Antriebstechnik G.m.b.H. ...................
EURO50,000
Seohan-NTN Driveshaft USA CORP. .........
US.$6,000,000
Nanjing Puzhen NTN Railway
Bearing Co., Ltd. ....................................
US.$6,600,000
Seohan-NTN Bearing CO., LTD. ............... WON10,000,000,000

CAN.$20,100,000 100
US.$700,000 100
BRL35,420,000 100
EURO14,500,000 100

Paid-in
Capital(30)(0.04)

100
100
100

(0.969)(99.999)

99.999 (99.999)
90.196 (0.004)
60
(60)
100
100
(100)
100
95

(26.36)

60

(12)

100
27.35
36.25
40
40
28.2
25
49

(6.67)(28.2)

40
49

(40)

1. Of the above consolidated subsidiaries, NTN USA CORP., NTN DRIVESHAFT, INC.,
NTN-BOWER CORP., NTN TRANSMISSIONS EUROPE, and SHANGHAI NTN CORP.
are specified subsidiaries.
2. Figures in curved brackets under “Holding as percentage” indicate the percentage ofindirectly owned holdings, and are included in the total holding.

(100)

Investor Information
As of March 31, 2011

Head Office
NTN Corporation
3-17, 1-chome, Kyomachibori, Nishi-ku,
Osaka 550-0003, Japan

Investor Relations
CSR & Corporate Communications Dept.
Phone: +81-6-6449-3528
Fax: +81-6-6443-3226
E-mail: irmanager@ntn.co.jp

Shareholders by Category
Foreign Owners 20.11%

Financial Instruments Firms 2.28%

Individuals
15.42%

Financial Institutions
47.19%

Other Corporations
15.00%NTN on the Internet
NTN’s Website offers a variety of corporate
and product information, including the latest
annual report and financial results.
http://www.ntn.co.jp

Tokyo Stock Price Range
Stock Price (Yen)

Nikkei Stock Average (Yen)

25,000

Authorized 1,800,000,000 shares
Issued and outstanding 532,463,527 shares

750

20,000

Number of Shareholders (As of March 31, 2011)

500

15,000250

10,000Common Stock (As of March 31, 2011)

28,654

Transfer Agent for Common Stock
Mitsubishi UFJ Trust Banking Corporation
4-5, 1-chome, Marunouchi, Chiyoda-ku,
Tokyo 100-8212, Japan

0

Stock Exchange Listings

High

First Section of Tokyo Stock Exchange (#6472)
First Section of Osaka Securities Exchange (#6472)

Independent Accountants
Ernst & Young ShinNihon LLC

General Meeting of Shareholders
The General Meeting of Shareholders washeld on June 24, 2011 in Osaka

Stock Price Range in the Fiscal Year Ended
March 31, 2011
High: ¥473
Low: ¥312

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3
09
10
11
Low

Closing
Opening

Opening
Closing

5,000

Nikkei stock averageMonthly Volume Traded (Million Shares)
120
80
40
0

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3
09
10
11

82

Consolidated
Financial Statements

1,000

3-17, 1-chome, Kyomachibori,
Nishi-ku, Osaka 550-0003, Japan
http://www.ntn.co.jp

All of the electricity needed for the
printing and binding of this NTN Report
was generated with green power
generated at wind power facilities
in Japan. (See page 48 for details.)

This report was printed with anenvironment-friendly printing method
using vegetable inks. Vegetable inks
have excellent biodegradability, andprinted matter printed with vegetable
inks is easy to recycle.