NTN Report2015
for the year ended
March 31, 2015

NTN Corporation

The NTN Group provides originaltechnologies and services for various
types of machinery to support the
global industry and lifestyle.

Corporate Philosophy“We shall contribute to international society through creating
new technologies and developing new products.”
For New Technology Network
1. Creation of original technologies.
2. Offering the technologies for additional values and service that are suitable for eachcustomer and end user.
3. Improvement of employees’ standard of living, distribution of fair returns to stockholders, andcontribution 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.

11

Technical training

Visiting customers withtechnical service units aroundthe world

Aftermarket
Applications

MRO (Maintenance, Repair,and Overhaul) businessMeeting maintenanceneeds for industrial
machinery and automobiles

Technical support

Sale of automotive repair
parts (auto parts)

Maintenance tools

Outline (as of March 31, 2015)

Corporate name: NTN Corporation
Trademark:
Date founded: March 1918
Head office: 3-17, 1-chome, Kyomachibori,
Nishi-ku, Osaka-shi, Osaka
550-0003, Japan

Representative: Hiroshi Ohkubo, President
Number of employees:
Consolidated: 23,360
Non-consolidated: 5,062
Fiscal term: March
Capitalization: 54.3 billion yen
Net sales:
Consolidated: 701.9 billion yen
Non-consolidated: 338 billion yen(Fiscal year ended March 31, 2015)

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.
Editorial Policy
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 the fiscal year ended March
31, 2010 has combined the “Annual Report” and the “CSR Report,” is partof this active approach to information disclosure. This report has beenedited with reference to the International Integrated Reporting Frameworkof the International Integrated Reporting Council.

Certified as a supplier to themajor jet engine manufacturers
Medical equipment

NTN’s Vision

4

AerospaceIndustrial
Machinery
Applications

Construction machinery

Agricultural machinery10

Supplying rollingstock bearings in*

Machine toolcountries

Automotive wheels

2

GLOBALPRESENCE

VALUE
CREATION

Automotive engine

Automotive
Applications
Contributing to energy
saving of automobile
through more compact,
lighter weight andlower torque
Automotive transmission

Environmental Activities Supporting “NTN 100”

1World’s No.

Driveshafts
World’s No.

Wind turbine

TRIBOLOGY*

CSR Activities Supporting “NTN 100”

Rolling stock’s Strengths

Hub Bearing“NTN 100” Strategy

Enabling highperformance of rotatingparts in a range ofindustrial machinery* Photos are cross-sectional models of products.

NTN’s VisionCorporate Philosophy
and NTN’s Strengths........ 01
TRIBOLOGY........................ 03
GLOBAL PRESENCE.......... 05
VALUE CREATION............... 07
At a Glance......................... 11“NTN 100” Strategy
To Our Stakeholders.................. 13
Interview with the Top
Management.......................... 15
Feature “NTN 100”
Manage Growth..................... 21
Manage Profitability................ 25
Manage Foundation............... 29
Review of Operations
Aftermarket Applications........ 31
Industrial Machinery
Applications........................... 33
Automotive Applications......... 35

CSR Activities Supporting“NTN 100”Governance/Compliance................ 37
Governance /CSR Management...... 44
Stakeholder Dialog.......................... 46
Governance/Disclosureof Information............................... 47
Officers............................................ 48
Quality Management........................ 49
Supply Chain
Management................................ 51
Human Resources, Labor, etc......... 52
Contributions to
Local Communities...................... 55

Environmental Activities
Supporting “NTN 100”
Provision of Products Contributing
to the Environment................. 56
Environmental Performances
for the Fiscal Year Ended
March 31, 2015..................... 57
Environmental Targets for
the Fiscal Year Ending
March 31, 2016..................... 58
Prevention of Global
Warming................................ 61
Protecting Biodiversity............... 63
Protection of Resources............ 64

Management and Reductionof Environmentally
Hazardous Substances ......... 65
Environmental Management...... 66

Financial Section

CONTENTS

Third-Party Opinion ................... 68
Financial Section ...................... 69
Investor Information .................. 96
Global Network ......................... 97

02

The NTN Group creates technologies developedaround tribology for the future in the fields of global
environmental conservation and new energy.
Since being established in 1918, the NTN Group has provided
products and technologies to a wide range of fields, including
automobiles as well as wind turbines, aircraft, machine
tools, rolling stock, construction machinery, robots
and agricultural machinery.

Linking the world with new technology

TRIBOLOGY

Rolling
stock

Construction
machinery

Electric
vehiclesCreating theTechnologies of the Future

Longer working life
(high reliability)

Ultra-high speed &special environments

More lightweight& more compact

Lower friction(lower torque)

Medicalequipment

Precisionequipment

Machinetools

Automobiles“Elemental technologies,” “Design and development,”“Production technologies,” “Assessment technologies,”“Intellectual property”

Base technology

Surface finish

Evaluation

03

LubricantAnalysis

Diagnosis

Materials

Monozukuri
Forging
PolishingLower friction(lower torque)

Aircraft

Customer needs

Seals

More lightweight &more compact

Spacerockets,
artificial
satellites

Preservation of the global environment,
new energy

Tribology

Ultra-high speed& specialenvironments

NTN’s Technologies

A science and technology that includes the study
and application of mechanisms of friction, wear
and lubrication.
Wind
turbines

Longer working life
(high reliability)

Lathe turning

Joining

Powdercompression
molding

Injection molding
Surface
improving

R&D Policy
The NTN Group develops products such as bearings anddriveshafts for the industrial machinery market, automotive
market and aftermarket, takes an active approach to creating
new technologies that maximize NTN’s core competence oftribology technology and precision machining technology, andalso develops new products that match the needs of global
markets. It has always put the full force of its capabilities intodeveloping advanced technologies, products and production
technologies that are the best in the world and the only one
unrivaled among competitors, and proposes technologies andproducts that form solutions to potential market ideas. Thisdevelopment has led to contributions to global industries, such as
promoting energy saving. In addition to the Group’s core bearing
products, peripheral components and control technologies
developed by the Group such as plastic and sintered molding
and motors (drive circuits) are being combined with greater
development of products aimed at modularization and systemization. Development of such products provides benefits back to theGroup's customers by saving them design and assembly
man-hours, or shortening development times.

Developments in the
Industrial Machinery Field

NTN’s Vision
NTNの姿

The NTN Group's tribology technology continues to evolve in line with customer expectations.
Module products that incorporated sensors and other peripheral technology were combined withmechatronics technology and control technology to create system products. The NTN Group isaiming to enter into the service solutions industry by providing condition monitoring technology andsensing technology for bearings.

Condition Monitoring
System for Wind Turbines

Parallel Link High Speed Angle
Control Equipment“NTN 100”
Strategy
「NTN
100」
の戦略

By pursuing to develop greater reliability, lower torque,
lighter weight products with more compact designs, we
continuously meet market needs such as reducing environmental impact by using bearings. The NTN Group also
focuses on development of elemental technologies andnew products, as well as the development of products
including bearing peripheral
components.
＊

Handy Type Failure
Detection Device

Integrated Rotation
Sensor Bearing

Creation of Original
Technologies

Environmental
Activities
Supporting “NTN 100”
「NTN
100」
を支える環境活動

Rolling Bearings

Driveshafts＊

Ultra Low Friction Hub Bearing＊

In-wheel Motor System

Developments in the
Automotive Field

Press Connect Spline
Hub Joint
Financial
Section
財務報告

The NTN Group is advancing development of new products
aimed at supporting safety and reliability of vehicles, withgreater reliability, lower torque, and a lighter weight withmore compact design for existing core products such as
bearings and driveshafts, as well as continual improvements
made to the performance of module products that haverecently started being mass-produced. For electric vehicles,
research and development has focused on next-generation
technologies such as the In-wheel Motor System andelectromechanical brake as part of efforts to bring EV
system products to market faster. The Group is working
with system suppliers and other industry players for control
systems to be commercialized.

CSR Activities
Supporting“NTN 100”「NTN
100」を支えるCSR活動

IC Tag Integrated
Bearing

Mechanical Clutch Unit for
Next-generation Steering* Photos are cross-sectional models of products.

04

Original technology supports worldwide industry, and provides people
everywhere with safe, dependable, energy-saving lifestyles.
The NTN Group is ramping up global expansion of business.
To achieve this, the Group is strengthening its ties with companies and people aroundthe world, including local production and sales bases, customers and employees.

Global Four-region
SystemThe NTN Group conducts research anddevelopment on a global scale at four regionally independent, self-contained R&D bases.
At R&D bases in Japan and Europe, the Group
conducts elemental technology and other basic
research, as well as research into cutting-edge
technologies. At the same time, so that we canquickly respond to customer needs in various
regions, the R&D bases are self-contained
centers that can carry out independent
technological services such as development of
individual products, assessment for certification, surveys, and analysis.

Japan
PRODUCTION
ENGINEERING
R&D CENTERADVANCEDTECHNOLOGY
R&D CENTERNTN R&D
CENTER

INDUSTRIALTECHNICAL CENTER

Share database
information
Design data / Testing data /Experimental data / Production
technology data / Customerproject data

EuropeAmericas

China
NTN-SNR R&D
CenterNTN Automotive
CenterNTN China
Technical Center

GLOBAL PRESENCE
Various initiatives undertaken around the world

05

JAPAN

AMERICAS“Hitozukuri” to Increase Worksite Capabilities

Establishing a Stable Supply System

Techniques and skills developed at mother plants in Japan are
passed on to bases around the world in order to raise the level oftechniques and skills throughout the entire group. The “NTN
Technical Skills Competition” invites young to mid-career technicians and engineers of tomorrow from around the world tocompete and share their outstanding techniques and skills. The“Global QC Circle Convention” is also held by inviting teams thatwork to improve quality at group companies around the world toJapan to present improvement case studies and results of theiractivities. These activities are aimed at improving safety, quality andproductivity in regions around the world, as the NTN Groupestablishes a globally standard quality assurance system.
.

The NTN Group is aiming to establish a stable supply system in
the North American region, where automotive production isincreasing. In Mexico, where numerous car makers are moving
into, mass-production is planned to begin from October 2015 at
NTN MANUFACTURING DE MEXICO, S.A.DE C.V. (NTN
MANUFACTURING DE MEXICO). The new base is designed tomeet increasing demand, and also cover supply to the North
American region as part of efforts to spread risk and level out
production loads. Such local production systems will continue tobe strengthened to accelerate global expansion.

A scene from “NTN Technical Skills Competition”

The appearance of NTN MANUFACTURING DE MEXICO(Aguascalientes, Mexico)

■ Japan ■ Americas ■ Europe ■ Asia and Others

NTN’s Vision
NTNの姿

Net Sales by Region

Ratio of overseas sales (%)(Billions of yen)

800

65

64

67

72

73

73

701.9

725.0

2015

2016

639.0
600

543.5

539.6

2011

2012

2013

“NTN 100”
Strategy
「NTN
100」
の戦略

530.1

400

200

2014

( Forecast)( Years ended/ending March 31)

Contributing
to the world withvalue-added
technology andservices

ASIA and OTHERSStrengthening Engineering Capabilities

Strengthening the Driveshaft Production
System

In the anticipated growth markets of central and eastern Europe,
the NTN Group is strengthening its engineering capabilities andexpanding business. In Poland, NTN-SNR Polska Sp.zo.o.
(NTN-SNR Poland) opened a technical training center for
distributors, which holds various types of training related to
product knowledge and professional technology. Increasing
the engineering capabilities of distributors helps them to establish
a strong relationship of trust with local customers, leading togreater sales.

Demand for driveshafts is increasing in line with the sudden
increase in production figures in China, the world’s largest market
for automobiles. In response to this increase and to further
enhance the NTN Group’s production system, Xiangyang NTN-Yulon
Drivetrain Co., Ltd. (Xiangyang NTN) was established in 2014 as a
new production base, with mass-production starting in April 2015.
Production of driveshafts was increased at this new base located ininland in Xiangyang City that has an immense labor pool available,
as part of efforts to strengthen the supply system for car makers
producing vehicles in China.

Environmental
Activities
Supporting “NTN 100”
「NTN
100」
を支える環境活動

EUROPECSR Activities
Supporting“NTN 100”「NTN
100」を支えるCSR活動

0

Financial
Section
財務報告

A scene from technical training for distributors

The appearance of Xiangyang NTN (Hubei, China)

06

Financial
CapitalClosing-related Indices

Improving profits to improve margins
Net sales

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

800

80

701.9 725.0

5.2

3.8

60

530.1 543.5 539.6

6.2

1.3

43.9
400

40

20

0

2011 2012 2013 2014 2015 2016

(Forecast)(Years ended/ending March 31)

31.0

30

50.0

20

23.4
14.4

10

6.0

0

20.7

–10

7.3
0

(Billions of yen)

6.9

33.0
24.6

200

Net income (loss)
40

4.6

639.0
600

Operating income
Operating margin (%)

2011 2012 2013 2014 2015 2016–20

(Forecast)(Years ended/ending March 31)–14.2 –14.6
2011 2012 2013 2014 2015 2016*(Forecast)(Years ended/ending March 31)* In year ending March 31, 2016 “Net income” means“Net income attributable to shareholder (parent company)”

VALUE
CREATIONNTN is making sound capital expenditures
capital efficiently with the goal of delivering

Investment-related IndicesStrengthening profit control and focusing on improving asset efficiency
Capital expenditures / Depreciation
Capital expenditures
Depreciation(Billions of yen)
60

40
30

35.9

(Billions of yen)(Times)

50.0

49.0

29.7

Inventory turnover ratio

200

54.4

50

Inventories

39.3 40.4

34.2

34.8
33.2

150

38.7

31.3

155.1

163.3 166.5

184.1 179.0

137.0

6

4

3.9

3.5

3.8

3.8

4.1

3.3

100

2

20
50

10
0

2011 2012 2013 2014 2015 2016

(Forecast)(Years ended/ending March 31)

0702011 2012 2013 2014 2015 2016

(Forecast)(Years ended/ending March 31)02011 2012 2013 2014 2015 2016
(Forecast)(Years ended/ending March 31)

NTN’s Vision

Net income / Average shareholders’equity (ROE)

Equity to capital ratio

Cash dividends

(%)

(%)

(Yen)

15

40

10

31.6

7.2

5

28.4

30

26.0

28.6

30.0

23.5

10

10

10

8

6

6

3.0

“NTN 100” Strategy

10.5
10

12.0

20
4

0
10

–5

–10

–7.2

–7.3

0

(Forecast)(Years ended/ending March 31)

2011 2012 2013 2014 2015 20160(Forecast)(Years ended/ending March 31)02011 2012 2013 2014 2015 2016

(Forecast)(Years ended/ending March 31)

and R&D expenditures, and is utilizing its financial
major returns to shareholders.

NTN-ROI*Net D/E ratio

(%)

(%)

(Times)68

7.1

Environmental Activities Supporting “NTN 100”

Net income / Average total assets (ROA)CSR Activities Supporting “NTN 100”

2011 2012 2013 2014 2015 2016

2

2

2.0

6.3
3.6

4

6

2.7

2.3
0.9

1.0

2

0

–2

3.4

–1.8
–1.9
2011 2012 2013 2014 2015 2016

(Forecast)(Years ended/ending March 31)

0

1.11
0.92

1.27

1.11

1.00

0.5

1.1
2011 2012 2013 2014 2015 2016

(Forecast)(Years ended/ending March 31)

0

Financial Section

4.2
4

2

1.37

1.5

4.6

2011 2012 2013 2014 2015 2016

(Forecast)(Years ended/ending March 31)* NTN-ROI = Net operating income after tax / (Inventories + tangible fixed assets)08

HumanCapitalNTN contributes to build a sustainable
society by taking its businessactivities as creation of a diverse
range of value through a diverse rangeof capital investment.

Percentage of employees overseas
(%)
100
80
60

61

63

62

66

64

67

40
20

In addition to contributing to society with its final

0

products and services, the NTN Group aims to2011 2012 2013 2014 2015 2016

(Forecast)(Years ended/ending March 31)

achieve management that takes into account thePercentage of hired female graduates

global environment and human resources, as well as(%)
30

the local community through all its businessprocesses, from R&D through to sales.

28

25

21

20

14

15
10

15

17

8

5

VALUE
CREATION

02011 2012 2013 2014 2015 2016

(Forecast)(Joined in Apirl)

Manufacturing
CapitalIntellectual
CapitalRatio of overseas production

Ratio of local procurement

(%)
100

(%)
100

80

82

83

87

Ratio of R&D expenditures to
net sales
R&D expenditures
Ratio of R&D expenditures (%)

80

80

60

60

(Billions of yen)
25
3.2
3.0

40

20

40

42

43

47

49

51 52

0

15

20

20

2011 2012 2013 2014 2015 2016

(Forecast)(Years ended/ending March 31)* Overseas production has been calculated
based on U.S. $1 = ¥110, EURO €1 = ¥130

09

80

86

0

15.7

17.2

3.0

16.2

2.8

2.6

17.8

18.1 18.7

2.6

10
2011 2012 2013 2014 2015 2016

(Forecast)(Years ended/ending March 31)

502011 2012 2013 2014 2015 2016

(Forecast)(Years ended/ending March 31)

[NTN Group companies in Japan](10,000 tons)

40

28.2 28.8 26.9 27.2 27.9 28.0

30
20
10

The coefficient of friction for bearings is generally 0.001 to
0.005, which allows a 1,000 kg object on a surface to be
moved with the pulling force of an object of approximately
1 kg. Bearings themselves are “eco-products” that help reduce
environmental impact, and using products with such characteristics contributes to reductions in energy consumption andCO2 emissions worldwide.
“NTN 100” Strategy01Minimizing
energy loss caused by friction

CO2 emissions

NTN’s Vision

NaturalCapitalCreating
NTN Value2011 2012 2013 2014 2015 2016

(Forecast)(Years ended/ending March 31)

Landfill waste[NTN Group companies in Japan](Tons)

200

204

150

123 120

100

70

62

49

50
0

2011 2012 2013 2014 2015 2016

(Forecast)(Years ended/ending March 31)

Water usage[NTN Group companies in Japan](10,000 m3 )250

234 228200

211 202

Helping to keep turning
machinery that needs to rotate

Bearings are used to help the rotation of a wide range ofmachinery, including transportation machinery such as
automobiles, high-speed trains and aircraft that may havean impact on human life if they stop operating, or machinery and equipment that allows mass-production. The NTNGroup enables the safe and reliable operation of machinery that cannot be allowed to stop, with the globally
standard quality assurance system that it has established,
as well as its engineering services.

196 190

100
50
2011 2012 2013 2014 2015 2016

(Forecast)(Years ended/ending March 31)

SocialCapitalCustomer Satisfaction Surveys
Needs improvement
greatly

7%

Driveshafts, which transmit the engine’s rotation to the tires,played a major role in increasing the uptake of front-wheel
drive vehicles. Continuous technical development has resulted
in a greater steering wheel angle, reduction in vibrationstransmitted to the steering wheel and better ride comfort,
which in turn contributed to a reduction in fatigue levels ofdrivers around the world.
*NVH: Noise, Vibration, Harshness

0%Financial Section(As of year ended March 31, 2015)

Needs
improvement
slightly

3

Contributing to NVH* improvements
for automobiles

Environmental Activities Supporting “NTN 100”

150

0

CSR Activities Supporting “NTN 100”

2

250

Excellent

22

%

Good

71

%

10

At a Glance

Operating Income
Operating Margin (%)

Net Sales

Aftermarket Applications

Percentage of
total sales

16%
112.4

billion yen

This business covers
aftermarket bearing sales
for general machinery
through distributors,
the aftermarket for mining,
paper and steel machinery,
as well as the aftermarket
for automotive repair parts(auto parts). The NTNGroup provides an increasing range of bearings of all
types to customers aroundthe world.

20.8 20.3(Billions of yen)(Billions of yen)

150

25

120
90

94.0 89.2
86.2

103.8

112.4

17.1

20

17.9

19.1

30

5
0

2011 2012 2013 2014 2015 2016

( Forecast )( Years ended/ending March 31)

17.7

19.2

14.7

15
10

17.1 18.6
23.2

124.5

60

0

16.5

2011 2012 2013 2014 2015 2016

( Forecast )( Years ended/ending March 31)

Industrial Machinery Applications

Percentage of
total sales

16%
109.0

billion yen

This business covers a
range of industrial machinery sectors, including windturbines, rolling stock andmachine tools. The NTNGroup is working to
expand sales by integrating
new technologies into all
sizes of bearings.

(Billions of yen)(Billions of yen)

150
120

99.5

25

106.6

90

93.7

101.2

109.0 107.5

20

5.7

5.9

6.3

6.3

3.2

3.1
1.6

15

60

10

30

5

0

4.5

2011 2012 2013 2014 2015 20160

( Forecast )( Years ended/ending March 31)

3.1

4.8
1.5

3.3

2011 2012 2013 2014 2015 2016

( Forecast )( Years ended/ending March 31)

Automotive Applications

Percentage of
total sales

68%
480.5

billion yen

This business covers theautomotive and automotive-related market. With
the main products of hub
bearings, driveshafts, andneedle roller bearings, theNTN Group provides theworld’s automotive andautomotive related companies with new technologies
and products.

(Billions of yen)

480.5 493.0

500

433.9
400

344.4 342.9 356.6

25
20-0.9 -2.5

15

5
200

2.8

3.8
18.4

4.2
20.5

12.0
3.5

0
-5

100
0

1.0

10

300

-10

2011 2012 2013 2014 2015 2016

( Forecast )( Years ended/ending March 31)

11(Billions of yen)

-15

-3.2
-9.0
2011 2012 2013 2014 2015 2016

( Forecast )( Years ended/ending March 31)

NTN’s Vision

Reference: Net Sales by Region

Americas

Japan

29%

27%
(Billions of yen)(Billions of yen)

186.6

193.4
177.5

179.1

191.5 194.0

202.6

200
174.6

150

150

141.6
118.0

100

100

50

50

0

2014

2015

0

2016

(Forecast)(Years ended/ending March 31)

124.6

2011 2012 2013

2014

2015

2016

( Forecast )( Years ended/ending March 31)

Results in the Fiscal Year Ended March 31, 2015
There was an increase for the aftermarket applications
due to increased customer demand for the industrial
machinery aftermarket, as well as an increase in theindustrial machinery applications due to growth forgeneral machinery and aircraft. The automotive
applications increased due to factors such as anincrease in customer demand.

Results in the Fiscal Year Ended March 31, 2015
There was an increase for aftermarket applications
due to an increase in customer demand for the automotive aftermarket. The industrial machinery applications increased due to factors such as construction
machinery, and the automotive applications also
increased due to mass-production of new orders andincreased customer demand.

EuropeAsia and Other areas(Billions of yen)(Billions of yen)

200

200
166.3

150

132.8

133.0

171.2 165.0
150

136.7

124.8

100

50

50

2011 2012 2013

153.0

119.0

100

0

20%

2014

2015

2016

(Forecast)(Years ended/ending March 31)

92.4

2011 2012 2013

2014

2015

2016

( Forecast )( Years ended/ending March 31)

Results in the Fiscal Year Ended March 31, 2015
There was an increase for aftermarket applications due
to increased customer demand for the industrial
machinery aftermarket, as well as the industrial machinery applications increased due to factors such as
wind turbines and rolling stock. The automotive market
increased due to factors such as mass-production of
new orders and increased customer demand.

Financial Section

Results in the Fiscal Year Ended March 31, 2015
There was a decrease in the aftermarket applications,however the industrial machinery applications increased due to products including wind turbines andaircraft. The automotive market increased due to anincrease in customer demand.

0

92.7

95.8

Environmental Activities Supporting “NTN 100”24%

CSR Activities Supporting “NTN 100”

2011 2012 2013

213.0

“NTN 100” Strategy

200

12

To Our Stakeholders

President’s Message
My name is Ohkubo, President of the NTN Group.
The fiscal year ended March 2015 was the final
year of the previous Medium-term Management
Plan “Revival 2014.” I was pleased to announce
performance results that exceeded initial plans
thanks largely in part to the positive businessenvironment in terms of exchange rates.
The fiscal year ending March 2016 is the firstyear of the new Medium-term Management Plan“NTN 100.” The entire group will be focused onefforts to create a more robust managementfoundation in the lead up to the company’s
100th anniversary in 2018.

13

NTN’s Vision

Achieving NTN’s 100th Anniversary and Sustainable
Growth for the Next 100 Years

Growth Efforts

Financial Section

Hiroshi Ohkubo

Environmental Activities Supporting “NTN 100”

We will be implementing a range of efforts aimed
at attaining medium- and long-term growth in linewith our corporate philosophy. I consider it isimportant to ensure ongoing profits by further
increasing business profitability and efficiency ofassets, and to strengthen the financial structurethat is essential for ensuring stable returns to all
stakeholders. As a company established aroundthe concept of Monozukuri, NTN will always create
original technologies and will back these actions
up with specific developments in Monozukuri andhitozukuri (personnel development). Social
responsibility, such as compliance with legal
standards and conservation of the global environment, forms the backbone of a global company,
and will be strengthened even further as thefoundation of the Group’s management.
The NTN Group would like to take thisopportunity to ask for the continued support ofour stakeholders.

CSR Activities Supporting “NTN 100”

During the fiscal year ended March 2015, theJapanese economy continued to experience a
moderate recovery despite some impact of theincreased rate of consumption tax. Looking atoverseas economies, the U.S. economy continued to recover and the European economy continued to pick up. However, the rate of expansion
in the Chinese economy slowed, while otheremerging countries saw a gradual slowdown ineconomic conditions.
In this environment, the NTN Group has promoted various initiatives to expand sales in highly
profitable Aftermarket and Industrial Machinery
markets, and improve the profitability of its automotive and other business with the aim “reforming the business structure to generate profit” asdefined in the two-year Medium-term Management Plan “Revival 2014”, which started in April
2013. As a result of these initiatives, the NTNGroup succeeded in recovering results beyond
initial forecasts.
Building on the results of the previous
Medium-term Management Plan “Revival 2014,”
the NTN Group will pursue a new Medium-termManagement Plan “NTN 100” for the three-year
period from April 2015 to March 2018. “NTN 100”stands for “NTN Transformation for Next 100,”and the three-year period is regarded as a period
for transformation and building foundation thatwill allow realization of “Our Vision,” so that theGroup can celebrate its 100th anniversary inMarch 2018 and achieve continuous growth forthe next 100 years.

To achieve “Our Vision,” three basic policies
have been set forth and will be implemented:“Manage Growth” to focus management resources (personnel, materials and cash) on
strategic areas; “Manage Profitability” to reformthe business structure to pursue value without
relying on scale; and “Manage Foundation” tostrengthen the company’s management andfinancial foundations.

“NTN 100” Strategy

NTN’s Accomplishments and Challenges

President

14Interview with the Top Management

About “NTN 100”In the new Medium-term Management Plan “NTN 100,” the NTN Group willbuild foundations for the next 100 years under the three basic policies–“Manage Growth,” “Manage Profitability” and “Manage Foundation.”
Q1: What was overall performance in the fiscal year ended March 2015?
A1

Since we recorded the highest net sales ever and increased profit, wehave decided to increase dividends.

Net sales for the fiscal year ended March 2015 wereup year-on-year by 10% to 701.9 billion yen, making
it the highest figure for two consecutive terms. Operating income was also up year-on-year by 33% to43.9 billion yen, and the operating margin was 6.2%.
Performance was the best for 4Q in particular, with
an operating income of 14.5 billion yen, making it thehighest ever quarterly financial result. Net income forthe year was also 23.4 billion yen, taking us back tosurplus for the first time in three years.
Based on these financial results, we increased thedividends for fiscal year ended March 2015 by 1 yenover the initially planned figure to 3.5 yen, making theannual dividend payout 6 yen.

Q2: What were the results of the previous Medium-term Management
Plan “Revival 2014?”
A2

Not only achieving the target figures, we achieved numerous results
including implementing “structural reform” and developing new businesses.

“Revival 2014” was a two-year management planwith “reforming business structure to generate profit”
as the basic policy. The 701.9 billion yen in net sales
and 43.9 billion yen operating income for the fiscal
year ended March 2015 far exceeded the 600 billion
yen in net sales and 40 billion yen operating income
initially forecast under this plan.
With “Revival 2014” we implemented the “emergency measures” of “reducing personnel and fixed
expenses,” “limiting capital expenditure” and “reducing inventories.” As a result, investments into capitalwere conducted efficiently while limiting expenditures
to the scope of depreciation and amortization overthe past two years, by actions such as utilizing existing facilities that were left idle. While the amount of
inventories increased due to factors such as
strengthening the aftermarket business, the inventory
turnover rate increased 0.5 points to 3.8, from therate of 3.3 for the fiscal year ended March 2013.
From a business perspective, we also implemented “centralization of management resources.” In theaftermarket business, we achieved a number ofresults, including securing MRO (Maintenance, Repair
and Overhaul) projects by rolling out technical services on a global level, and expanding the autoparts

15

business. In the industrial machinery business, we
expanded sales in fields featuring high-end technology, such as aircraft, wind turbines and rolling stock.
Revenue increased in the automotive business after
we implemented various policies aimed at improving
profits, resulting in the operating margin for the
automotive business increasing to 3.8%, from -2.5%in the fiscal year ended March 2013.
We also implemented “structural reform.” InJapan, we offered early retirement options to 600
employees, with 420 employees eventually applying
for it. The rest of almost 200 employees were reassigned to the aftermarket business as more employees were required there. We established new plants
in China and Mexico in order to accelerate overseas
production. Xiangyang NTN-Yulon Drivetrain Co., Ltd.
(China) already began mass-production in April 2015,
and mass-production is planned to start at NTN
MANUFACTURING DE MEXICO, S.A.DE C.V. in
October this year. These new plants will play a majorrole in the NTN Group’s future global production
system. Meanwhile, selection of businesses resulted
in us establishing a new logistics subsidiary andwithdrawing from the precision equipment business.

NTN’s Vision“NTN 100” Strategy

Q3: What areas of “Revival 2014” do you need to reflect on?
A3

For factors that reduced profit, we were able tominimize the drop in selling price levels throughefforts such as limiting price reductions against
planned figures and raising the price of unprofitablemodels, however personnel expenses and costs
increased beyond the figures we had budgeted.
So while the policies of “Revival 2014” weresuccessful, this two-year period can also be viewed
as riding on the back of the weaker yen. Accordingly,
issues still remain with the basic policy of how to“reform business structure to generate profit,” while
we could find out new issues to ensure future growth.

Main Management Indices of “Revival 2014”(Years ended March 31)

Exchange rates

2015 (Results)
701.9
43.9
6.2%
23.4
184.1
3.8
2.7%
10.5%
1.11
6.3%
$:¥109.8 €:¥138.7

Financial Section

Net sales (billion yen)
Operating income (billion yen)
Operating margin
Net income (billion yen)
Inventories (billion yen)
Inventory turnover ratio (times)
Net income /Average total assets (ROA)
Net income /Average shareholders’ equity (ROE)Net D/E ratio (times)
NTN-ROI*2015 (Target)
600.0
40.0
6.7%
20.0
145.0
4.1
2.6%
10.5%
1.24
6.4%
$:¥85 €:¥110

Environmental Activities Supporting “NTN 100”

“Revival 2014” was the management plan that weannounced in February 2013. Compared with theforecast operating income of 7.5 billion yen for the
fiscal year ended March 2013 announced as part ofthe initial plan, we achieved an operating income of
43.9 billion yen for the fiscal year ended March 2015,
which is an increase of 36.4 billion yen over two
years. Yet if we have a closer look at the breakdown,
the exchange rate was a major factor that led to thisincrease. The reduction in proportional costs was
somewhat affected by policies such as local procurement, however we were unable to achieve our initialplans due to the increased cost in covering exports
from Japan to meet the sudden increase in demandin America.

CSR Activities Supporting “NTN 100”

While the exchange rate had a positive impact on business performance,
there are issues remaining with how we should “reform business structure
to generate profit.”* NTN-ROI = Net operating income after tax / (Inventories + tangible fixed assets)16

Q4: As the President, what were your thoughts while developing the new
Medium-term Management Plan “NTN 100”?
A4

We are aiming to achieve “Our Vision” for the NTN Group in the lead up to
the company’s 100th anniversary.

This Medium-term Management Plan began in April
2015, and will run for three years through to March2018. The NTN Group will celebrate its 100th anniversary in 2018. To develop this management plan,
we first considered “Our Vision” to summarize 100
years from foundation and achieve sustainablegrowth for the next 100 years. “NTN 100” is a nameconsisting of the initials of NTN Transformation for
Next 100, and embodies both our 100th anniversary
as well as the transformation and foundations thatwill be required to achieve “Our Vision.”
To better clarify “Our Vision,” we defined ourlong-term vision covering the next 10 years to highlight the position of the NTN Group, before we actually started developing “NTN 100.”

Poster of “NTN 100”

Q5: Can you tell us more about this long-term vision?
A5

We will have employees around the world coordinate together to achieve“Our Vision.”Long-term Vision: “Our Vision”
1. A company where its corporate philosophy
is understood by all employees around theworld and where all employees think and act
for themselves
2. A company with original new products andservices, appreciated for its high quality andfunctions, and has a global presence
3. A company where everyone involved with
NTN has pride in the “NTN” brandOur first vision is to become a company where all
employees around the world behave in accordancewith the corporate philosophy, comply with regulations and contribute to the local community. I want to
see the NTN Group become a company that grows
daily, and where each and every employee can think
and act for themselves. As the NTN Group is an

17

entity that represents Japanese “Monozukuri,” oursecond vision is to become a company that has
technologies that are useful globally more than ever,that is always seeking a high level of quality andtechnology, and that is always looking for the nextchallenge. And the third is to become a company
where not just our employees, but all stakeholders,
including shareholders, customers and business
partners, have pride in the “NTN” brand.
These are not just qualitative targets - we havealso set ourselves quantitative targets. The target for
the fiscal year ending March 2026, in 10 years time,
will be to double our current net sales and achieve an
operating margin of 10 to 15%. While these aredefinitely ambitious goals, I believe that we canachieve them if I actually outline the goals to ouremployees, so that it increases the motivation of
employees around the world and that they all work
together to achieve them.

Operating margin to
10 to 15%

9.3%

8.8%

Net Sales

1.8%(Billion yen)

800
700
600

500
400
300
200

4.6%

3.8%

0.3%

5.2%
1.3%

■ Net Sales ■ Operating Income ■ Net Income
Operating Margin (%)
534.0

527.1

452.7

530.1

701.9

Operating Income(Billion yen)

90

539.6

70.0

49.6

43.9

27.4
9.5

0

‒9.0
2008

2009

GCA 21

1.4

33.0
6.0

‒2.0
2010

For the Next. 2010

2012

2013

Global Advance 2013

Company’s
100th anniversary

50

March 2018

30

23.4

10

7.3
‒14.6

‒14.2
2011

42.0

70

2014

2015

2016

Revival 2014

2017

2026

2018

NTN 100( Years ended/ending March 31)“NTN 100” Strategy

100

24.6
20.7
14.4

Net sales todouble current figures

800.0
639.0

543.5

6.2%

NTN’s Vision

Company-wide Targets of “NTN 100”

Q6: Can you provide an overview of “NTN 100”?
A6

urgently need to create new businesses, in addition to
focus on our range of existing products and business.
The main policies that will be implemented as part of“NTN 100” will be further expansion of the profitable
aftermarket business, increasing profits of products inthe automotive business, particularly driveshafts, anddeveloping new business fields that follow on frombearings and driveshafts. I believe that the NTN Groupwill be able to successfully build a foundation for the
next 100 years by overcoming these issues.
Target figures in three years include 800 billion yen in
net sales, 70 billion yen operating income, an operating
margin of 8.8% and a net income for the year of 42billion yen. This represents an approximate 14% increasein net sales and a 2.6 point improvement to theoperating margin.
* Called “Constant Velocity Joints (CVJ)” until the NTN Report 2014.

Main Management Indices of “NTN 100”

(Years ended/ending March 31)

2015 (Results)
701.9
43.9
6.2%
23.4
184.1
3.8
28.6%
1.11
10.5%
$:¥109.8 €:¥138.7

2018 (Target)
800.0
70.0
8.8%
42.0
180.0 or less
4.5
30.0% or more
1.0 or less
14% or more$:¥110 €:¥130

Financial Section

Net sales (billion yen)
Operating income (billion yen)
Operating margin
Net income (billion yen)
Inventories (billion yen)
Inventory turnover ratio (times)
Equity to capital ratio
Net D/E ratio (times)
Net income /Average shareholders’ equity (ROE)
Exchange rates

Environmental Activities Supporting “NTN 100”

For “NTN 100” we have adopted the three basic policies
of “Manage Growth,” “Manage Profitability” and“Manage Foundation” and developed a three-dimensional
business strategy for each of business axis, with theregional axis covering Japan, the Americas, Europe,
China and ASEAN, the business axis covering theaftermarket, industrial machinery and automotive
sectors, and the product axis covering bearings anddriveshafts*. Using these as a springboard, we will
implement main policies for our business foundation.
If I was to outline areas that we need to reflect on
from the previous medium-term management plan
“Revival 2014” that ended in March 2015, it would be thenumber of issues that are still remaining regarding the
profitability of the NTN Group, as while we achieved ournumerical targets, the increase in our profit ratio waslargely affected by exchange rates. And to ensure that
the NTN Group continues to grow and expand, we

CSR Activities Supporting “NTN 100”

We will be building on our net sales and improving our operating margin
based on the three basic policies.

18

Q7: Can you provide information on the three basic policies?
A7

We have developed specific main policies to achieve the targets of “NTN 100.”

The “Manage Growth” main policy involves intensively
allocating management resources (personnel, materials and cash) to strategic areas. More specifically, themajor themes are “Develop Businesses in New
Areas” and “Expand the Aftermarket Business.”“Manage Profitability” involves reforming businessstructure from “volume” to “value” to generate profit.
More specifically, main policies cover “Structural Reformof the Driveshaft Business” and “Monozukuri with
Next-generation Technology.”“Manage Foundation” includes strengthening themanagement and financial foundations.
To implement these policies properly, “NTN 100”
includes strengthening cross-functional management,
chiefly by clarifying roles and responsibilities in theregional axis, and additionally the business axis andfunctional axis (functions such as finance, humanresources and procurement).

Basic Policies of “NTN 100”
Implement main policies based on 3 Basic Policies to becomea co-creative partner company for customers
ASEA
N, et
Chin
c.
a
ope
R
Ame
ricas
Japa
n
l
ona
egi EurConcentrate resources (personnel,materials and cash) on strategic areas

Prod
Business unit

ucts

e
nag

Bus
ine
Stra ss
tegy

Ma

wth

ity
abil

rofit

ge P

a
Man

Bu

Gro

ion
dat

oun
ge F

Philos sinesophy,spolicy bas
ic, busin
ess p
roces

s

na
Ma

Reform business structure from“volume” to “value” to generate profit
Strengthen management andfinancial foundations

Main Themes of “NTN 100”
Major Themes

Growth19① Develop Businesses in New Areas② Expand Aftermarket BusinessProfitability③ Structural Reform of the Driveshaft Business④ “Monozukuri” with Next-generation Technology

Foundation⑤ Strengthen the Management Foundation⑥ Strengthen the Financial Foundation

NTN’s Vision“NTN 100” Strategy

A8

We urgently need to build the management foundation on a global level.
local personnel and women. And of course we arelooking at enhancing other global initiatives, such as
taking a more environmental approach by utilizing
natural energy sources, and conducting grassroots
activities that contribute more to local communities.

Q9: Please provide a message to your shareholders.
A9

We are aiming for a ROE beyond 14% and a dividend payout ratio of 30%.
for annual dividends for the fiscal year ending March
2016 of 10 yen, and I want to improve the shareholders’ equity ratio to 30% while “NTN 100” is in action.

Financial Section

With “NTN 100,” we will be both developing a soundbalance sheet and improving asset efficiency. We will
make efforts to reduce the net D/E ratio to 1.0 or
less, and increase ROE beyond 14%. We are aiming

Environmental Activities Supporting “NTN 100”

Details are provided in “Manage Foundation” (P29 to30), however for an increasingly global company like
ours, it is important to ensure that the corporate
philosophy is adopted worldwide, and that efforts are
made for thorough compliance. Another key will be toensure diversity by employing a greater number of

CSR Activities Supporting “NTN 100”

Q8: What are your thoughts on strengthening the management system?

20

Feature “NTN 100” Manage Growth

1 Develop Business in New Areas

Targets• Search for ideas for new business instead of being limited to existing areas• Utilize accumulated technology and knowhow, as well as strengthen
external links to fuse technology with ideas• Target new markets expected to grow in the future with unique technology

1 -1 Energy Business Using Natural Energy

The NTN Group will engage in power generation and energy
storage in the natural energy field by utilizing an innovativeand highly efficient “blade” technology. This "blade" technology capable of converting even weak wind to rotationalenergy at high efficiency was developed by Global EnergyCo., Ltd. Using unique and thick cross-sectional shape of
blade, large lift power is generated without wind noise.

Horizontal Axis
Wind Turbine

Vertical Axis
Wind Turbine

This unique shape allows weak wind to be swiftly captured
compared to conventional wind turbine for both the horizontal and vertical axis wind turbines, and keeps rotating for awhile after the wind stops. In addition to the blade technology, we also successfully differentiated our power generation
efficiency widely from other compact wind turbines byapplying our Group's unique rolling bearing technology andmagnetic material technology. We also apply this technology
to our micro hydro turbines.
Already we have started endeavors to commercialize
these turbines, with plans to start full-scale development,
production, and sales from the fiscal year ending March2017. We aim to achieve net sales of 50 billion yen for the
fiscal year ending March 2026.

Micro Hydro Turbine

1 -2 EV Business Electrifying Automobiles, Revolutionizing Safety
Themed on the electrifying automobiles and revolutionizing
safety, the NTN Group's EV Business proposes products
which support the electrification of "driving", "turning", and"stopping". These products apply our machine elemental
technology that contributes to more compact and lightweight advantages, and control technology that includes
motors and inverters. We believe that we will contributeenormously to improve safety by increasing the control
response through electrifying automobiles.

In-wheel Motor
System21

Electromechanical Brake
System with Parking Brake

For "driving" technology, we offer In-wheel Motor
System which directly drives car tires by a motor. By developing a unique small-size reduction drive, we achieved todownsize the product.
For "turning" technology, we have established a uniquevariable mechanism using Steer-by-wire System that separately changes the orientations of each tire. For "stopping"technology, we have also succeeded in miniaturization, bydeveloping a unique screw which can hold the brake pad inElectromechanical Brake Systems with Parking Brake whichbrake each tire individually.
Our electric actuator units for electromechanical brakes
and next generation steering mechanical clutch units which
are already being mass produced are also included in thisbusiness area. We are aiming at net sales of 30 billion yen
for the fiscal year ending March 2026.

NTN’s VisionNTNの姿

1 -3 Robot-related Business Working and Living with People

been used in the industrial robot fields, and we hope to
expand its application to other robots.
We are aiming at net sales of 20 billion yen for the fiscal
year ending March 2026 for this business.

Linear Module

Electric Actuator

1 - 4 Service, Solution Business Utilizing Big Data
We hope to expand these sensor and data analysis
technologies to technology for sensing structural degradation, as well as to systems for monitoring the degradation ofsocial infrastructures such as tunnels and bridges.
* New Energy and Industrial Technology Development Organization

Wind turbine
nacelleHandy Type Failure
Detection Device

Financial
Section
財務報告

By employing our Group's technology of condition monitoring, diagnosis and sensing for bearings, we plan to expand
our Group business which focused mainly on providing“things” to one that provides service and solutions toachieve corporate growth. Our bearing diagnosis technology
is currently under demonstration test for Condition Monitoring System (CMS) for Wind Turbines in a joint project with
NEDO*. We aim to further sophisticate these technologies
and expand sales. The Handy Type Failure Detection Device
developed has a function which sends measured vibration
data to our Group’s server via the customer's smartphone,and returns analysis results to customers.

Environmental
Activities
Supporting “NTN 100”
「NTN
100」
を支える環境活動

Parallel Link High Speed
Angle Control
Equipment

CSR Activities
Supporting“NTN 100”「NTN
100」を支えるCSR活動

In our robot-related business, we are applying our Group's
unique technology as seeds for developing products whichmatch those seeds to new needs and expand these products on a global scale.
Already we are globally expanding our linear modules
which employ the NTN-SNR ROULEMENTS high precision
positioning technologies. Our plan is to apply to this robot
business technologies such as small-size ball screw
actuators, etc. which are being mass produced for automotive electric hydraulic brakes. Furthermore, our proprietary developed parallel link mechanism that is capable oftracking hemispherical surfaces like the human wrist andboasts high precision and high moving speed already has“NTN 100”
Strategy
「NTN
100」
の戦略

The NTN Group boasts the world’s No. 1 share of hub bearings and No. 2 share of driveshafts, and is strong
in the fields of precision bearings and large bearings for aircrafts, rolling stock, and wind turbines.
In “NTN 100”, we will develop business in new areas fusing the technologies and knowhow that we haveaccumulated as a group.
Moreover, in the search for new business ideas, we will also strengthen ties with external organizations
such as universities, other companies, government agencies and research institutions to fuse their technologies and ideas and expand new businesses in growing markets.

Condition Monitoring System forWind Turbines

22

Feature “NTN 100” Manage Growth

2 Expand Aftermarket Business

Targets• Excellent product lineup and shorter lead-time from ordering to delivery• Expand engineering services• Approach growth markets and specific industries

Sales Plan of Aftermarket Business(Billions of yen)

200

+10%
150

150.0

annual growth

112.4
100

Automotive

50
Industrial
machinery

0

2015
Result

2 -1

2016

2017

2018

(Years ended/ending March 31)

Until now, the NTN Group has focused on strengthening
the aftermarket business. In particular, the Aftermarket
Business Headquarters was established during theprevious medium-term management plan “Revival
2014,” and engineering services were started atcustomer worksites where equipment is operating.
The aftermarket for automotive repair parts (auto parts)
takes on knowhow from NTN-SNR ROULEMENTS.
An issue that needs to be addressed in the future is tofurther increase the presence in emerging markets andexpand sales in the fields where the Group’s strengths
are not utilized to their fullest extent.
The NTN Group will aim to become the “world’s
No. 1 customer satisfaction level with product lineupand engineering services” by providing a better
product lineup and shortening the lead-time fromordering to delivery, further expanding engineering
services that are leading to positive results over time,and strengthening the approach taken to growthmarkets and specific industries.

Enhance Product Lineup and Shorten Lead-Time

The NTN Group’s Aftermarket Business features a system that is
capable of providing the No.1 product lineup within the Japanesemarket, however is still seen as lagging when considering global
markets. Addressing this issue by increasing the aftermarket
product lineup will be effective for storing inventory more efficiently, increasing the consolidated base inventory turnover rate,increasing sales and shortening the lead-time.
A quick response is extremely important in the aftermarket
business. The lead-time from receiving an order to delivering the
product differs depending on each product model type, however
the target of “NTN 100” is to shorten the average lead-time of all
products to half the current time. A delivery system is already inplace in Japan, Europe and the Americas where products can be
shipped out within 24 hours, and this system will be expanded toemerging countries and other regions on a global scale.

A Warehouse for Aftermarket

23

Strengthen MRO Activities

Aftermarket Academy

MRO is short for Maintenance, Repair and Overhaul, and is a type of agreementthat covers all maintenance work for equipment operating at customer
worksites. The NTN Group currently operates a total of 11 technical service units
in Japan, the Americas, Europe and China, and they have become a major
driving force for this business. These technical service units will be used more
extensively and deployed to emerging countries in ASEAN as well as India,
central and southern America and Russia.
In Japan, the Aftermarket Academy was established for engineers at distributors, and has delivered stunning success. This program will be rolled out
globally with the aim of increasing the competitive capabilities of the NTN Group.
The Academy mainly runs courses related to bearing technology and offers
technical guidance on bearing diagnosis methods and other topics, with participants completing the courses provided with a certificate. This mode of communication is being used to strengthen partnerships with distributors, and will also
be linked to the development of a database for aftermarket projects.

“NTN 100” Strategy

Technical Service Unit

CSR Activities Supporting “NTN 100”

2 -3

NTN’s Vision

2 -2Strengthen Approaches to Target Markets“NTN 100” is targeting four markets (regions) in the aftermarket business.

North American market

Chinese market
Products and services will be enhanced to cover the targeted MRO industries of mining, rolling stock and power
generation. The Chinese market differs to that of North America, and the main focus will be expanding the distributor
network there. Automotive-related distributors in particular will be increased 1.5-fold over current numbers.

Russian market

Environmental Activities Supporting “NTN 100”

Products and services will be enhanced to cover the targeted MRO industries of mining, steel manufacturing, oil andgas, machine tools, food processing and paper production. Plans are in place to strengthen and expand sales ofautomotive aftermarket products, such as the parts kit for trucks that was released in 2013, and the hub bearing
parts kit for passenger vehicles that went on sale from 2014. Agreements are already in place with numerous distributors in North America, and the main strategy will be to strengthen relationships with the major leading distributors.

The market has currently stagnated due to reasons such as political instability, however plans are in place to double
the current sales figures by intensifying sales and service activities.

A system will be developed to strengthen the partnership in place with NTN-SNR, to enhance engineering services tovisit customer worksites.

Japan

U.S.A.

CanadaFranceChina

Technical Service Units Active Around the World

Financial Section

Central and South American market

Korea

24

Feature “NTN 100” Manage Profitability

3 Structural Reform of the Driveshaft Business• Expand profits of the driveshaft business• World’s No. 1 customer satisfaction level for quality,
cost, delivery and technical aspects

Targets

Driveshaft Sales

As a result of efforts to increase sales of our Group’s driveshaft
business to expand market share, NTN has successfullyincreased not only net sales significantly but also the number ofleading car makers to whom we supply to. Furthermore, we havealso established production systems in demand areas so that we
can supply products to customers all over the world.
On the other hand, the rapid increase in share has led to
dropping selling prices. And with the rising prices of materials
and personnel expenses in recent years, the manufacturing costsof driveshafts are also on the upward trend.
One of the most important themes of “NTN 100” is expanding profits of our driveshaft business. Aiming to be “’NTN
driveshafts’ achieving World’s No. 1 customer satisfactionlevel,” we are committed to strengthen our infrastructure interms of quality, costs, delivery and technology and will reformbusiness structure.

(Billions of yen)

250

200

150

100

50

0

2001 2006 2011 2015

( Years ended March 31)

３ -1

Expand Profits of Driveshaft BusinessIn our company’s automotive business, the “NTN 100” endeavor targets improvement of the operating margin
from the present 4% to 6% in three years. Particularly important is the improvement of the profits of our driveshaft business, and out of many factors, we aim to focus efforts in reducing proportional costs and expanding
high value-added products.
To reduce proportional costs, we will further accelerate local procurement In addition, we will promote our near
net shape processing method which eliminates all unnecessary materials to the maximum and material reduction
measures which may even require changing parts design. In the future, we also hope to expand our lineup of highvalue-added products for premium cars including products with features such as high functions, high efficiency,
ultra-light weight, and ultra-high angle, improve product mix and improve the margin with increased profits.
On the other hand, we anticipate reduced selling price levels and increased fixed costs as a factor of
decreased profits. We will therefore continue efforts to control discount and raise the prices of low-profit items,
as well as pursue production efficiency by adjusting production load between production bases to enable use ofexcess man-hours, review production methods, and also reduce equipment costs by introducing new
manufacturing technologies.

Strengthen sales
Improve operating margin of driveshaft
price control
business by 3 points in 3 years
Exchange rates
Review design,materials, and method

Scale merits
Fiscal year ended
March 201525

Decrease invariable costs
Expand sales and improve mix

Sales pricelevel

Seek production
efficiency

Increased fixed
costs+ Approximately.
7 billion yen

Fiscal year ending
March 2018

NTN’s Vision

３ -2

Strengthen Global Quality Control and Supply System

Beijing NTN (China)

OKAYAMA WORKS(Japan)Guangzhou NTN(China)NTN FUKUROI CORP.
(Japan)NDI (North America)

NTE (France)
IWATA WORKS(Japan)Seohan-NTN(U.S.A.)

Taiway(Taiwan)

NMT (Thailand)

Unidrive (Australia)

NTN MANUFACTURING
DE MEXICO (Mexico)

NDB (Brazil)

Financial Section

NNMI (India)

Environmental Activities Supporting “NTN 100”

NTN-SNR Sibiu(Romania)

Xiangyang NTN (China)

CSR Activities Supporting “NTN 100”

NTN-AT (Germany)“NTN 100” Strategy

In recent years, quality of automotive parts has been drawing increasing attention. NTN’s driveshafts are important safetyrelated parts supporting the underside of automobiles. Given that they are directly related to human life, quality problems
must never occur. As the NTN Group’s production bases continue to expand all over the world, we will establish a quality
assurance system with consistent “Made by NTN” global standard.
In the U.S., local plants are lacking production ability to meet the sharply growing demands. Presently, we are able torealize stable supply by exporting products from Japan. However, we are considering reinforcing production capacity in
the U.S. based on future demand trends. To build up even more stable supply capacity, we are currently striving toincrease the capacity of production bases around the world. We are focusing efforts to achieve early stable operations ofour two new production bases in China and Mexico, and we will adjust production load between production bases
through these two bases.
In this way, by establishing a system which enables stable supply from anywhere in the world, production and delivery
time risks can be avoided. The construction of efficient supply systems is also effective for holding down investments.
Research and development systems are also important for promptly reflecting local needs in products. NTN believes thatin the future, there will be a need to build development systems in five regions in the world, namely the present Japan,
U.S., France, and China, added with other Asian region.
For products, we will work on developing our next generation driveshaft module and offering them in a series.
NTN is a manufacturer of both driveshafts and hub bearings. Making use of our strengths, we will line up a new seriesof module products that integrate hub bearings and driveshafts applying Electron Beam Welding (EBW) and Press
Connect Spline (PCS).

26

Feature “NTN 100” Manage Profitability

4 “Monozukuri” with Next-Generation Technology

Targets• Introduce innovative manufacturing technologies• Global standardization of “Monozukuri”• Strengthen global “Hitozukuri (personnel development)”

Today, the work environment is changing drastically around the world. The declining birth rate and aging
society continue to get worse in Japan, and personnel expenses are increasing in emerging countries where
production is increasing. Long-term plans are required to ensure a stable source of labor. As production of
the NTN Group’s bearings and driveshafts expand overseas. It is important to build a system that does notcause any quality problem.
Until now, the NTN Group has focused on “Hitozukuri (personnel development)” and worked on passing
on the specialist technical skills. To create a foundation for the next 100 years, plans under “NTN 100” include
introducing innovative manufacturing technologies, increasing cost competitiveness, reducing equipment
unit costs, shortening lead-times, compressing stock in process, and achieving energy and resource efficiency. A quality assurance system with a consistent “Made by NTN” global standard will be established for
global standardization of “Monozukuri”. Efforts will also be made to strengthen global “Hitozukuri” in order tospeed up a launch of mass-production at new plants as well as enhancing the supply system so that otherplants can respond swiftly if there is any type of change in demand.
The NTN Group will be innovating “Monozukuri” methods for the next 100 years.

4 -1

Develop and Introduce Innovative Manufacturing Technologies
Innovative manufacturing line
(Image)27

The first step of innovative manufacturing methods is the quick
introduction of Grow-Up lines. A Grow-Up line is a manufacturing linethat can expand (grow-up) from semi-automatic to automatic equipment machinery by combining transportation and robot technology.
These lines will be developed and rolled out to regions overseas.
Driveshafts will be manufactured with grinding-free or combinedmachining methods to streamline and centralize processing, while
precision joint technology such as electron beam welding (EBW), andnear net shape and other manufacturing techniques that reducematerials wastage to a minimum will be introduced where possible toreduce costs, increase yields and unify product models.
New mass-production technologies will be introduced for hub
bearings, including developing flexible production lines through themodularization of equipment and utilization of robots. This will allow
NTN to strengthen product capabilities, utilize facilities effectively, andrespond in a flexible manner to the employment environment inproduction regions.
For various bearing types, shortening the lead-time, compressing
stock in process and enhancing work on multi-product small-lot
production by incorporating processes that had been separated into
production lines, as well as introducing combined machining anddeveloping consistent production lines starting with materials.

NTN’s Vision

4 -2

Promote Global Standardization of “Monozukuri”

Mother plant

Globalstandardization

Deploy laterally

Overseas plant

Overseas plant

Overseas plant

Overseas plantContinual “Hitozukuri” to Increase Worksite Capabilities

Environmental Activities Supporting “NTN 100”

In addition to global standardization of “Monozukuri” the NTN Group will expand its training programs for technicians and engineers around the world using techniques and skills developed at “mother plants” in Japan to suit.
A system will be developed to pass down NTN’s specific “Monozukuri” and special machining techniques over along span to bases around the world, in addition to those in Japan.
Together with training globally-capable human resources, the NTN Group has also focused on providing
technical skills training to technicians and engineers working around the world, as well as implementing diversity.
As part of these efforts, NTN has organized the “NTN Technical Skills Competition” where young to mid-career
technicians and engineers of tomorrow from around the world compete against each other with great skills andshare NTN’s unique techniques and skills among them. The “Global QC Circle Convention” is also held where
teams that work to improve quality at group companies around the world are invited to Japan to present
improvement case studies and results of their activities.
The NTN Group will focus on making further improvement to these activities, and is also planning to expand
the “NTN Monozukuri School”.

CSR Activities Supporting “NTN 100”

4 -3

Deploy new
production
methods“NTN 100” Strategy

The NTN Group is developing new
standard systems for “Monozukuri”
and will roll them out at “motherplants” in Japan first to create
training programs and manuals.
These systems will then be deployedlaterally to overseas plants toestablish a quality assurance
system with a consistent “Made by
NTN” global standard as quickly as
possible for all products.

Financial Section

Global QC Circle Convention

NTN Technical Skills Competition28

Feature “NTN 100” Manage Foundation

5

Strengthen the Management Foundation

Targets • Ensure all NTN Group employees are aware of the “Corporate philosophy” as a

globally common code of conduct• Ensure compliance and strengthen efforts for a better approach to governance anddiversity as a global company• Contribute to local communities and environment conservation to become acompany admired throughout the region• Establish the "on local site with local materials by local personnel" system

As a result of proceeding with globalization over many years, the ratio of overseas sales of the NTN Groupfor the fiscal year ended March 31, 2015 was 73%, with overseas production and employee numbers
increasing to 51% and 66% respectively. With this increase, applying NTN’s code of conduct, the“Corporate Philosophy” to all employees around the world and transformation to the company where all
employees think and act for themselves is a major management topic.
Enhancing training for compliance by employees globally is also considered extremely important, while
training and globally capable human resources and encouraging more active roles to female employees inJapan is also a management issue of the NTN Group.
Targets of “NTN 100” include applying the “Corporate Philosophy” to all NTN Group employees as a
globally common code of conduct, and ensuring compliance, strengthening governance and providing abetter approach to diversity as a global company. Additionally, in the field of CSR activities that is of
growing importance, the NTN Group is focusing on contributing to local communities and environmental
conservation in all regions that it operates in to become a company admired throughout the region.

Strengthen control of the NTN Group
companies
The corporate philosophy is being instilled into the
NTN Group companies that are expanding aroundthe world. Employee training and follow-ups are
conducted globally by the CSR Headquarters, while
efforts are also being made to strengthen the internal
control system in every region around the world. In
Japan, the stewardship code of institutional investors
and corporate governance code of companies arealso being taken into account as part of ever increasing efforts to ensure the appropriate and timely
disclosure of information and transparency as a
global company.

Conserve the global environment andpromote social contribution activities
The NTN Group is already active in using windturbines and solar power generation, and will
promote “using natural energy” for both its businessdevelopment as well as utilizing inside the Groupthrough the development of products such ascompact wind turbines and micro hydro turbines.
To help reduce the Group’s environmental impact,
the entire global supply chain will be the focus ofenhanced management.

29

Strengthen risk management
Regarding various risks surrounding its business the
NTN Group will precisely manage risk prevention andtake prompt action when risk occurs.
More than simply risks to NTN, these are considered issues affecting the entire supply chain, and the
NTN Group is approaching this with the entire global
supply chain, including business partners such as
suppliers, as well as sectors related to logistics.

Train global personnel
In the past, employees were generally sent fromJapan to overseas, however a greater effort will bemade to increase employee interaction from overseas to Japan, as well between other overseas
regions. As a global company, training will bestrengthened for young personnel and management
personnel, regardless of nationality. The NTN Group
is aware that the number of women in management
positions is an issue in Japan, and is planning todouble the current 20 people to 40 in three years.
A diverse range of employees is vital, with people
with disabilities as well as different nationalities andgenders hired to increase diversity amongst theGroup’s human resources.

Feature “NTN 100” Manage Foundation

Strengthen the Financial Foundation000

ネットD/E
レシオ

1.40
1.30
1.20
1.10
1.00

500

000

500
0

2000

2005

自己資本比率:
30%以上

15%
1.27

10%

1.22

1.11 to 30% or more, reduce net D/E ratio
equity to capital ratio
5%
Targets • Improve
0
1.00
0.90
to 1.0 or less
0%
0.92
0.80
-1.1%
2010
2014
• Increase ROE 14% or-5%0.70more
0.60
10%• Achieve 30% dividend
payoutratio
10/3 11/3 12/3
13/3 14/3 15/3 16/3 17/3 18/3

(億円)

計画

5
2005

(Times)Net D/E
ratio

ROE
20

1.6

ROE (Left axis)
Net D/E ratio (Right axis)

ROE: 14%or more

1.37

15

1.27
1.11

10

-7.2%

1.00

5

0.92

1.4
1.2

1.11
10.5

1.0

7.2

0.8

3.0

Net D/E ratio:
1.0 or less

0
‒1.1

0.6
0.4

-5

0.2
‒7.2

-10

-7.3%

‒7.3

2010 2011 2012 2013 2014 2015 2016 2017 2018

0.0

( Years ended/ending March 31)

Financial actions to improve asset efficiency

Financial actions to improve net income to net sales

Returns for shareholders

Financial Section

The most important factor for improving net income to net sales is improving the net operating margin at each businesssector. The highly profitable aftermarket business will be expanded in line with the “NTN 100” business strategies. The
industrial machinery business is suffering from lower margins due to a slowdown in demand for applications including
construction machinery and agricultural machinery, with the low operating ratio of production plants leading to anincrease in fixed costs. Sales will be expanded over the next three years to raise the operating ratio of plants andimprove margins. In the automotive business, efforts are being made to focus on improving profits of driveshafts, whichis part of the “Manage Profitability” policy.
Standards for making investment decisions will be reviewed to improve capital efficiency. Investment decisions will bemade with a focus on priority fields in line with “NTN 100” strategies.

Environmental Activities Supporting “NTN 100”

The NTN Group is planning to reduce interest-bearing debt by approximately 60 billion yen during the three years of“NTN 100”. This reduction of 60 billion yen will come from the approximately 35 billion yen generated with improvements
to FCF over the three-year period, combined with the current balance of approximately 25 billion yen. Asset compression
will improve the current inventory turnover ratio of 3.8 to 4.5 to generate a large amount of FCF. To achieve this, theproper stock standards will be clarified for each plant, and a system capable of cross-functional flow will be established,covering each region and each business headquarters, as well as head office departments. Other portfolio assets,
including shares and other assets, will be sold off where possible to improve FCF further.
In addition to the reduction in interest-bearing debt a reduction in obligations for retirement benefits will also beenacted. During the three years of “NTN 100,” pension assets are planned to be built up by at least 7 billion yen. If FCF
is improved beyond planned figures or if funds acquired from selling off assets are greater than expected, a further
buildup of assets will be considered. Assets of 5 billion yen have already been built up at the end of March 2015.

CSR Activities Supporting “NTN 100”

The equity to capital ratio and net D/E ratio, which are
figures that indicate the soundness of the NTN Group’sbalance sheet, have tended to show poor results overthe past
several years. Returning the balance sheet to a2014
sound level is one of the targets of “NTN 100”. Various
measures will be implemented in order to achieve thesetargets, including strengthening of profit control andimprovement to asset efficiency.
Efforts will be made to improve the equity to capital ratio
to 30% or more, and reduce net D/E ratio to 1.0 or less.
A ROE of 14% or more will also be targeted with
better earning capacity, with sufficient free cash flow(FCF) to be generated in line with policies to achieve
30% dividend payout ratio.

3.0%“NTN 100” Strategy

15

10.0%

7.2%

計画

(%)

20

0

20%

1.37

計画

10

NTN’s Vision

6億円)

The NTN Group will provide ongoing long-term and reliable returns of profits to shareholders. Improvements to FCF will
ensure sufficient funds for dividends, and a 30% will be considered the baseline of dividend payout ratio. The dividends forthe fiscal year ending March 31, 2016 is planned to be 10 yen, however, we will aim for 30% dividend payout ratio swiftly.

30

Review of Operations

Aftermarket Academy Initiatives
NTN established the Aftermarket
Academy and runs technicalcourses for end users anddistributors with the aim ofincreasing sales in the aftermarket applications. Bearing professionals use their knowledge andknowhow to provide practicalsuggestions to resolve any
concerns and questions raisedby end users. Participants of theAftermarket
Applications

Increasing presence further in emerging markets tocater to a broader range of customer industries.

Results in the Fiscal Year Ended March 31, 2015

Net sales in the aftermarket applications were 112.4
billion yen, up 8.6 billion yen (8.3%) over the previous
fiscal year. During the year, demand for industrial
machinery aftermarket slowed in Europe due to theworsening economic situation in countries including
Russia and the Ukraine, however sales increased inJapan, China and Asia. Of particular note was theincrease in number of MRO (Maintenance, Repair andOverhaul) projects in Japan as a result of mobile activities, as well as an increase in technical services in China
and Asia leading to increased sales.
Operating income increased by 1.5 billion yen (8.5%)
to 19.2 billion yen thanks to the effects of increased
sales and positive exchange rate effects.

Overview of the Fiscal Year Ending March 31, 2016
Plans are in place during the fiscal year ending March
31, 2016 to expand business growth, particularly in theAmericas, where sales are anticipated for industrial
machinery aftermarket and automotive aftermarket. In
Asia, profits will be enhanced by increasing sales from
MRO projects and securing distributors.

31

course provided positive feedback, stating that “the course
was designed with the end
user’s worksite in mind, and it
was extremely valuable.” NTN
will continue to develop the
Academy’s course content, withthe aim of becoming a trusted
supplier through greater communication with customers.

Medium- and Long-Term Strategies

The NTN Group is targeting the world’s No.1 level ofcustomer satisfaction by responding to requirements in
the MRO business, in line with “Expand the Aftermarket
Business,” one of the strategies to “Manage Growth” inthe new Medium-term Management Plan “NTN 100”. In
addition to the strategy of “Enhance product lineup andshorten lead-time,“ efforts will be made to “Expand sales
for MRO demand” in growth markets and specificindustries, and the NTN Group will increase its brandpresence by steps including development of aftermarket
business in emerging countries as a way of taking amore active attitude to growth markets and specificindustries. The product lineup in the automotive aftermarket sector, including the parts kit, will be increased to
expand sales.
Major increases in sales are planned for the industrial
machinery aftermarket by strengthening partnerships withmajor distributors and automotive aftermarket in theAmericas market. A greater level of service will be provided
in the central and southern American region by building on
the partnership with NTN-SNR ROULEMENTS.
In Europe, aftermarket business has been developedin Russia, while sales will be boosted in Asia and China
by providing engineering support to major distributors,
as well as with MRO projects.

Comments of Director in Charge

NTN’s Vision

We are aiming for sales in the Aftermarket Business of 150 billion yen for the fiscal year
ending March 2018, which is in three years, based on the slogan “the world’s No. 1 levelof customer satisfaction with product lineup and engineering services”.
To achieve this goal, we will focus on expanding our engineering services, increasing
the product lineup and shortening lead-times. We will also expand the aftermarket
product lineup to develop a system capable of immediate delivery. We opened theAftermarket Academy and took other initiatives to better approach growth markets andspecific industries, and will aim to improve our service system and quality to better meetthe characteristics of regions and customers.

Fukumatsu Kometani
Executive Director

R

O

D

U

C

T

S
* Photos are cross-sectional models of products.

Steel

Sealed four row
tapered roller
bearings

Super large-sized
split sphericalroller bearings

Parts kit fortrucks*Extensive lineupof parts kits

Oil and Gas

MiningEnvironmental Activities Supporting “NTN 100”*

Sealeddouble row
taperedrollerbearings

Auto Parts

CSR Activities Supporting “NTN 100”

The rust guard
series sphericalroller bearings“NTN 100” Strategy

P

Financial Section

Bearing
units**
Angular contact
ball bearings

Sealed spherical roller
bearings

32

Review of Operations

Enormous Contribution to 50 Years of
Tokaido Shinkansen History*

JournalRolling
Bearings
for 0 series

On October 28, 2014, NTN received a “Tokaido Shinkansen’s
50th Anniversary Certificate ofAppreciation” from JR Tokai.
Tokaido Shinkansen has transported 5.6 billion passengers inthose 50 years, and during thistime, it has evolved enormously,
boasting safety of zero fatal
passenger accidents and reduction of energy consumption
during traveling by 51%.
NTN’s bearings have beenused in all successive generations of Shinkansens, from thefirst generation 0 series
launched in 1964 to the mostrecent model N700A. The journal bearing adopted by thelatest N700A is about 70%
lighter and 60% less volume
than that used in the first generation 0 model, contributing
enormously to the lightness andhigh speed of the train.
Our journal rolling bearings
for the first generation 0 series
Shinkansen have been designated as a “tribology heritage” by
the Japanese Society of Tribologists. We are the only bearing
manufacturer to receive thisrecognition.

* Photos are cross-sectional models of products.

*
Journal Rolling
Bearings for
N700A series

Industrial Machinery
Applications

Results in the Fiscal Year Ended March 31, 2015

Net sales in the industrial machinery applications were
109 billion yen, up 7.8 billion yen (7.7%) over theprevious fiscal year. Smooth growth of sales of products
for rolling stock and aircrafts in Japan and Europe iscontributing to the increased net sales. Amidst slumping
demands of construction machinery worldwide, momentary recovery of demands was seen in Americas.
Operating income doubled compared to the previous term by 3 billion yen (90.9%) to 6.3 billion yen
thanks effects of increased sales and positive
exchange rate effects.

Overview of the Fiscal Year Ending March 31, 2016

In the fiscal year ending March 31, 2016, sales are
expected to increase with the accommodation ofdemands for wind turbine in the Americas and increased
demands for high speed railway in China. We are also
forecasting robust growth for aircrafts and machine
tools. On the other hand, we are being careful with the
projections for construction machinery and mining
machinery, estimating sales and profits to be generally
staying flat due to the sluggish demands worldwide.

33

We are committed to expanding
business in new business areas.

Medium- and Long-Term Strategies

For the industrial machinery market, we are committed
to expanding business in new business areas in our New
Medium-term Management Plan “NTN 100”.
Presently, we are focusing on the development of
products for robot related products, and rushing with
developments of technologies such as linear modules,
which have already been globally applied, and compact
ball screw actuators, to be applied in this area.
Natural energy making use of innovative higher
efficiency wing technology is also a very promising field.
NTN’s products have dramatically enhanced power
generation efficiency compared to conventional products, and with these products, we hope to contributesignificantly to the spread of natural energy by providing
such products to regions requiring small energy networks called “micro-grids”, and realizing the recycling ofenergy using wastewater from plants, etc.

Comments of Director in Charge

NTN’s Vision

In the next three years, we are aiming to achieve net sales of 120 billion yen and operating income of 7.5% for industrial machinery. To achieve these targets, we are particularly
focusing our efforts to reinforce production capacity and expanding sales for windturbine, rolling stock, machine tools, and aircrafts which have potential for growth.
New businesses which we are working hard on include the early commercializationof “compact wind turbine”, establishment of the sales system of “linear modules”,
development of “CMS” technology, and establishment of sales system.
To build the next 100 years of NTN, we hope to reform our business department by
not only focusing on our bearing sales but also by providing services and solutions.

Kazuki Kawashima
Director

R

O

D

U

Construction
machinery bearings

C

T“NTN 100” Strategy

P

S

Agricultural
machinery bearings

Applications for resource mining andcivil engineering

Contributes to food demand withhigh quality products

Applications for jet engines aroundthe world

Supports industrial machinery robots*
Wind turbine
bearings*

Rolling stock
bearings

Meets growing demand in renewableenergy and other areas

Environmental Activities Supporting “NTN 100”

Supports safety of the world’s
high-speed railways*
Machine tool
bearings
High-precision support for highspeed rotation

Hydrodynamic
bearings
Used also for HDDs and thin
fan motors

CSR Activities Supporting “NTN 100”

Aerospacebearings

Gearbox bearings

Office equipment
bearings
Supports smooth operation of copiersand multifunctional printers

Medical equipment
bearings
Used for CT scanners andartificial hearts* Photos are cross-sectional models of products.

For machine tool main spindles
High Speed Angular Contact Ball Bearing HSE-New T2 TypeMachine tool main spindles are growing higher and higher in speed. NTN has developed a
new product which uses high melting point polyamide resin as the material of the retainer toenhance strength and minimize heat produced by the contact between the retainer pocket
and rolling element during high-speed rotation. The new product also reduces heat generation on the shaped surface by reviewing the shape of the retainer pocket and optimizing
contact between the rolling element and retainer. Compared to conventional products, thisproduct has improved high-speed rotational performance by as much as 50%, and enables
the use of polyamide resin retainers in high speed ranges for which phenol plastic cages
were used to date.

*Financial Section

New
Products

34
16

Review of Operations

NTN’s “Mechanical Clutch Unit (MCU) for Next-generation
Steering” wins 2014 “CHO” MONODZUKURI Innovative
Parts and Components Award*

Mechanical Clutch Unit (MCU) for
Next-generation Steering

In 2013, NTN released on themarket the “Mechanical Clutch
Unit (MCU) for Next-generation
Steering”, adopted for the
Direct Adaptive Steering developed by Nissan for the first timein the world. The direct adaptive
steering transmits the driver’s
steering actions to the tires via
electric signals, thereby allowing quick and accurate steering
since there are no elements
mechanically connecting thesteering and tires at all times.
NTN’s Mechanical Clutch
Unit (MCU) for Next-generation
Steering contributes to therealization of a backup mechanism during malfunctions inwhich the Direct Adaptive
Steering cannot sustain its
functions. A compact structure
combining an electromagnetic
clutch and roller clutch, whena malfunction is detected,
power to the electromagnetic
clutch is turned off and theroller clutch is instantaneously
connected to mechanicallytransmit steering input to thetires.
This product won the Automobile Parts Award during the2014 “CHO” MONODZUKURI
Innovative Parts and Components Award hosted by the
Nikkan Kogyo Shimbun, Ltd.

* Photo is cross-sectional model of product.

Automotive Applications
Results in the Fiscal Year Ended March 31, 2015

Net sales of the automotive applications were 480.5
billion yen, up 46.6 billion yen (10.7%) over the previous
fiscal year. Sales increased both in the Americas andJapan due to the smooth automotive demands in North
America. Sales in Asia also increased with the increasein automobile production in China and start of new mass
production in India.
Operating income increased 6.4 billion yen (52.9%)
compared to the previous term to 18.4 billion yen due tofactors including the effects of increased sales,
decreased proportional costs, and exchange-rate
effects, despite an increase in fixed costs due toincreased burden on production lines resulting fromhigher sales in the Americas.

Overview of the Fiscal Year Ending March 31, 2016

In the fiscal year ending March 31, 2016, demands for
NTN’s driveshafts are expected to grow and exports
from Japan should also continue to be brisk thanks tothe continued robust demands in North America. In Asia,
we are hoping that sales of NTN’s products will increase
with the increase in the number of cars sold with thelaunch of new proposals by Japanese, European, andU.S. car companies, despite the risks of the Chinese
economy slowing down.

35

Committed to wholesome andsound business growth

Medium- and Long-Term Strategies

As for efforts for the automotive applications, NTN will
strive towards the continued development of our automotive business based on the three pillars of our New
Medium-term Management Plan “NTN 100”, which are“Improved Brand Value”, “Focus on Growth Areas”, and“Business Development in New Areas”.
To “Improve Brand Value”, we will differentiate ourselves from other manufacturers by developing products
and providing services that accurately reflect the needsof users.
As for “Focus on Growth Areas”, we will invest the
optimum business resources based on clear businessstrategies by customer, region, and product, andenhance quality and quantity by maximizing output.
In “Business Development in New Areas”, our aim is
not only to extend the technologies that NTN has cultivated, but we will merge new technologies and innovative ideas, and develop business in new areas.
By carrying out these policies soundly and reforming
automotive business to one that is profitable, we willachieve operating income of 6% in the fiscal year ending
March 31, 2018, which is the last year of “NTN 100”.

Comments of Director in Charge

NTN’s Vision

With the slogan “Volume Sales to Value Sales”, we will shift the business policy of ourautomotive business from a business that focuses on expanding sales scale to one
that focuses on profits. We will promote reforms from mass development style todevelopment proposition type business, aiming to achieve net sales of 530 billion yen
and operating margin of 6% in three year, in the fiscal year ending March 31, 2018.
To achieve these targets, we will not only strengthen quality, cost, delivery deadline,
and technology, but will also differentiate ourselves from other manufacturers bythinking and acting from the customers’ standpoint. We will provide innovative products and services to enhance customer satisfaction and heighten NTN’s brand value.

Hideaki Miyazawa
Managing Director

R

O

D

U

Transmission

C

T“NTN 100” Strategy

P

S

Steering

Seat*

Constant-velocity
joint for steering

Clutch for seat
lifterBrake
Tapered roller
bearings

Thrust needle
roller bearings

Low TorqueSeal Ring

CVT
Ball screw drive
module for electric
hydraulic brake*

Hollow ball screwunit

Hub bearing

Engine, accessories

Wheel applications*

Auto tensioner
unit*

Needle roller
bearings forrocker arm

Low section highstrength press
pulleyEnvironmental Activities Supporting “NTN 100”*

CSR Activities Supporting “NTN 100”*

Driveshafts* Photos are cross-sectional models of products.

EBW Driveshaft

Automobile manufacturers are shortening the development
time of new cars to meet diversifying market needs. The EBW
driveshaft developed by NTN is a highly reliable driveshaft
realized in a short development lead time by standardizing thein-board outer wheel (which had been specially designed andmade for every car model to date) by size and setting the cup
as a standard product, as well as welding the individuallydesigned stem (axis) according to model by electron beam.

Outer ring cup section (standard design)

Stem section (individual design for each model)

Welded section: Electron Beam Welding

Financial Section

New
Products

Driveshaft (entire unit)

36

CSR Activities Supporting “NTN 100”Governance/Compliance
Strengthening Corporate Governance
NTN is aiming to become “A company where all
employees around the world behave in accordance withthe corporate philosophy, comply with regulations andcontribute to the local community” as part of “Our vision”
raised in the new medium-term management plan
“NTN100,” and is working on enhancing corporate
governance to achieve this goal.

Philosophy and System of Corporate
Governance

NTN makes the implementation of highly efficient
corporate governance a top management priority andwe build systems that make management more efficientand robust.
We also strive to communicate with shareholders,investors, and other stakeholders by providing information in a prompt, accurate manner. This ensures moretransparent management.

Corporate Governance Structure
Shareholders’ Meeting
Assigns /Removes

Board ofCorporate
Auditors

Assigns/Removes

Assigns/Removes

Accounting
Auditors(Audit firm)

Board of Directors

AuditsCSR
Committee

Risk Management
Committee

Compliance
Committee

Fair Trade Monitoring
Committee

Business Strategy
Committee
Executive
Committee

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

CSR Committee
The CSR Committee oversees various policies aimed at
effectively implementing CSR activities.

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

Compliance Committee
Oversees and provides advice for taking a preventative
approach to developing internal rules, organizing training
and educational activities, and monitoring activities for
global compliance risks other than those related to theJapan Antimonopoly Act (Antimonopoly Act) and the Act
against Delay in Payment of Subcontract Proceeds, Etc.
to Subcontractors (Subcontracting Act).

Executive Committee
NTN introduced the Executive Officer System in the fiscal
year ended March 31, 2005 to enable swift decisionmaking and business execution. Reviews of monthly
performance are conducted by the Executive Committee,
comprising Directors and Executive Officers.
Corporate Auditors
NTN has four corporate auditors, two of who arestanding auditors (with three of the four being outside
auditors). The auditors are responsible for auditing theperformance of duties by members of the board.
Auditors attend board meetings and express theiropinions as part of their efforts to maintain and improve
the transparency and fairness of the Company’s
management supervision system.

37

Risk Management Committee
Identifies and analyzes the various risks that the NTNGroup faces, and develops measures for preventing andmanaging those risks.

Fair Trade Monitoring Committee
Chaired by the NTN President, the committee is focusedon comprehensive compliance with the Antimonopoly
Act and Subcontracting Act, and exerts practical control
to ensure fair-trading by providing advice regarding
training and educational activities.

NTN’s Vision

Continuously Strengthening
Management Auditing Functions

Board of Director Evaluations

NTN defines compliance as not only abiding by laws andregulations, but also complying with all social norms andrules, and operates a system that ensures thoroughcompliance on a global level.

A New System for ThoroughCompliance (Business Ethics)
Establishment of CSR Headquarters
NTN recognizes that proper compliance is one of the mostimportant issues to address, and is improving systems that
ensure compliance with regulations and laws.
In April 2014, departments that covered efforts related
to corporate social responsibility (CSR Department, Legal
Department and Fair Trade Promoting Department) wereconsolidated to establish the new “CSR Headquarters”
that organizes global activities and ensures that theentire NTN Group maintains compliance and fulfills its
corporate social responsibilities.
Within the CSR Headquarters, the CSR Department
chiefly covers risk management, the Legal Department
covers compliance and the Fair Trade Promoting Department ensures compliance with the Antimonopoly Act,

Financial Section

NTN has until now focused on strengthening governance, however has taken the Corporate Governance
Code that was formulated in June 2015 as an opportunity to evaluate the performance of the Board of
Directors via third parties with the aim of further
increasing the effectiveness of the Board of Directors andto build on NTN’s corporate value.
The Board of Directors takes the results of these evaluations to further build on the areas covered by theboard, and to develop and implement policies that thedirectors and auditors can take an active role indiscussing and contributing to.

Furthering Compliance
Environmental Activities Supporting “NTN 100”

The upper limit of compensation for officers is voted onat the General Meeting of Shareholders, and thecompensation and bonuses for directors are decided onby the Board of Directors based on its regulations.
Statutory auditors negotiate their compensation. NTN
has no system of retirement benefits.

In line with the basic framework for internal control as
outlined in “On the Setting of the Standards and PracticeStandards for Management Assessments and Audits
Concerning Internal Control Over Financial Reporting(Council Opinions),” published by the BusinessAccounting Council, NTN has developed a basic policy
for the structure of internal control. Based on this policy,
we have made developing and implementing an internal
control system a top priority of our risk management andcompliance.
The Internal Audit Department is responsible forinternal audits, and has been established as an independent auditing organization to audit business execution
throughout the Company.
It also runs various initiatives in the form of project
activities in order to strengthen the global compliancesystem. To further enhance internal control throughout
the NTN Group, the Internal Audit Department, overseas
offices of the General Manager and auditors at subsidiaries in Japan work together to audit subsidiaries andfocus on strengthening internal control.

CSR Activities Supporting “NTN 100”Compensation Based on Regulations

Creating and Implementing Systems is
a Top Priority“NTN 100” Strategy

NTN employs a corporate auditor-based governancesystem in which three of the four corporate auditors arefrom outside the company. External corporate auditors
bring specialized knowledge in areas such as finance,
management, and law, and they conduct audits incollaboration with in-house standing statutory auditors
and the Internal Audit Department.
The Board of Directors, which includes two outside
directors, makes decisions on important matters andoversees business execution, and corporate auditors sit on
the Board of Directors to give their opinions. In this way, we
strive to maintain and improve transparency and fairness of
the Company’s management supervision system.
All external board members (5) are designated andregistered as independent board members in accordancewith the regulations set in place by the Tokyo Stock
Exchange.
We also employ the Executive Officer System toensure swift decision-making and business execution.
The Board of Directors, based on set regulations,
makes decisions on the selection and dismissal of representative directors and directors with special titles, aswell as the designation and cancellation of duties
delegated to directors. After director candidates are
decided on at the Board of Directors meeting, they arenominated and voted in at the General Meeting of Shareholders. This ensures transparency and fairness.

Internal Control

38

CSR Activities Supporting “NTN 100”and all three departments work together closely to
implement various policies to ensure that NTN fulfills its
corporate social responsibilities.

CSR Headquarters

CSR Department

Legal Department

Fair Trade
Promoting Department

Risk management

Compliance

Compliance with
Antimonopoly Act

Internal Control Section Established at Five
Overseas Offices of the General Manager
NTN established an Internal Control Section at each ofits five overseas offices of the General Manager with theaim of developing and enhancing a system for ensuring
compliance at its group companies located overseas.
The Internal Control Sections cooperate with therelevant departments of the CSR Headquarters for each
topic related to the company’s social responsibility to
implement policies for each region and country to suitthe particular circumstances and characteristics there.
This system allows the policies developed by NTN for
corporate social responsibility to be shared globally
between group companies, while also implementing individual policies on a global scale.
In January 2015, the relevant staff from each region
gathered in Japan for the first CSR Global Meeting aspart of a system to share efforts regarding compliance, a
key factor behind CSR, by sharing various types of information, creating common rules, running training andeducational sessions and monitoring progress.

Establishment of Compliance Committee
A new Compliance Committee was established in April
2015 to further strengthen systems for ensuring compliance on a global scale throughout the entire NTN Group.
This new system ensures compliance by placing a keyemphasis on risk management. Compliance risks thathave the risk of violating regulations under key risk
management items that were identified and defined by
the Risk Management Committee are handled solely by
the Compliance Committee. These risks are addressed
after assigning them an order of priority, the results ofwhich are reported to the Board of Directors.
The Risk Management Committee has taken recent
global trends to stem corruption as well as changes in
the legal framework evidenced by efforts of authorities ineach country to regulate bribery and improve detection
to define violations of laws related to bribery as a key
management risk that ranks second to violations of the
Antimonopoly Act. The Compliance Committee gathers
information on potential internal risks including thoseoutlined above, and committee members coveringbusiness areas with a high level of risk propose andimplement plans for developing rules, running training
and educational activities and monitoring as part of thedepartment designated with covering such tasks.
This process is coordinated seamlessly with theInternal Control Section at each of the five overseas
offices of the General Manager to ensure a thorough levelof compliance, not only at NTN departments andbusiness sites, but also at all group companies, eventhose located overseas.

Collaborating System with Internal Control Sections
Europe/South America
Internal Control Section
Office of General
Manager - Europe& South America Region
Subsidiaries

India
Internal Control section
Office of General
Manager - India& West Asia Region
SubsidiariesJapan
CSR Headquarters
Divisions

Subsidiaries

Information Exchange
Human Resources
Interaction

ASEAN
Internal Control Section
Office of General
Manager - ASEAN& Oceania Region
Subsidiaries

39

North America
Internal Control Section
Office of General
Manager Americas Region
Subsidiaries

China
Internal Control Section
Office of General
Manager China Region
Subsidiaries

A scene form a Compliance Committee MeetingNTN’s Vision

General Training and Educational Activities forComplianceHelpline
We have set up internal and external helplines to offer
consultation on matters related to compliance.
NTN’s “Helpline Management Rules” were revised in
April 2015 based on these systems to ensure compliance, so that calls to the helpline related to compliancecould be reported to the Compliance Committee andcalls related to competition laws (Antimonopoly Act,
Subcontract Act) to the Fair Trade Monitoring Committee.
This system allows information included in whistle-blowing
to be utilized by both committees.
In addition to the helpline, we have also arranged adirect number for consultations with the Fair Trade
Promoting Department.

Compliance/Helpline Management System
Chief Management Officer
Director in charge ofLegal Department

Chief Management Officer
Director in charge ofLegal Department

Chief Management Officer
President

Compliance Committee

Helpline
Management Department
Legal Department

Fair Trade
Monitoring Committee

External Help DeskNTN Group company executives, employees, customers, etc.

Financial Section

Internal Help Desk

Environmental Activities Supporting “NTN 100”

Legal Information

CSR Activities Supporting “NTN 100”

Learning Compliance“NTN 100” Strategy

In addition to efforts to address compliance risks undertaken by the Compliance Committee, training and educational activities are continually being conducted at all
business sites throughout the NTN Group with the aim of
improving broad-ranging and generalized knowledge andawareness related to compliance. At business sites andgroup companies in Japan, compliance promotion activities supervisors are in mainly in charge of creating
educational plans and holding training by level, topic orother categories for executives and all employees.
Self-learning by distributing textbooks and comprehension tests through e-learning are also held every year
for employees promoted to project managers in particular, to ensure thorough compliance throughout theworkplace. To ensure that this knowledge is ingrained,
employees are required to repeat these tests until theyreach a passing level. The latest information is also
provided via the intranet compliance database and legal
information database, which outlines the latest trends

related to compliance and various regulations, as well ascase studies on violations of such regulations, all as ameans of improving awareness amongst employees.
A yearly attitude survey has also been organized fromthe fiscal year ended March 31, 2015 to assess theresults of training and educational activities related tocompliance. The results of this survey will be applied tobetter expand on promotional activities.
Group companies overseas are also focusing theirefforts on compliance training. This is mainly covered by
the Internal Control Sections, which conduct training andeducational activities to suit regional characteristics andrequirements while conforming to NTN policies.

40

CSR Activities Supporting “NTN 100”

NTN’s Efforts to Comply with the Antimonopoly Act
The NTN Group recognizes that proper compliance is
one of the most important issues to address, and is
improving systems that ensure compliance with regulations and laws.
In June 2012, NTN and former executives received
an indictment filed by the Tokyo District Prosecutors
Office (TDPO) on suspicion of having violated Japan’s
Antimonopoly Act in relation to the domestic sale ofbearings. In March 2013, we received a cease anddesist order and surcharge payment order (for ¥7.231
billion) from the Japan Fair Trade Commission (JFTC).
Because the assertions by the JFTC and TDPO are
greatly different from NTN’s views of the facts, NTN
requested for resorting to hearing procedures
beginning in September of the same year. The trial
began in the criminal court that December, and NTN
and former executives were sentenced by Tokyo
District Court in February 2015. NTN and former executives were unhappy with this decision and lodged an
appeal, with the case currently pending in the Tokyo
High Court.
Overseas, NTN was fined by authorities in Europe,
Singapore and China for violating competition laws.
In March 2015, NTN received notification from the
Antitrust Division of the U.S. Department of Justicestating that NTN and American consolidated subsidiaries were no longer subjects of grand jury investigation into the activities of companies in the bearing
industry. In November 2011, NTN’s U.S. consolidated
subsidiaries received subpoenas from the Antitrust
Division requesting information regarding bearing
transactions to be handed over, to which we cooperated with their investigations. Meanwhile, consolidated
subsidiaries in Korea and other regions have been
subject to investigations by the authorities in thoseregions. NTN and its consolidated subsidiaries in the
U.S. and Canada are defendants in a number of classaction suits for suspected price-fixing of bearing sales
with other businesses.
We at NTN express gratitude to all relevant personnel
including shareholders for their understanding and theirprofessional efforts during the past period.
The NTN Group will continue strengthening
systems in place to ensure thorough compliance41

with laws and regulations, social norms, ethics,
and in-house regulations on a global basis, tofurther drive business activities through fair andsincere competition.

(1) The construction of systems toensure compliance with the
Antimonopoly Act

To ensure compliance with the Antimonopoly Act andthe Subcontracting Act, activities are chiefly
conducted by the “Fair Trade Promoting Department”
under the supervision of the “Fair Trade Monitoring
Committee.”
The CSR Headquarters that we established lastyear covers the efforts of departments related tocorporate social responsibility, including the Fair Trade
Promoting Department, and ensures that the entire
NTN Group complies with relevant regulations andimplements social corporate responsibility. It also
works more closely with the “Internal Control
Sections” established within each overseas office ofthe general manager to develop and enhance compliance systems overseas.

(2) Continuous compliance activities
for the Antimonopoly Act

The Fair Trade Promoting Department covers internal
training, and also self-audits related to compliancewith the Antimonopoly Act and mandatory applications submitted in advance to prevent and monitor
contact with competitor companies. This systemallows the overall state of contact with competitor
companies to be monitored.
Overseas, we work with the Internal Control
Section in each region to develop systems for training
and advanced applications, as well as self-auditsorganized by each region, and we are redesigning thesystem to ensure compliance with the relevant
competition laws in each region.
The NTN Group will use these various systems
to conduct continuous education and awarenessactivities that strengthen overall control over ourcompliance.

NTN’s Vision

Pursuing Risk Management

Risk Management Flow Chart

Philosophy and System of Risk
Management
System Implementation in line with Basic
Policies and Management Rules

Emergency measures

Risk management planningAn emergency
incident occurs

Implementation of measures

Determining the level

Checking implementationof measures
Evaluation of risk
management effectivenessEstablishment ofCentral Task Forceand Response

Response
by department
in charge

Measures to prevent recurrence“NTN 100” Strategy

NTN has developed the “Risk Management Policy” andestablished “Risk Management Rule” which set out thesystems and standards to follow in case of an
emergency. Based on these policy and rule, we havecreated an integrated system that prevents risks fromoccurring, and in the event that they do occur, outlines
methods to handle them swiftly.

Preventative measures

Setting Key Management Risks to Handle with
the PDCA Cycle

Risk Management Policy

1 We shall make an effort to eliminate or reduce thevarious risks to the stakeholders, such as customers,
suppliers, shareholders, investors and local communities, and executives and employees.

2 We shall maintain the risk management system for prompt

and proper measures against the risks and implement thecompany-wide and general risk management.

assessment and risk measures according to the risk
management plan and take proper preventive measures.

4 In the case of risk arising (emergency), we shall keep tominimize the damage expansion by initial risk countermeasures including the proper information transfer toinside and outside the Company.

5 We shall make an effort to keep and develop the stable

Risk Matrix (Approach to risk mapping)

ImpactHighbusiness by monitoring the proper structure and implementation of the risk management on a daily basis.

Identify key
management
risks

Environmental Activities Supporting “NTN 100”

3 We shall implement the risk ﬁndings, risk analysis, risk

We established the Risk Management Committee as anadvisory body for managing risk. The committee identifies risks that need to be addressed, and focuses onverifying plans and following up on performances for “keymanagement risks” in particular.
In April 2014, the committee proposed amending key
management risks based on the results of a risk analysis
survey it conducted. At the December 2014 session, thecommittee outlined risks and their degree of impact andfrequency based on the risk map, and identified risks
that required intensive management efforts. The betterverify the approaches made to address the risks andfollow up on risk measures taken, the committee set
goals to be achieved by each promoting.

CSR Activities Supporting “NTN 100”

NTN Corporation hereby establishes the basic policy of
NTN Group to precisely manage the risk prevention and toquickly respond at the outbreak of various risks (i.e., theevents that may prevent the accomplishment of businesspurpose and the operation of business) surrounding thebusiness of NTN Group.

Risk Management System<Risk Management Committee>

Chief Management Officer

Chairman:
Chief Management Officer
Vice-Chairmen: Risk Management Manager
Emergency Management Manager
Members:
Manager of the Promoting Division(Director in charge ofrisk management)

Low
Low

High

Frequency
Risk Management
Department(CSR Department)

Emergency Management Department(General Affairs & Environmental
Management Department)

Emergency
Management
CenterFinancial Section

Board of Directors

Promoting Divisions

42

CSR Activities Supporting “NTN 100”

Key Management Risks(Fiscal Year Ended March 31, 2015)● Violation of Antimonopoly Act● Violation of bribery-related laws, fraudulent
accounting, violation of labor-related laws

● Damage caused by large-scale disasters

such as earthquakes, eruptions and tsunamis● Leakage of R&D information
Addressing Key Management Risks[Violation of Antimonopoly Act]
Violations of the Antimonopoly Act are still considered
key management risks, and the Fair Trade Monitoring
Committee implements activities aimed at compliance on
a global scale.

[Violation of bribery-related laws, fraudulent
accounting, violation of labor-related laws]
With recent global trends for more stringent regulations to counter bribery to stem corruption, violationsof laws related to bribery have been set as a key
management risk that ranks second to violations of
the Antimonopoly Act.

Fraudulent accounting and violations of laborrelated laws have also been defined as key management risks with the view to preventing fraudulent
accounting that can lead to a wide range of problems,and maintaining and making improvements for appropriate work environments.
The Compliance Committee implements various
specific policies related to compliance to address thesekey management risks.

[Damage caused by large-scale disasters suchas earthquakes, eruptions and tsunamis]
Interruptions to business sites due to large-scaledisasters has been defined as a key management risk,
and the Risk Management Committee implements
various activities to prevent damage, minimize the effects
of damage and recover quicker with the aim of keeping
employees safe and maintaining supply to customers.

[Leakage of R&D information]
NTN makes efforts to prevent leakage of information
by enhancing data management and access authorization rights, as well as providing comprehensive
internal training.
The Information Security Committee works together
with numerous departments to ensure proper
management of drawing plans, including those ataffiliated companies, and management of confidential
sales information.

From the Chief Management Officer (Director in charge of Risk Management)
Risk management is covered by the newly organized CSR Headquarters. Risks thatare being managed cover a wide range of fields from natural disasters and environmental issues to unauthorized or illegal behavior by individual employees. In addition to
our business sites in Japan, NTN is approaching these risks from a global perspectivewith overseas subsidiaries following the company’s expansion into other regions.
Measures that have been screened and approved by the Risk Management
Committee for addressing risks and any subsequent achievements are also
reported to the Board of Directors as a way of sharing this information throughout
the entire NTN Group.
We will be developing Business Continuity Plan/Management (BCP/BCM) thatcovers a wide range of risks, while also implementing policies to address key
management risks, and will be finalizing effective plans as soon as possible toachieve each goal of preventing damage, minimizing the effects of damage andrecovering quicker.

43

Keiji Ohashi

Managing Director

Pursuing CSR Management
CSR as part of corporate philosophy
framework

Corporate Philosophy System
Basic corporate values.
Show intended
direction of
corporate activities.

Basic Policies

Employee Codeof Conduct
Guideline to encourage
aggressive actions

1. Policy on Control of
the Company
2. Financial Reporting Policy
3. Risk Management Policy
4. Internal Control Policy
5. CSR Policy
6. Policies on decisions
to dismiss or not rehire
accounting auditors
7. Environmental Policy

Business Codeof Conduct
Guideline forcompliance actions

Codes of Conduct Developed and Established
Even at Overseas Group Companies
Codes of Conduct have been developed for overseas
group companies that match that particular region, andthese are distributed to all employees. In China,
employees must carry a card that outlines the CSR
Policy, Employee Code of
Conduct, and Business Code of
Conduct. We will be adopting
similar initiatives soon in Japanand other countries.
Pocket Card (Chinese)

CSR Promotion Structure
CSR Department and CSR Committee Lead
Activities
In 2006, we embarked on our CSR activities by establishing the “CSR Management Rules” and the CSR
Department.

CSR Management System

Codes of Conduct Established Based on the
CSR Policy

CSR Management Department

CSR Committee

CSR Department

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

Subcommittee for designated topics (as required)

CSR Policy
1 Legal compliance/Policy for activities: We shall

5 Employees: We shall value the individuality and diversityof our employees, work to create a safe and pleasantwork place, and achieve comfort and prosperity.
6 The environment: With ample consideration topreserving the global environment and protecting theecosystem, we shall work toward the creation of asustainable, 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 ofcourse, obey all international rules as well as the laws ofeach country and each region that we operate in; weshall also respect local cultures and practices andcontribute to local development.

Financial Section

comply with laws and regulations, endeavor to engage infair competition, and carry out our business activities inan honest and ethical manner.
2 Customers: We shall strive to develop new technologies and new products, as well as to provide safe andreliable 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 shallwork to develop this corporation and increase stockholder return, while at the same time communicating
broadly with society and actively disclosing information.

Environmental Activities Supporting “NTN 100”

Corporate Planning
Department

Legal Department

General Affairs
Department

Personnel Department

Environmental
Management Department

Quality Management
Department

Intellectual Property
Management Department

Procurement Department

Sales Management
Department

Managing Departments
CSR Committee Members

NTN developed the “Employee Code of Conduct,” which
set out guidelines for conducting CSR activities, and the“Business Code of Conduct,” which all officers andemployees must abide by.
These are set forth in the “CSR Guidebook” and the“Pocket Card” that all NTN Group employees in Japan
carry with them, so that they can put CSR into action
during their daily tasks. New employees are provided withtraining when the guidebook and card are handed out.

Chief Management Officer

CSR Activities Supporting “NTN 100”

Corporate
Management
Policies

Corporate
Philosophy

These codes are read out aloud during morning
meetings and other opportunities, to ensure that
employees are fully aware of them.

“NTN 100” Strategy

NTN’s corporate philosophy is “We shall contribute tointernational society through creating new technologies
and developing new products.” To achieve this philosophy, NTN developed the “CSR Policy” in June 2006 as
one of “NTN’s Basic Policies.”

NTN’s Vision

Governance/CSR Management

44

CSR Activities Supporting “NTN 100”

The CSR Department was amalgamated with the Legal
Department and Fair Trade Promoting Department in April
2014 to form the “CSR Headquarters” with the aim ofenhancing CSR activities, including matters related tocompliance. The CSR Department covers CSR activities
conducted by the NTN Group, and is the department incharge of implementing efforts to improve CSR. The “CSR
Committee” is chaired by the head of the CSR Department
and made up of the heads of relevant divisions. It systematizes CSR activity plans and CSR policies, and it deliberates on CSR issues that span all divisions.
We implement CSR activities throughout the entire
NTN Group in Japan by appointing CSR managers andstaff in charge of CSR at all of our business sites and at
the NTN Group companies in Japan. The NTN Group

sets quantitative goals (KPI) for various CSR topics as ameans of implementing activities.

Employee Code of Conduct
1 We respect social ethics and act as good members ofsociety.

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 thevitality of our work site.

5 Management and supervisors in particular, as faces of

the corporation, improve their qualifications, makeefforts to develop individuals, always take care ofsafety and show leadership.

Business Code of Conduct
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 andcompany 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 andprivate matters

22 Confronting harmful social forces

23 Proper utilization of our information

system24 Prohibition of insider trading

25 Self-restraint regarding entertainmentand gifts

26 Lawful donations/political donations

CSR Global Management
CSR Global Meeting

The first CSR Global Meeting was held in January 2015 to build a framework for implementing
various CSR-related activities on a global scale. The plans and performances of each region
were shared at the meeting, together with the policies from Headquarters and information onplans. To ensure better efficiency and standardization, we decided on a number of initiatives,
including translating Japanese guidebooks and other materials into English, selecting
supervisors for each region, and building a database for sharing information.

Participation in “United Nations
Global Compact”

In 2015, NTN endorsed (joined) the United Nations
Global Compact, an international initiative for developing a global framework for sustainable worldwide
growth with the aim of becoming a company trusted
on the international stage.

45

A scene from the first CSR
Global Meeting

The Ten Principles of the United Nations Global Compact
Human Rights: Principle 1: Business should support and respect the protection ofinternationally proclaimed human rights; andPrinciple 2: make sure that they are not complicit in human rights
abuses.
Labour:Principle 3: Business should uphold the freedom of association and theeffective recognition of the right to collective bargaining;
Principle 4: the elimination of all forms of forced and compulsory
labour;Principle 5: the effective abolition of child labour; andPrinciple 6: the elimination of discrimination in respect of employment
and occupation.
Environment: Principle 7: Business should support a precautionary approach toenvironmental challenges;
Principle 8: undertake initiatives to promote greater environmental
responsibility; andPrinciple 9: encourage the development and diffusion of environmentally friendly technologies.
Anti-Corruption: Principle 10: Businesses should work against corruption in all its forms,
including extortion and bribery.

NTN’s Vision

Focus

Stakeholder Dialog

Participants
Stakeholders
Katsuhiko Kokubu
Yoko Hiyama
Kazuhiko Shiratori

Certified Public Accountants / Representative Director/
Institute for Environmental Management Accounting

NTN Participants
Hiroshi Nakano
Director and General Corporate Manager, CSR Headquarters
Toshiyuki Matsutani General Manager, General Affairs & Environmental Management Department
Yoichiro Mochida
General Manager, CSR Department, CSR Headquarters

Yoko Hiyama

Kazuhiko Shiratori

Eriko Nashioka

Hiroshi Nakano

Toshiyuki Matsutani

Yoichiro Mochida

Financial Section

Issues that have been raised from the feedback we
received will be assigned an order of priority in spans.
We will continue to hold this kind of stakeholder dialog
with a view to taking a pro-active stance to issues related
to the environment, society, governance and other fields.

Environmental Activities Supporting “NTN 100”

Katsuhiko Kokubu• NTN’s CSR report contains a lot of information for a B
to B company (Business to Business, companies
selling products and services to other companies,
instead of general consumers). Further coordination
between business activities and CSR activities will be
important in the future.
• After a system has been built, promoting CSR activities
is tend to be difficult to become part of routine procedures. It is vital to include “Value Creation” as part ofcorporate activities for the further development.
• For globalization, it is vital that employees around theworld are aware of NTN’s overall image and significance of CSR.
		 Building up a global network is needed for themutual interaction within the NTN Group. It is also
important to provide a framework that allows themost suitable people for the job to work by incorporating a sense of global value with suitable positions
and jobs.
• Companies that face problems related to compliance
have issues with their corporate culture. Even
companies have an appropriate system for compliance; it would be possible not to function properly.
Sharing information with transparency is a key point.
Some countries have different levels of compliancewith laws and regulations, so it is also important todevelop a framework for each country.
• Environmental efforts designed with the concept ofReduce, Reuse and Recycle are reaching their limit
with regards to the Recycle aspect. The issue in the
future will be focused on the Reduce aspect. We
would also like to see more information on environmentally friendly products designed to “create value.”

CSR Activities Supporting “NTN 100”

Facilitator
Eriko Nashioka

Kobe University, Graduate School of Business Administration, Dean and Professor
Lawyer admitted in Japan and New York/Ethos Law Office
Ethos LPC
Senior Manager, Sekisui Integrated Research Inc.

Outline of Dialog“NTN 100” Strategy

It is that Corporate Social Responsibility (CSR) to stakeholders such as shareholders, investors, customers,
suppliers, employees, the environment and local communities is demanded.
To ensure that the voices of stakeholders are applied
as part of sustainable company activities, we held our
first stakeholder dialog on May 22, 2015 (Fri.) by inviting
academic experts and intellectuals in the various fields of
CSR. We had mutual discussions and received feedbackon our Group’s CSR activities.

A scene from Stakeholder Dialog

46

CSR Activities Supporting “NTN 100”Governance/Disclosure of Information
General Shareholder Meeting
Our Goal: An Open General Shareholder
Meeting “Transparency of General
Shareholder Meeting”
We have taken the following steps, such as making it
easy to take part in general shareholder meetings, tostreamline procedures for shareholders to exercise theirvoting rights.
At the June 2015 meeting, we took a similar approachto the one taken during the June 2014 meeting. We
endeavored to provide information of the general shareholder meeting on the Web earlier before mailing.

Measures to Streamline Shareholder Voting Rights
Sending our generalshareholder meeting
notice quicker

We send notices regarding shareholder meetings to shareholders three weeks before they are held, which is seven days
earlier than the two weeks notification required by law.

Scheduling meetingsoutside of common
dates that othercompanies use

To ensure that as many shareholders as possible can attend
shareholder meetings, we schedule them outside of common
dates that most companies hold their meetings, and we take
into account factors such as settlement and audit schedules.

General shareholder
meetings and othernotices listed on thecompany homepage

We endeavored to provide information of listed notices of thegeneral shareholder meeting on the Web earlier before mailing.

Voting rights over theInternet

1. We accept shareholder votes via mail and the Internet
through the 5:25 p.m. close of business up to the day
before the general shareholder meeting.
2. We have methods for dealing with cases in which there are
overlapping votes by mail and the Internet, or where
shareholders vote multiple times over the Internet.
3. We participate in the Electronic Voting Platform, which ismanaged by Investor Communications Japan(ICJ), an entity
formed by the Tokyo Stock Exchange and other bodies, andwhich makes it possible for institutional investors to vote.

Other efforts

At general shareholder meetings, certain sections of business
reports and settlement data are shown on monitors usinggraphs, photos and other visible data to complement themeeting chairperson’s explanations.

IR Activities
Disclosing Accurate Information in a
Fair and Timely Manner

We respond to the desire of shareholders and investors toreceive accurate information in a fair and timely manner.

Timely Disclosure on the Web
We focus on making information available for anyone toread by disclosing it on the Internet.
We disclose the required information through “theCompany Announcements Disclosure Service” on thewebsite of Tokyo Stock Exchange due to “the Securities
Listing Regulations.” On the NTN website, we also
release timely information including our securities,
quarterly report, business results, the NTN Report,
annual and business reports, and materials from ourresults meetings.

47

For those who
register on our website
for the NTN newsletter,
we send an email withthe latest news as soon
as it appears on our
homepage.

A scene form General
Shareholder Meeting

Explaining Policies at Seminars and Brieﬁngs
We provide as many opportunities as possible for stakeholders to hear about NTN management policy from thecompany’s top management.
At seminars for individual investors hosted by large
securities companies, NTN top management talk about
our company. They also host visits to production sites
in Japan.
On a regular basis, our executives convene resultsmeetings, teleconferences, one-on-one gatherings, andother regular brieﬁngs for analysts and institutional
investors. They also respond whenever there arequestions or requests from investors. In the ﬁscal year
ended March 31, 2015, we released as much informationin as many ways as possible both in Japan andoverseas, holding IR technology brieﬁngs and factory
tours, and taking part in events sponsored by securities
companies.
We will be conducting IR roadshows overseas,business briefing sessions, meetings for individual
investors and plant tours in the fiscal year ended
March 2016.

NTN Included in SRI Indices
NTN Continues to Be Included in
Numerous SRI Indices

NTN has been included in several socially responsible
investment (SRI) indices in the stock market for its
aggressive efforts to protect the environment andcontribute to society.
SRI indices (included as of March 2015)

NTN’s Vision

Officers (As of June 24, 2015)“NTN 100” Strategy

Directors
Hiroshi Ohkubo

President
Representative Director

Hironori Inoue

Executive Vice President
Representative Director

Fukumatsu Kometani

Yoshinori Terasaka

Aftermarket Business Headquarters

Research and Development

NTN KOREA CO., LTD.

Americas Region

Executive Director

Human Resources, Production,
Driveshaft Business Strengthening ProjectManaging Director

Composite Material Product Division
Quality Management

Keiji Ohashi

Hideaki Miyazawa

Itsuji Gotou

Hiroshi Nakano

Corporate General Manager, Finance
Headquarters

Corporate General Manager, Automotive
Business Headquarters

Procurement, Logistics & Cost Planning

Corporate General Manager, CSR
Headquarters

General Affairs, Environment,
CSR Headquarters

Europe & Africa Region

Hidefumi Tsuji

Takehiko Umemoto

Toshinori Shiratori

Kazuki Kawashima

Production
ASEAN & Oceania, India & West Asia Region

Deputy Corporate General Manager, Automotive
Business Headquarters

Corporate General Manager, Corporate
Strategy Headquarters

Corporate General Manager, Industrial
Business Headquarters

Managing Director

Director

Director

China Region

Internal Audit Department

EV Module Business Headquarters

Director

Director

Director

Corporate General Manager, EV Module Business
Headquarters
Quality Management

Hisaji Kawabata

Akira Wada

Outside Director

Outside Director

Audit & Supervisory
Board Members

Executive Officers

Kouji Kawahara

Tetsuya Kondo

Eiichi Ukai

Natsuhiko Mori

Tetsuya Sogo

(Outside)

Isao Ozako

Isao Koiwai

Koji Kametaka

Takayuki Matsuo

Yoshinobu Akamatsu

Etsu Harima

Pete Eich

Makoto Okasaka

Jianping Zhu

Alain ChauvinEiichi Nakamizo

Yusuke Iyama

Ryo Kawakami

Kazuki Hagihara

Katsuaki Miyake

Masaki Egami

Koji Ishikawa(Outside)

Kenji Nono

Satoshi Ueda

Masaaki Yamamoto

Herve Brelaud

DirectorStanding Audit &Supervisory Board Member

Standing Audit &Supervisory Board Member

Tadao Kagono

Audit &
Supervisory Board Member(Outside)

Audit &
Supervisory Board Member

Senior Executive Ofﬁcer

Senior Executive Ofﬁcer

Executive Ofﬁcer

Executive Ofﬁcer

Executive Ofﬁcer

Executive Ofﬁcer

Senior Executive Ofﬁcer

Senior Executive Ofﬁcer

Executive Ofﬁcer

Executive Ofﬁcer

Executive Ofﬁcer

Executive Ofﬁcer

Senior Executive Ofﬁcer

Senior Executive Ofﬁcer

Executive Ofﬁcer

Executive Ofﬁcer

Executive Ofﬁcer

Executive Ofﬁcer

Senior Executive Ofﬁcer

Executive Ofﬁcer

Executive Ofﬁcer

Financial Section

Mizuho Hikida

Director

Environmental Activities Supporting “NTN 100”

Director

Managing Director

CSR Activities Supporting “NTN 100”

Front row, from left: Hiroshi Ohkubo, Hironori Inoue
Rear row, from left: Akira Wada, Hisaji Kawabata, Hiroshi Nakano, Itsuji Gotou, Keiji Ohashi, Fukumatsu Kometani, Yoshinori Terasaka, Hideaki Miyazawa,
Hidefumi Tsuji, Takehiko Umemoto, Toshinori Shiratori, Kazuki Kawashima

Executive Ofﬁcer

Executive Ofﬁcer

Executive Ofﬁcer

48

CSR Activities Supporting “NTN 100”

Quality Management
Quality Management Policy
Basic Policy of Quality, Quality
Management Policy
Stipulate Basic Policy and Formulate Annual
Management Policy
Under our Basic Policy of Quality, which forms the basic
concept of all our manufacturing, we formulate quality
management policies for each fiscal year and define
policies for maintaining and raising product quality. In thefiscal year ended March 31, 2015, our target was “zerocomplaints” and “reduction in wasting defective products”
to strengthen the NTN brand and generate profit.
We will be striving to prevent from these issues.

Basic Policy of Quality
Pursuit of appropriate quality that cansuffice the functions and specifications required bycustomers.
• Quality that meets diversified needs in markets (Conformablequality)• Superior quality to competitors’ (Competitive quality)• Quality that benefits producers (Economic quality)

Major Certifications Acquired in Fiscal Year Ended
March 31, 2015
ISO 9001 certification acquired at 38 bases
RegionBase

Date of CertificationJapan

NTN HAKUI CORP.

Fiscal year ended March 31, 2015

Quality Slogan

Japan

NTN AKAIWA CORP.

Fiscal year ended March 31, 2015

Quality is our future — Quality paves the way for our future.

Thailand NTPT CO., LTD.

Fiscal year ended March 31, 2015

Quality Management Policy in Fiscal Year Ended March 31,
2015

Japan

Fiscal year ending March 31, 2016 (planned)

With the basic goal of maintaining and boosting trust amongcustomers, we aim to improve the NTN brand value andcontribute to corporate profit by having all employees strive to“ensuring global quality,” by eliminating all complaints, and by
reducing the number of defective products.

Quality Management Policy for Fiscal Year Ending March
31, 2016
As we start the first year of our New Medium-Term Management
Plan which marks a significant milestone, the company’s 100th
anniversary, we will work to “overcome NTN’s weak points”,“achieve unrivaled quality compared with other products”, for the
purpose of “improving NTN brand” and “ensuring global quality”,
under the basic concept of laying the foundation of a company
that will survive into the next century.

Quality Management System
Management Certification for Various
Production Items
Working Towards ISO 9001, ISO/TS 16949 andOther Standards
The NTN Group has been working to obtain the certification for quality management standards for its various
production items.

49

Besides the certification for the ISO 9001 quality
management system at production and sales bases inJapan and overseas, we have been aggressively working
to obtain the certification for the ISO/TS 16949, a quality
management standard that automotive manufacturers
demand.
In 2010, NTN became Japan’s first bearing manufacturer to obtain the certification under the International
Railroad Industry Standard (IRIS), the quality standard for
the European railway industry, and in 2014, NTN
obtained the certification from CRCC (China Railway test
& Certification Center). Together with the quality management certification of the Association of American
Railroads (AAR) acquired in 1986, this shows that we area high-quality supplier to the railroad industry. NTN has
also been certified for the JISQ9100 and NADCAP
standards for aerospace quality management.

NTN NOTO CORP.

ISO/TS 16949 certification acquired at 27 bases
RegionBase

Date of CertificationJapan

NTN AKAIWA CORP.

Fiscal year ended March 31, 2015

Thailand NTPT CO., LTD.

Fiscal year ended March 31, 2015

Thailand NMT (Pinthong Plant)

Fiscal year ending March 31, 2016 (planned)

China

Fiscal year ending March 31, 2016 (planned)

NTN-RAB (CHANGZHOU) CORP.

Global Quality Management
Sharing and Harnessing Quality Information
In January 2012, we installed the G-QUICK quality
information control system throughout the NTN Group,
which has resulted in a system where information canbe shared globally for a faster initial response tocomplaints and requests from customers to examine
defects. We also developed operating rules so that allgroup companies can utilize examples of past quality
problems and extract information from G-QUICK, withthe aim of training purposes and applying solutions to
defects quickly to other bases. Any information related
to quality that we have saved will be utilized in aproactive manner for training and to prevent the same
issues from recurring.

NTN’s Vision

Dissemination of Basic Policy of Quality
throughout Worldwide NTN Group

Working with Suppliers

Enhancing Customer Satisfaction
Determining Customer Needs
NTN Sales Persons and Engineers for Each
Customer

A scene from explanations tocustomers at NBCA

Once a year, we conduct customer satisfaction surveys
on our products and services in which customers choose
one of four levels of satisfaction in six survey items
including quality, cost, and delivery. Survey results go to
relevant company divisions to be reflected in improved
products and services.
In the fiscal year ended March 31, 2015, surveys werecompleted and sent in by 90 NTN customers worldwide.

Overall Assessment of Customer Satisfaction Surveys(As of year ended March 31, 2015)

Excellent

Good

２２

71

Needs improvement
slightly

Needs improvement
greatly

％

％

％

7

％

0

Financial Section

At the NTN Group sales companies around the world, we
appoint a sales person and an engineer to be in chargeof each of our customers and sales agents. This allows
us to quickly and accurately determine the needs andproblems of each customer and thus offer the best
responses and solutions.
We constantly work to improve the skills of thesesales people and engineers. In Japan, we conduct TQM(Total Quality Management) activities, which include

Customer
Satisfaction Surveys

Environmental Activities Supporting “NTN 100”

The NTN Group strives to enhance quality by cooperating with the suppliers who provide us with raw
materials and parts.
During Quality Month in November every year, wehold the “Supplier Quality Improvement Challenge” toprovide knowledge and know-how on improving quality
to our suppliers through lectures and other events
related to quality. Last year, 96 companies participatedin this Challenge.
Quality audits are also conducted by the suppliers
themselves using the NTN Group’s check sheet for
quality criteria. Based on the results of these self-audits,
NTN conducts its own on-site audits at supplier sites sothat we are able to help them continuously solve their
quality issues. In the fiscal year ended March 31, 2015,
we conducted on-site audits at 319 suppliers.

The NTN Group holds periodic sessions where
customers can get to know our products and technologies better and speak directly about their needs with ourengineers. NTN companies hold traveling product exhibitions and technical seminars. For example, NTN
BEARING CORP. OF AMERICA (NBCA) tours customer
sites around the U.S.A. to givetraining on bearing basics andbearing use. NBCA is receiving
an increasing number ofrequests for these training
sessions from customers.

CSR Activities Supporting “NTN 100”

HandbookNTN Engineers Provide Problem-Solving
Opportunities“NTN 100” Strategy

We have published “Basic Policy of Quality” and our“Quality Control Handbook.” These have been distributed
to approximately 100 companies including NTN
worldwide manufacturing, engineering, R&D, distribution
divisions, and suppliers.
In addition to the existing Japanese, English, Chineseand Thai versions, we made Spanish andPortuguese versions during the fiscal
year ended March 31, 2015, which wereused for training and other purposes
when launching new overseas factory. In
addition to these handbooks, we will be
developing training materials with moredetailed content for maintaining quality
and make it available globally to raise theLocalized version ofquality level throughout the NTN Group.
Quality Control

meetings and education gatherings at which sales people
reflect on their weekly dealings
A scene from Sales TQM
with customers and think fromthe customer’s perspective as away to improve service.
In the fiscal year ended March 31, 2015, we rolled out
initiatives that we considered quality targets, andfocused on specifically how NTN could help them
improve their situation.

50

CSR Activities Supporting “NTN 100”

Supply Chain Management
Procurement Policy
Selecting Partners in Line with Group
PolicyBuilding Partners Worldwide
Based on our “Basic Procurement Policy”, which we
formulated with a view to fairness, equality, and global
thinking, we have strived to select suppliers and build areliable relationship with them. With the “NTN 100”
medium-term management plan, we will be building a
global procurement and logistics network in order todevelop a system that allows for greater production incustomer regions.
In the fiscal year ended March 31, 2015, we selected
raw materials from global sources and worked to reduce
their costs as part of preparations for “NTN 100.” Westudied and analyzed cost-competitiveness, production
capacity and other factors in each region with a focus on
the automotive industry, and developed a policy on how
to utilize materials from Japan and overseas. We havedeveloped a global procurement network by working withsteel manufacturers in line with this policy.

Conveying Policy through Brieﬁngs andWorkshops
NTN holds “Supplier-Meetings” to explain NTN’s procurement policy and production volumes at production
bases, as well as about how they can help in production
activities and obtain the ISO certification.
In the fiscal year ended March 31, 2015, we held two
meetings attended by a total of 57 suppliers, who wereasked to help with modernization plans such as production
reforms with a view of strengthening the managementfoundation in the lead up to NTN’s 100th anniversary. We
also invite suppliers to join training workshops for NTN
employees that are led by outside instructors.
Besides these examples of work-related information
provision, we also take opportunities to interact actively
with suppliers; for example, planting trees at their sites
in Japan.

Fair and Appropriate BusinessThorough Compliance with the
Subcontract Act
Self-Audits and Workshops

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 tomarket changes.

2

We abide by laws and ethics, and we promotefairness and equality in business.

3

Through procurement activities, we strive to
conduct business in a manner that protects theenvironment and preserves resources.

4

We deepen understanding with suppliers, and we
aim to create a partnership founded on trust thatgenerates mutual prosperity.

Promotion of CSR Procurement
We go through several stages in choosing suppliers whoare earnest in putting CSR into business action.
In the fiscal year ended March 31, 2015, we revised
the basic contract, adding three clauses related torespect for human rights, rejection of relations with
Anti-Social Forces, and forbidding of bribes. We are also
looking into methods for monitoring whether suppliers
are abiding by our “CSR Policy”.

51

In January 1997, NTN formulated the Self-Audit Manualfor Subcontractors. NTN production bases conduct theirown self-audits using this manual, and when necessary,
NTN’s procurement division intervenes with periodic
audits and guidance to ensure compliance with Japan’s
Subcontract Act.
Of NTN’s suppliers in Japan, 80% are subject to the
Subcontract Act, so it is crucial that we ensure these
suppliers are carrying out business dealings in a fair manner.
In the fiscal year ended March 31, 2015, self-audits
were held at 21 bases in Japan (20 production bases, 1
research center). NTN’s procurement division intervened
in all cases to ensure thoroughness of the audits.
We require all procurement staff to attend Subcontract
Act workshops held by the Japan Fair Trade Commission
as well as seminars held outside NTN. In addition, theprocurement division held the “Workshop of Complying
with Subcontract Act” to give all factory staff a deeper
understanding. In the fiscal year ended March 31, 2015,
workshops were held at 19 bases. Those that seemed tolack of understanding or have incorrect views of the
Subcontract Act were provided with guidance, and arebeing monitored for continual improvements.

Occupational Safety and Health

NTN’s Vision

Human Resources, Labor, etc.
Incidence Rate/Severity Rate

Building a Management System Basedon OSHMS

Occupational Safety and Health Based on
Five-Theme Action Plan

National average for Japanese industry

NTN

National average for Japanese industry
1.68

1.7
1.61

1.62

1.59

1.58

1.5
0.6

0.58

0.4
0.29

0.24

0.2
0.0

0.26

0.16

0.090

0.110

0.011

0.018

0.005

0.011

2011

2012

2013

2014

0.100

0.100

0.09
0.06

2015 (Years ended March 31)

Building Systems of Mental Health Care

Action Plan: Five Themes in Fiscal Year Ended March 31, 2015
1. Elimination of workplace accidents (thorough management of work-related risks and skills)

3. Health promotion

4 NTN works organized activities to reduce equipment risks at 4
subsidiaries in Ishikawa Prefecture, including special risk assessments
training for the staff

NTN Group inJapan

A public health nurse at provided individual health guidance at all sales
offices

NTN Group inJapan

Training with safety simulation devices was conducted for employees,
by each of their levels, by improving the practical safety education.

NTN Group inJapan

3,840 employees underwent specific health checkups, and 378 received
specific counselling guidance

NTN

Safety and health cross audits were conducted at 4 NTN works and 3
subsidiaries to provide guidance on issues identified during external
audits and to work to develop solutions

NTN Group inJapan

Held the “Oasis NTN” counseling service twice a month

NTN

Supervisor, who is in charge of safety / NTN Personnel Department,
examined 7 out of 18 subsidiaries. As a result,safety management
training for management auditors was conducted at NTN TADO CORP.

NTN Domestic
Subsidiaries

The quick medical interview “MINI Diagnosis” was conducted for all
employees to check for problems such as depression, panic disorder, andobsessive-compulsive disorder

NTN

Focused on providing support to subsidiaries, low level of safety(for 2 years).

NTN Domestic
Subsidiaries

Mental health checks were conducted for employees before transferring
overseas

NTN

5. Raised the occupational safety and health standard of NTN Group

Safety and health consultants conducted training related to laws toimprove the level of safety and health at 18 subsidiaries

NTN Domestic
Subsidiaries

Provided safety and health education to employees with poor experience

NTN

Provided mental health education to management staffs and supervisors

NTN

Held individual back pain workshops with applicants, amount to 36
participants in total.

NTN

Conducted risk assessment training at KUWANA WORKS, NTN MIE CORP.
and others

NTN Group inJapan

Focused on supporting the NTN Group in Japan by conducting the above
activities

Safety simulation devices

NTN

Financial Section

2. Thorough education on safety and health

4. Mental health activities

Environmental Activities Supporting “NTN 100”

NTN holds mental health training sessions for managers
and supervisors, while outside counselors offer counseling during regular medical check-ups.
Employees can also receive counseling through NTN’s
in-house counseling service, called the “Oasis NTN” (heldtwice a month) and the “Mental and Physical Health Counseling Service” by phone or email.
In addition to ordinary mental health services, we willaddress issues using the Stress Check System that will
begin from December 2015 in line with the guideline of
Ministry of Health, Labour and Welfare throughout the
fiscal year ending March 31, 2016.

CSR Activities Supporting “NTN 100”In the fiscal year ending March 31, 2015, we strove toimprove occupational safety and health in five areas(outlined below), with a special focus on eliminating
workplace accidents at the NTN Group in Japan. Unfortunately, there were 38 workplace accidents, which was
one less than the previous year, indicating a similar levelof awareness.
In the fiscal year ending March 31, 2016, we will revise
work manuals and have managers and supervisors
conduct risk assessments at sites based on the fivethemes of occupational safety and health, and also
provide on-site guidance and training sessions for
subsidiaries. We will also focus on eliminating recurringor similar disasters to improve safety and healththroughout the entire group.

NTN

Severity Rate

“NTN 100” Strategy

We work to create safe work environments based on a“safety first” spirit that respects people. We havetherefore created a safety and health management
system based on the criteria of the “Occupational Safety
and Health Management System” (OSHMS).
As of March 2015, a total of eight bases have beencertified for OSHMS, and NTN KAMIINA CORP. havebeen preparing for the certification.

Incidence Rate

52

CSR Activities Supporting “NTN 100”

Respecting Human Rights and Diversity
A Workplace Free of Discrimination

The NTN Group strives to create a discrimination-freeworkplace where all human rights are respected.
At the NTN business sites and group companies inJapan, we include human-rights education as part oftraining for new employees, supervisors, and managers.
We place particular emphasis on measures against
harassments such as sexual harassment and power
harassment, and we have ongoing education on theseissues for new employees and newly appointed
managers. We also participate in the activities of regional
human rights organizations and take part in a variety ofhuman rights exhibitions and seminars. We also have
“Helpline”(whistle-blowing) inside and outside thecompany that make it easy for employees and others toseek advice when they feel that someone’s human rights
have been violated.
NTN overseas subsidiaries have also built systems
that help them continue to respect human rights.

Promoting Diversity in Workplace

53

The employment rate of persons with disabilities
2.00
1.75

1.73%

1.76%

2013

2014

1.93%

1.50
1.25
1.00

2015 (Years ended March 31)

efforts with special-needs schools and encourage online
applications, and are making improvements to equipment
as part of efforts to create a better working environment.
The NTN Group in Japan also provides stable employment for seniors with a system under which retirees canbe re-employed (system for re-employment of those in
their early 60s). In the fiscal year ended March 31, 2015,
there were 74 employees working under this system.
We will continue with these initiatives into the future as
our way of increasing diversity.

Hiring Women, the Persons with Disabilities
and Seniors

Helping Employees Continue Working While
Raising Children

We ensure that women are given a more active role, andwe are aiming to double (compared to fiscal year ended
March 31, 2015) the number of women in management
positions by the fiscal year ending March 31, 2018.
To achieve this target, we ran the improvement
seminars for female employees to help develop theircapabilities. For those in management positions, we run
diversity management seminars to ensure proper
awareness of diversity. By applying this approach to both
women and those in management positions, participantsof the seminars were assigned a management position in
April 2015. We are continuously working on increasing
the ratio of women amongst university graduates hired
by NTN, with the women accounting for 21.2% of new
employees during the fiscal year ended March 31, 2015,
up 4.3 points from the previous fiscal year.
We also hire the persons with disabilities and peopleof advanced age.
The number of the persons with disabilities employedthroughout the Group in Japan was 123 (1.93%) as ofMarch 2015. To this end we established “Dream
Workshops,” where the persons with intellectual disabilities take a leading role, at IWATA WORKS, KUWANA
WORKS and OKAYAMA WORKS. We also coordinate

The NTN Group strives to support employees in boththeir work and child-rearing.
In Japan, for example, there are numerous suchprograms, including the Mom-back system to rehire
women who have retired to give birth or raise a child;and the Bear Kids Land, an in-company day-care centerfor employees’ children.
We also provide support beyond legal requirementswith our system for reduced working hours for childcare,which now covers employees until their children havefinished the second grade of elementary school, andstaggered work shifts in the Tokyo and Osaka areas for
those raising children.

Bear Kids Land

NTN’s Vision

Human Resources Development
Global Human Resources Development

Overseas Trainee and International
Internship Programs

Rewards for Employee Inventions

To reward our employees’ inventions, we have established the Patent Management Rule and the Patent
Reward Rule and we have clarified how patent rights are
attributed and how the value of award is calculated.
Rewards are also made for foreign patents and forknow-how and inventions considered to be trade
secrets. There is no upper limit to actual awards.
In the fiscal year ended March 31, 2015, we pursued
an intellectual property strategy linked directly tobusiness strategy and R&D strategy with the goal ofboosting our competitiveness in key product areas. As aresult, 354 employees (cumulative) were rewarded for
obtaining rights for 154 patents.

Financial Section

The NTN Group provides employees with numerous
opportunities to increase their drive for work and honetheir skills, which includes planning and implementing
various educational programs such as the Global QC
Circle Convention and NTN Technical Skills Competition,and running the Monozukuri School.
For example, we continue to run the Global QC Circle
Convention, in which employee teams work independently to enhance product quality. The fourth convention held during the fiscal year ended March 31, 2015
drew 19 teams, the highest number ever recorded.
We also hold the “NTN Technical Skills Competition”,
where employees from around the world put the resultsof their daily training against one another to test their skill
level. We continue to inspire “young employees’ motivation through activities” such as training at temples andsupporting areas stricken by the March 2011 earthquake
and tsunami.

Environmental Activities Supporting “NTN 100”

Promoting Self-Development andHigher Motivation

NTN takes employment working conditions andemployee evaluation into consideration.
We recognize global efforts to stamp out forced laborand child labor, and require that all permanent employees
join the NTN labor union so that they can have the rightto organize.
In evaluating our employees, all are subject to uniform
evaluation standards, and multiple managers conduct
employee evaluations, each viewing the individual being
evaluated with a unique perspective. A self-certification
system and face-to-face interviews held twice a year areused to as ways to verify individual intentions in order toincrease transparency.
Salary is composed of a base salary combining age
consideration and job ability, as well as various allowances, however with greater diversity with work styles
and employees, we will be reviewing our employee
system so that it is in line with the most recent employment and working situations.

CSR Activities Supporting “NTN 100”

We have a system under which Japanese NTN
employees are sent to overseas bases for one year,
and an international internship program so that
employees can experience first hand the markets
overseas. We also run domestic and overseas
training and scholarship programs on an ongoingbasis for employees to acquire specialized skills
and knowledge. In the fiscal year ended March 31,
2015, there were three trainees from overseas, andtwo employees were dispatched on international
internships. We also hosted 11 trainees fromcompanies overseas, and three trainees from
distributors overseas.
We will continue to increase employee interaction between Japan and overseas.

Employment and Working Conditions/
Employee Evaluation“NTN 100” Strategy

Of NTN’s worldwide employees, 34% are in Japan and
66% are overseas. We have set out to continue
expanding our worldwide business, which is why westrive to develop the human resources who will run our
production bases around the world.

Employees also strive to improve their foreign
language skills through e-learning and correspondence courses. We hold seminars with external
lecturers several times a year as a way to encourage
training for employees.
We will continue to focus on developing systems fortraining global human resources, organize educational
activities by work position and field of expertise, review
training programs and run events such as the Global QC
Circle Convention and NTN Technical Skills Competition.

54

CSR Activities Supporting “NTN 100”Contributions to Local Communities
NTN Group Social Contribution Activities
Contributing to Communities as a Good
Corporate Citizen
The NTN Group’s CSR Policy states that we shall do all we
can to interact with and contribute to local communities.

Based on the CSR Policy, the NTN business sites
and group companies around the world plan andimplement a range of activities that include disasterrecovery support, participation in local events,
promotion of culture and sports, and international
exchange and internship hosting.

Young Employees Assist in Post-Disaster Reconstruction Efforts (Japan)
From September 3 to 5, 27 young employees volunteered toparticipate in the “Training for Tohoku Reconstruction Assistance
Activities” held in Ishinomaki City in Miyagi Prefecture.
Volunteer activities involved installing water pipes along anapproximately 2 km long area, mixing cut straw with water andsand for use in mud walls on older houses, and cleaning
temporary housing air-conditioning systems ventilation fans andfly screens.
Comments from participants included “I was taken back by
the real scale of damage,” “It is clear that there are still issues
remaining, despite progress with recovery” and “I would like tohelp out by telling the stories I heard while here, or visiting the
Tohoku region.”

Training for Tohoku
reconstruction
assistanceSponsoring Free Outdoor Concerts (U.S.A)
NDI (NTN Driveshaft Inc.) sponsored a free concert held tocelebrate renovations of a memorial library.
To commemorate the end of seven months of renovations,
The Cleo Rogers Memorial Library, known as the Main Library ofBartholomew County, held a memorial concert at the open areaadjacent to the “Large Arch” sculpture by Henry Moore. The
concert drew approximately 2,000 visitors who sat in fold-up
chairs to listen to a performance by the Black Violin group.
Black Violin is an American violin and viola duo, and their performance was so mesmerizing that the crowd stood up and started
dancing. Participants were overjoyed.

Free outdoor concert

Elementary School Social Studies Excursion (Thailand)
NMT (NTN MANUFACTURING (THAILAND) CO., LTD.) held asocial studies excursion for elementary school students.
There were 29 participants, including head teachers, whowere greeted by the president and shown a video outlining thecompany, followed by descriptions of products for the elementary school students. The descriptions in particular were used to
explain exactly how the products were used. After the descriptions, a plant tour was held with special attention made for thesafety of the children. Quizzes using microscopes and otherideas were used to make the tour as interactive as possible. At
the end of the excursion, the children had lunch in the employee
cafeteria, and were provided with a souvenir in what was part ofefforts to contribute to the local community.

55

Social studies excursion
for Thai elementary
school students

Environmental Activities Supporting “NTN 100”

We work to develop and provide products and services which will contribute to
the reduction of environmental impacts of customers and society.

NTN’s Vision

Provision of Products Contributing to the Environment

Contributes to the reductionof environmental load
“NTN 100” Strategy

Reduction of CO2 emissions
Energy-saving

Resource-saving

Customers

Features of
NTN products

Machine tools

Higher Reliability

Construction machinery

Low torque

Light and compact

Automotive

Technical services

Machine Tool Main Spindle
Bearing with Air Cooling Spacer

ULTAGE Large Tapered Roller
Bearings

We have developed a “Wireless
Measuring unit for Wind Doctor™”,
which realizes wireless communications for monitoring the conditions ofwind turbines for the first time in theworld. This product allows measurement sensors the CMS* to be installedon optimal measurement points such as
the main rotor (rotating section) of anouter ring rotation type wind turbine
where conventional wired products
could not be installed, and its
outstanding level of water anddust-proofing allows it to be used intough environments including off-shore
places which leads to contributing togreater utilization ratio of wind turbines.

By applying our proprietary air-coolingtechnology “Air Cooling Spacer” tobearing for main spindles of machine
tools, this product has achieved theworld’s highest standard of rotational
performance (improved by 20% compared
to conventional products) while ensuringhigh rigidity of the main shaft. High speed
rotation of the main spindle allows it toincrease the machining feed rate,
contributing to energy savings by thecycle time reduction.

This product delivers the world’s
highest standard of high-load capacity
and high rotational precision. By
reviewing the internal design and thecrowning shape of tapered roller
bearings, we have realized high-load
capacity which is 1.3-times or higher
than the conventional product, andimproved the rated life of the bearing
3-times or more and the load
resistance 2-times or more. This
product contributes to improved
performance and longer life of steel
plant equipment, wind turbines,
construction and mining machinery
used in harsh environments.

* The product in the photo is partially cut
out in order to make it easier to view thestructure.

“Low Section High Strength
Press Pulley” for Engine
Accessory Belts
With an optimally shaped design andimprovements to press molding
technology, this product achieves theworld’s highest standard of load
resistance. A low pulley section of
approximately 70% of conventional
products ensures a larger diameterbearing can be assembled, which
improves bearing operating life and load
capacity. Moreover, because this producthas superior durability under hightemperature conditions and excellent
wear resistance against foreign matter, it
is also suited to automobiles in emerging
markets with tough usage environments.

Financial Section

Wireless Measuring Unit forWind Doctor™

Environmental Activities Supporting “NTN 100”*

CSR Activities Supporting “NTN 100”

Wind turbine equipment* Abbreviation of Condition Monitoring
Systemhttp://www.ntn.co.jp/english/news/
new_products/news201500005.html

http://www.ntn.co.jp/english/news/
new_products/news201400101.html

http://www.ntn.co.jp/english/news/
new_products/news201400030.html

http://www.ntn.co.jp/english/news/
new_products/news201400047.html

See our website for more information.

56

Environmental Activities Supporting “NTN 100”

Environmental Performances for the Fiscal Year
Ended March 31, 2015
22 of 27 Targets Achieved

reduction of environmentally hazardous substances”
etc., we achieved 22 out of 27 target items including
the reduction of the CO2 emission rate etc. Though
we couldn’t achieve the target of reducing domestic
CO2 emissions due to an increase in the production
scale, we will make efforts to prevent global warmingin line with the target of achieving 280,000 tons/year
for the year ending March 31, 2016.

Every year, NTN sets and works towards the achievement of targets in line with four items of our Group
Environmental Policy.
For the year ended March 31, 2015, as a result of
focusing our efforts on “development of energy-efficient
products”, “prevention of global warming” and“Reduce, reuse, and recycle” and “management andCompany-Wide Environmental Results for the Fiscal Year Ended March 31, 2015
NTN Environmental Policy

Environmental Purpose

Development and sales of(1) Development of energyenvironmentally-friendly
efficient products
products

Environmental Targets

Begin assessment of environmental efficiency in new productdevelopment

Preparing to implement

Improvement of the CO2 emission rate through the reorganization of
production(Prevention of deteriorating emission rate in production reducing
phases)268,000 tons/year or
Japan
less
Reduction of CO2 emissions
320,000 tons/year or
Overseas
less
Improvement over theJapanfiscal year ended March
31, 1998, –17.8%
Reduction in CO2 emissions rate
Improvement over theOverseas fiscal year ended March
31, 2007, –10%
Raise the recycling rate

Reduction in waste per unit ofproduction output(4) Management and reductionof environmentallyhazardous substances(1) Compliance withenvironmental laws

57

Activities to contribute tosociety and protect thenatural environment

99.8% or more

Overseas 98% or moreJapan

Being implemented in each businesssite including the energy-saving periods
Horizontally developing theimplementation examples in eachbusiness site
Kuwana-Mie Works: Implemented ashort course on improvement by inviting
an expert in energy-saving.
279,000 tons/year
315,000 tons/year–20.0%–12.3%
99.9%
96.8%

Reduce the waste
generation rate by 0.8%
–1.9%
over the fiscal year ended
March 31, 2011, –0.8%

Increase paper
consumption by +10%
11.6%
over the fiscal year ended
March 31, 2011
Reduction over the fiscal
Reduction in water used per unitJapan
year ended March 31,–16.2%of production output
2011, –10%
In comparison with thefiscal year ended March–99% maintained
Reduction in use of StyrofoamJapan31, 2000, –99%
maintained
Replacement with alternative seal
Promotion of switchover in processes using phthalate esters substitutes
materials, etc. completed
Replacement of the targeted grease etc.
BNST replacement in progresscompleted
Completely eliminatedIts use has been completely eliminatedReduce PRTR-designatedJapan
N,N-Dicyclohexylamine
since January 2015.
substances
Continue to create measures to prevent leak accidents and carry out
Completed at all sites
improved and full-scale emergency drills
Reduction in paper purchased
per unit of production output

Observance of laws andregulations andimplementation ofthorough environmental
management systems

Japan(2) Reduce, reuse, and recycle(3) Preserve resources

Results
R&D in progress in engineering andresearch divisions

Improve energy efficiency of existing equipment by utilizing
management standards

Reduction inenvironmental impact

Not achieved

Develop environmentally contributing products to meet needs ofexpanding new energy and greater number of electric cars

Wherever possible, save energy and cut peak energy use(1) Prevention of global
warming

Achieved

Japan

Continue strict management of poisonous materials

Strict management continuing

Start soil purification and process management at former site ofSoil improvement being implemented
TAKARAZUKA WORKS
Certification obtained at NTN AKAIWA
Certification complete
ISO 14001 certificate
CORP.
Strengthen energy management
Formulation of detailed energy
Energy management
system to comply with the Revised
management rules
Rationalization in Energy Use Law(2) Expansion and improvement
Certify the environmental
management systems of at least96%
of environmental
95% of key suppliers
management systems
Continued through meetings with thePromote green procurement
Clarification of responsibilities for
Quality Assurance Dept. and thegreen procurement in each division
Procurement Dept.
Zero complaints of environmentally
No complaints from customers
hazardous substances(1) Protecting biodiversity

NTN Kigyo no Mori and other greening and environmental protection
activities

Under way at each site, etc.

Evaluation

NTN Environmental Action Policy for the Fiscal Year Ending March 31, 2016
1. Development and sales ofenvironmentally-friendly products
2. Reduction in environmental impact(1) Development of energy-efficient products(1) Prevention of global warming(2) Reduce, reuse, and recycle(3) Preserve resources(4) Management and reduction of environmentally hazardous
substances(1) Compliance with environmental laws
(2) Expansion and improvement of environment management system(1) Protecting biodiversity“NTN 100” Strategy

3. Observance of laws and regulations
and implementation of thoroughenvironmental management systems
4. Activities to contribute to society andprotect the natural environment

NTN’s Vision

Environmental Targets for the Fiscal YearEnding March 31, 2016

Company-Wide Environmental Targets for the Fiscal Year Ending March 31, 2016
NTN Environmental Policy

Environmental Purpose

Development and sales of(1) Development of energyenvironmentally-friendly
efficient products
products

Environmental Targets
Develop environmentally contributing products to meet needs of expanding new energy and greater number of electric cars
Begin assessment of environmental efficiency in new product development

Make existing manufacturing equipment more energy efficient(1) Prevention of global
warmingJapan

280,000 tons/year

Overseas337,000 tons/year

Japan

Improvement over the fiscal year ended March 31,
1998, –23%

Overseas

Improvement over the fiscal year ended March 31,
2007, –13%Japan

99.8% or more

Overseas

98% or more

Reduction in waste per unit of production output

Japan

Reduction over the fiscal year ended March 31, 2011,–4.8%

Reduction in paper purchased per unit of production
outputJapan

Increase paper consumption by +8.8% over the fiscal
year ended March 31, 2011

Japan

Reduction over the fiscal year ended March 31, 2011,–17.6%

Overseas

Reduction over the fiscal year ended March 31, 2015,–3%

Reduction in use of Styrofoam

Japan

In comparison with the fiscal year ended March 31,
2000, –99% maintained

Reduce PRTR-designated substances

Japan

Reduction of CO2 emissions

Reduction in CO2 emissions rate

CSR Activities Supporting “NTN 100”

Wherever possible, save energy and cut peak energy use

Raise the recycling rate(2) Reduce, reuse, and recycle(3) Preserve resources(4) Management and reductionof environmentallyhazardous substances

Reduction in water used per unit of production output

Environmental Activities Supporting “NTN 100”

Reduction inenvironmental impact

Continue to create measures to prevent leak accidents and carry out improved and full-scale emergency drills(1) Compliance withenvironmental laws

Continue strict management of poisonous materials

Observance of laws andregulations andimplementation ofthorough environmental
management systems

ISO 14001 certificate

NTN Driveshaft do Brasil obtained the certification

Preparation for revision in ISO 14001

Collection of information and preparation in view of the planned
revision (in September)(2) Expansion and improvementof environmental
management systems

Ensuring the understanding of the revision of the Green Procurement
Standards and the guidelines for activities to preserve biodiversity
Promote green procurement

Financial Section

Follow-up operation of the soil purification and its completion at the former site of TAKARAZUKA WORKS

Clarification of responsibilities for green procurement in eachdivision
Zero complaints of environmentally hazardous substances

Activities to contribute tosociety and protect thenatural environment(1) Protecting biodiversity

NTN Kigyo no Mori and other greening and environmental protection activities

58

Environmental Activities Supporting “NTN 100”

Environmental Impact of Business
Activities
Reducing Environmental Impact in All
Production Processes
The NTN Group strives to reduce environmental impact
in all processes, from development, designing tologistics. For that purpose, grasping the entire picture of

the INPUT in the manufacturing process (raw material,
energy, water) and the OUTPUT from the manufacturing
process (CO2, waste, wastewater), we are working to
reduce them.

Environmental impact from production activities in Japan(Fiscal Year ended March 31, 2015)

Material
recycling*1
Scrap metal

INPUT

14,310Raw materials

tons

Raw material 360,000 tons
Steel material

Target: NTN Group companies
in Japan

Production
processOUTPUT
CO2

Development
DesignCO2 emissions

279,000

356,000 tons

tons

Non-ferrous metal/
oils and fats etc. 4,000 tons

Forging
Turning

EnergyThermalrecycling*2

Electricity 590 GWh
LPG
City gasDisposal ofindustrial waste

Waste oil

9,336 tons
6,074 mHeat
Treatment

4,990
tons

Generated amountof waste

64,770tons

Recycled amount

64,7003

tons

Lime and coke 1,478 tons

Heavy oil A
Kerosene
Diesel fuelGasoline

1,500,000 L
1,023,000 L
186,000 L
122,000 L

Grinding
Polishing

70 tons

Wastewater

Assembly

Water

Use ofcirculatingwater

50,0003m

Drainage

1,750,000
m3

RiversGroundwater 1,030,000 m3

770,000 m3
Industrial water 160,000 m3

Total landfilledamount

1,710,000

Top waterm3

Logistics

Sewage40,000 m3*1 Material recycling: To recycle for use as a raw material*2 Thermal recycling: To recycle for use as fuel59

NTN’s Vision

Environmental Accounting
Investment following Research andDevelopment

Introduction of higher efficiency compressors(NTN NOTO CORP.)

Environmental Preservation Costs(Millions of yen/year)
Equipment investment

Classification

Costs

AmountDetails

Costs

Details

Environmental equipment (dust collectors,
9 particulate smoke removal devices, andwastewater treatment equipment)

Expenses to preserve the global
environment

Energy-conserving equipment (upgrading of
75 equipment including compressors, lighting,and air conditioning)

Operation and management of energy188 saving equipment
Service charge of ESCO businessResource recycling expenses

0605

Waste reduction, recycling, and final
disposal

Upstream / downstream costs

02

Costs of analysis related to green
procurement

Costs of management activities

0Work areas
internal costs

R&D costs

568

Disclosure of information on labor costs
related to the environment management
421 activities (advertising and NTN reports) andthe greening and beautification ofcompany grounds
R&D equipment related to environmental
preservation

2,011

R&D equipment cost related toenvironmental preservation
Greening and beautification outside thecompany

Costs of social activities

03

Environmental remediation expenses

0

5 Cost of soil sampling

Total(Reference) Total amount for fiscal year ended
March 31, 2014

652

3,401

4,053

1,182

3,544

4,726

Impact on Environmental Preservation

CO2 emissions

Reduction of waste

272,000 tons

Recycle rate 99.8%

Financial Effect of Environmental Preservation Activities(Millions of yen/year)

Fiscal year ended
March 31, 2015
279,000 tons

Recycle rate 99.9%

Item

AmountDetails

Global environment preservation
expenses, effects

100

Reducing electricity cost, etc. by energy-saving
equipments

Resource recycling expenses,
effects

700

Profit from sealable materials such as metallic
sludge

Total

800(Reference) Total for fiscal year
ended March 31, 2014

869

Financial Section

Indicator

Fiscal year ended
March 31, 2014

Grand total

Environmental Activities Supporting “NTN 100”

Pollution prevention costs

Operation and management ofenvironmental equipment
166
Environmental measurement (Air, water
quality, noise, etc.)

CSR Activities Supporting “NTN 100”

Replacement of mercury lamps with LEDs
(NTN SHIKA CORP.)“NTN 100” Strategy

The NTN Group companies in Japan uses environmental
accounting to quantitatively assess its environmental
protection activities. Environmental preservation costsin the fiscal year ended March 31, 2015 were 4,053
million yen, down 14% from the previous fiscal year.
This consisted of 652 million yen in environment-related
equipment investment, down 45%, and related costsof 3,401 million yen, down 4%. Though the entire
amount decreased due to the reaction from theinvestment on research and development (of EV-related
projects etc.) regarding the active environmental preservation of the first term, we have continued to invest
on research and development at a high rate. There
were also costs for items like energy-efficientequipment and waste recycling.

60

Environmental Activities Supporting “NTN 100”Prevention of Global Warming
The NTN Group strives to reduce CO2 emissions generated during
production and transportation.

Reduction of CO2 Emissions
Efforts in Japan
We have achieved our target CO2
emission rate

For the fiscal year ended March 31, 2015, we set targetsof CO2 emissions of 268,000 tons/year and CO2 emission
rate reduction of 17.8% as compared with that of theyear ended March 31, 1998, (0.72 tons – CO2/million yen).
Though the emissions were 279,000 tons/year and we
couldn’t achieve our emission target due to an increasein the production scale, the emission rate was, owing to
the effect of energy-saving activities, reduced by 20%(0.70 tons – CO2/million yen) as compared with that in theyear ended March 31, 1998, which met the target.
For the fiscal year ending March 31, 2016, we set
targets of CO2 emissions of 280,000 tons/year and CO2

emission rate reduction of 23% as compared with thatof the year ended March 31, 1998, (0.67 tons – CO2/
million yen).

CO2 Emissions and CO2 Emission Rate
CO2 emissions
35.0

20.0

1.00

0.87

30.0
25.0

CO2 emission rate

Emissions rate ( ton-CO2 / million yen)

(10,000 tons/year)

20.6

28.2

28.8

0.70

0.69

26.9

27.2

27.9

0.70

0.73

0.70

28.0

0.67

15.0

0.40
0.20

5.0
0

1998

2011

2012

2013

2014

(Reference year )

2015

2016

( Target )( Years ended/ending March 31)

Additionally, each business site has engaged invarious energy-saving activities and has aimed toreduce energy use, including the efforts to replacelighting apparatus with LEDs at NTN HAKUI CORP. and
NTN SHIKA CORP., as well as updating with highefficiency compressors at NTN MIKUMO CORP and
replacement of pumps with inverter-equipped ones at
NTN FUKUROI CORP. etc.

Replacement of mercury lamps with LEDs (NTNHAKUI CORP.)

A scene form Energy-Saving/Resource-Saving
Section (KUWANA WORKS)

61

0.60

10.0

Energy Savings and Energy-Saving Investment at NTN Sites
With a view of reorganizing the production in the entire
company, we examined and discussed “measures toimprove the CO2 emission rate without increasing or
decreasing production”, and, aiming to comply withenergy-saving-related laws and to achieve the environmental targets of our company, we held energy-saving/
resource-saving sectional meetings at KUWANA
WORKS in July 2014. We confirmed that energy-saving
measures are important for the 6 top business sites
accounting for 80% of the CO2 emissions from theentire domestic NTN Group, and we examined improvement measures on the basis of the actual energy-saving
performance of each business site and the cases ofother businesses.

0.80

Updating with higher
efficiency compressors(NTN MIKUMO CORP.)

Replacement of pumps withthose equipped with inverters(NTN FUKUROI CORP.)

0NTN’s Vision

Reducing CO2 emissions during
distribution

Efforts Overseas

CO2 Emissions and CO2 Emission Rate
CO2 emissions

CO2 emission rate

1.50
1.00

0.01391.37

0.01301.35

0.01380.01391.32

1.30

0.01320.0131

1.29

1.32

1.06

CO2 emissions

0.015

2011

2012

2013

2014

2015 2016

0(Target)( Years ended/ending March 31)

Asia

1.50
1.23
1.10

1.12

1.13

1.13

30.1

30.8

1.08

40
30
20

China

Emission rate (ton-CO2 /million yen)

60
50

2010

Americas
EuropeCO2 emission rate

(10,000 m3/year)

0.010

0.005

0.50
0

CO2 Emissions and CO2 Emission Rate

26.0

27.5

31.5

1.07

33.7

19.3

1.00

0.50

CSR Activities Supporting “NTN 100”

0.020

2.50
0.0146

For the fiscal year ended March 31, 2015, we set targetsof CO2 emissions of 320,000 tons/year, emission rate
reduction of 8% as compared with that of the year
ended March 31, 2007 (1.11 ton – CO 2/million yen). As aresult of reducing activities, emissions amounted to315,000 tons/year and the emission rate was reducedby 12.3% as compared with that of the year ended
March 31, 2007 (1.08 tons – CO 2/million years), both ofwhich met our targets.
For the fiscal year ending March 31, 2016, we set targetsof CO2 emissions of 337,000 tons/year and CO2 emission
rate reduction of 13% as compared with that of the year
ended March 31, 2007, (1.07 tons – CO2/million yen).

Emissions rate (kL/ million yen)

(10,000 tons / year)

2.00

CO2 emission targets achieved“NTN 100” Strategy

We have introduced modal shift switching the means oftransportation from trucks to railroads and ships as ameasure to reduce CO2 emissions during transportation,
and we pursued the improvement of efficiency by shortening the distance of truck transportation etc. as well.
In the year ended March 31, 2015, CO2 emissions werereduced by 12,900 tons/year and the emission rate was
reduced by 5.6% as compared with the previous year.
As for the year ending March 31, 2016, we will makeefforts to achieve the target of CO2 emissions set to
13,160 tons/year and of the emission rate to 0.0131.

10

We received a third party’s verification by SGS Japan Inc.
in order to secure confidence in the greenhouse gas
emissions from 47 business sites in Japan (22 producing
sites and 25 sales sites) and 16 business sites abroad(16 producing sites).

0

2007(Reference year)

2011

2012

2013

2014

2015 2016

0(Target)( Years ended/ending March 31)

Activities toward obtaining ISO 50001
in Germany (for an energy
management system)

Financial Section

German NTN Kugellagerfabrik (Deutschland)
G.m.b.H. has been preparing for the introduction of
ISO 50001 (for energy management systems) since2013. Starting with an analysis on energy consumption, we identified the points to be improved, set the
purpose and targets, formulated plans, and pursued
improvements, resulting in the CO2 emission rate at
the end of the year ended March 31, 2015 being
reduced by 5.8% as compared with that of theprevious year. We plan to obtain a certificate in
December 2015.

Environmental Activities Supporting “NTN 100”

Received a third party’s verification forCO2 emissions

Verification Statement

62

Environmental Activities Supporting “NTN 100”

Protecting Biodiversity
The NTN Group conducts nature conservation activities and strives topreserve biodiversity around its bases in collaboration with local residents
and NGOs, etc.
Preserving the Natural Environment andRepairing Ecosystems

NTN SHIKA CORP. was awarded the President Award by
Japan Greenery Research and Development Center.
This Award is based on the commendation system fora Factory with an Outstanding Green Space Environmentby the Ministry of Economy, Trade and Industry, which
was meant to honor factories and organizations whichhave outstanding achievements in improving/enhancing
the environment in and out of such factories. NTNSHIKA CORP. was highly evaluated for carrying out activities appropriate for maintaining the scenery of “Noto’s
Satoyama and Satoumi” as a Globally Important Agricultural Heritage through tree planting campaigns of“Kirishima azalea specimens in the Noto District”, arepresentative flower tree species in the Noto District,and beautification activities.

The President Award by the Japan Greenery
Research and Development Center

NTN Kigyo no Mori Events Held Around JapanNAGANO WORKS carried out activities for the undeveloped
woodland near the populated area under the “NTN Kigyo noMori” project in Komagane City, Nagano Pref. on June 1,
2014, and improved 5.7ha of the forest area. As a result,
we were granted a Certificate of Forest CO2 Absorption for
an amount of 164.4 t– CO2 by Nagano Pref. on March 27,
2015. Since the beginning of activities in 2006, we have
improved a total of 41.5ha of the forest area.
NTN KINAN CORP. carried out improvement activities

under the “Nagomi-no mori” project on November 22,
2014. Since the start in 2007, plantation of 2,000 trees
including sawtooth oaks, pin oaks, Quercus gilva, andmountain cherries, etc. has been carried out in the mountainand forest areas of about 1.0ha and it is estimated to lead to
30 to 40 tons of CO2 absorption in 10 years.

Participating members of the “Nagomi-no-mori”
in NTN KINAN CORP.

Volunteering for Environmental
Protection Activities

NTN employees regularly take part in locally held environmental activities. On May 17, 2014, employees of NAGANOWORKS and NTN KAMIINA CORP. and their family
members totaling 102 people jointly participated in the “21stEnvironmental Picnic in the water system around the Tenryu
River”, held under the auspices of Ina Techno Valley
Regional Center of Nagano, and carried out cleaning
activities. They not only picked up trash such as empty canson the river bed, but also separated the collected pieces oftrash and carried them to the designated places. As a result,they keenly felt the significance and importance of rivercleaning and trash separation.

21st Environmental Picnic in the water system
around the Tenryu River

NTN-SNR’s Curitiba Factory (Brazil) participated in thecleaning activity for Fazenda/ Rio Grande River.

63

Certification of Forest CO2 absorption amount by
Nagano Pref.

Employees and the family members participating
in cleaning activities

We are working to reduce waste and water use as well as to makeefficient use of resources in each process including production anddistribution processes.
Efforts in Japan

Though the generated amount of waste increased by 4%
in the year ended March 31, 2015 due to an increase in
the production scale, the waste generation rate could be
reduced by 3.5% as compared with that of the previous
year by increasing the recycled amount by 4.2%
compared with that of the previous year. We willcontinue promoting waste reduction and recycling in theyear ending March 31, 2016.

Reduction of waste package in relation
to ferry transportation
When we transported production equipment fromPRODUCTION ENGINEERING R&D CENTER(Iwata)and Nanjing NTN Corp.(China), we could reduce
the waste at the site by 1.8 tons by switching fromthe conventional container transportation to ferrytransportation using trucks, which eliminated theneed for export packaging including wood frames
etc. Additionally, we could also contribute to the
reduction of transportation costs and shortening
the lead time of equipment installation.

“NTN 100” Strategy

Promote the Reduction of Waste andIncreasing Recycling at NTN Bases

NTN’s Vision

Protection of Resources

Generated amount of waste
70

59.8

60
100
(Reference)50

Total Landfilled amount
Reduction rate in waste per unit of production output

60.7

55.7

‒2.1%

64.8

64.4

1.6%

‒1.9%

‒ 4.8%

62.3

Generated amount‒18.6%40
30

CSR Activities Supporting “NTN 100”Recycled amount
Recycling rate

(1,000 tons /year)

99.7%

99.9%

99.8%

99.8%

99.9%

99.8%

59.6

55.6

60.6

62.1

64.7

64.4

2011

2012

2013

2014

2015

2016

In ferry boats

20
10
0

Recycled amount

Unloading from trucks(Target)(Years ended/ending March 31)

The NTN Group companies in Japan strives to preserve
water resources by grasping water use and reusing
discharged water as much as possible. In the year ended
March 31, 2015, the water use rate was reduced by 16.2%
against the target of reducing 10.0% ascompared with that of the year ended
March 31, 2011. In the year ending
March 31, 2016, we will work to meet
the target of reducing water use by
17.6% as compared with that of theCool water circulation tanks
year ended March 31, 2011.
of NTN SHIKA CORP.

Water usage

GroundwaterIndustrial water
228

Tap water
Reduction in Emissions rate

200

211

202

196

190
100

‒6.1%

‒5.3%

‒16.2%‒17.6%

2013

101

2012

2013

100
(Reference)

‒3.0%

131

129

2015

2016

110

50

0

50

2012

96

China

‒7.5%

100

2011

Americas
EuropeAsia
Reduction in Emissions rate

150

100
(Reference)

150

0

Water usage

2014

2015

2016

(Target)( Years ended/ending March 31)

2014

Financial Section

200

234

The NTN Group companies overseas also set a reduction
target of water use (rate) starting from the current fiscal
year, and strives to preserve water resources.
In the year ending March 31, 2016, we will work tomeet the target of reducing water use by 3.0% ascompared with that of the year ended March 31, 2015.

(10,000 m3/year)(10,000 m3/year)

250

Efforts Overseas

Environmental Activities Supporting “NTN 100”

Reduced water use at each business site

(Target)( Years ended/ending March 31)

64

Environmental Activities Supporting “NTN 100”

Management and Reduction of Environmentally
Hazardous Substances
We are managing and reducing environmentally hazardous substances
while complying with worldwide laws and regulations.

Management of Environmentally
Hazardous and Harmful Substances
Response to Environmental Regulations

The NTN Group complies with chemical substance restrictions around the world by keeping a close watch on
changing restrictions and constantly testing for what substances are contained in the raw materials, parts, andmaterials it procures. We strive to manage and reduce the amount of environmentally hazardous and harmful
substances we use.

[REACH Specifications]Switch Completed from Rubber
Containing Phthalate Esters

Phthalic esters as prescribed in “REACH Specifications”
in Europe reached the date for switchover in February
2015. In preparation for such switchover, we had been
replacing procurement rubber products used by ourGroup with those with no phthalic esters, and have
replaced all products intended for the EU market.

[PRTR Law]

Total elimination of
N,N-Dicyclohexylamine

Strengthening of waste water treatment
at KUWANA WORKSIn November 2014, KUWANA WORKS introduced a water
quality monitoring system using a cloud system for thewaste water treatment plant. From PCs and tablet devices,
we can access the records of discharged water amount andwater quality indices including pH, nitrogen, phosphorus,
and COD etc. on the cloud system without being limited in aplace and a time, which allows us to inform the persons incharge of any abnormality and make emergency responses
by unitarily managing all such information with PCs.

For the fiscal year ended March 31, 2015, we set a
company-wide target of totally reducing N,N-Dicyclohexylamine, a PRTR designated substance contained inmetal cutting and grinding fluids, and we could totallyeliminate its use by January 2015.

[Law Concerning Special Measures against PCB Waste]

Disposed of 9 high-voltage transformer
and 5 reactors

In accordance with the Law Concerning Special
Measures against PCB Waste, the NTN Group companies
in Japan systematically disposes of PCB. In the year
ended March 31, 2015, we completed the disposal of 9high-voltage transformers and 5 reactors at the former
TAKARAZUKA WORKS.

Water monitoring system

Unitary management using a cloud system

Measures against the leak of oils into
the ditches of the siteNTN KAMIINA CORP. has taken measures to repair theditches of the site and to prevent oil leakage. Considering the risk of causing pollution in first-grade rivers
when chemicals or oils surpassing the maximum capacityof oil separators flowed into the ditch and the common
piping of the industrial park, we installed a mechanism at
the place between the ditch and the oil separator for
disconnecting the outflowing path and collecting oils.

Loading into trucks
A mechanism was installed at the place between
the ditch and the oil separator for disconnecting
the outflowing path and collecting oils.

65

The NTN Group strives to enhance the level of environmental activities
throughout the Group by establishing and operating an Environment
Management System (EMS) in line with the international standard ISO 14001.

Environmental Management System

Based on the NTN Group’s Environmental Policy, thepurpose of which is to reduce environmental impact andensure our company’s continuous development, we havebuilt an environmental management system centeredaround the Company-wide Environmental Management
Committee. We also create and revise rules and manuals
when necessary as part of ongoing improvement efforts.

ISO 14001 management
system certificate(NTN-LYC)

RegionBrazilDate of certification
Year
Month
2015
12

Name of the business siteNTN Driveshaft do Brasil

Operating Sites with ISO 14001 Certification
Name of the business site
RegionDate ofcertification

Registration

Registration
body
Multi-site certification
1999 11 JSAE176
JSA(Operating sites included) Head Office, KUWANA WORKS, IWATA WORKS, OKAYAMAWORKS, NAGANO WORKS, NTN KONGO CORP., NTN ENGINEERING PLASTICS CORP., NTN
POWDER METAL CORP., NTN MIKUMO CORP., NTN CASTING CORP., NTN KINAN CORP.,HIKARI SEIKI INDUSTRY CO., LTD., NTN MIE CORP., NTN OMAEZAKI CORP., NTN FUKUROIJapan
CORP., ADVANCED TECHNOLOGY R&D CENTER, NTN KAMIINA CORP., NTN BIZEN CORP.,NTN HOUDATSU SHIMIZU CORP., NTN HAKUI CORP., NTN SHIKA CORP., NTN NOTO CORP.,NTN AKAIWA CORP.
NIPPON KAGAKU YAKIN CO., LTD.
2000
8 JQAEM0956
JQA
NTN TADO CORP.
2005
3 JSAE1058
JSA
Elgin Plant
2000
6 111994
LRQA
AMERICAN NTNBEARING MFG.CORP. Schiller Park Plant
2000
9 112115
LRQA
Macomb Plant
2000
6 111998
LRQA
NTN-BOWER CORP.
Hamilton Plant
2000
6 111999
LRQA
U.S.A.
NTN DRIVESHAFT, INC.
1999 12 A8478
UL
NTN USA CORP. Head Office
LRQA
2000
4 112005
NTK PRECISION AXLE CORP.
2008
4 4000717
LRQA
NTA PRECISION AXLE CORP.
2013
4 C0094458-EM1
NSF
1999
7 287
KPMG
Canada NTN BEARING CORP. OF CANADA LTD.
6 201167-2
LRQA
Germany NTN Kugellagerfabrik (Deutschland) G.m.b.H. 1999
NTN TRANSMISSIONS EUROPE
2003
1 19479
AFAQFranceNTN-SNR ROULEMENTS*
2009
1 0448-4
UTAC
NTN MANUFACTURING (THAILAND) CO.,2003
3 31634
TÜV
ThailandLTD.
Guangzhou NTN-Yulon Drivetrain Co., Ltd.
2005
4 104043247
TÜVShanghai NTN Corp.
2005
7 CH05/0489
SGS
China
NTN-LYC (Luoyang) Bearing Corp.
2014 12 00615E20208R0M QAC
NTN NEI Manufacturing India Private Ltd.
2011
6 104071903
TÜV
India
Company

Plant

Year Month

Registration No.

* Obtained through Multi-site certification

NTN Environmental Policy

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 the impact of our corporate activities on the environment.
1. Development and sales of environmentally-friendly products• NTN will contribute to world-wide energy conservation by developing and providing eco-products using tribological technologies
and high precision processing technologies.

Financial Section

2. Reduction of environmental impact• NTN will work to prevent global warming by improving energy
efficiency activities throughout the business process, from procurement of materials and parts, through to manufacture, distribution
and sales.
• NTN will strive to reduce waste by paying heed to efficient use of
raw materials, and thorough application of the 3Rs (reduce, reuse,recycle).
• NTN will avert environmental pollution by rigorous management of
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 implementation ofthorough 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 andinternal rules, and keeping to them.
• NTN will establish an environmental management organization andoperational methods, and will conduct environmental audits tomaintain and improve corporate environmental management
systems. We will also advance communication with society at large
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.

Environmental Activities Supporting “NTN 100”

The NTN Group continues to work to obtain ISO 14001
through the collective method for multiple sites (multi-sitemethod) in Japan. NTN AKAIWA
CORP. obtained the ISO certificate
through the multi-site method in
September 2014, making all 25
business sites certificate-holders.
As for overseas business sites, on
the other hand, after NTN-LYC(Luoyang) Bearing Corp. in China
had obtained the certificate in March
2015, 17 of all 18 business sites
have the certificate.

Operating sites expected to be ISO 14001 certified

CSR Activities Supporting “NTN 100”

Our 25 domestic business sites and 17
overseas business sites have obtained
ISO 14001

During the year ending March 31, 2016, NTN Drive
shaft do Brasil is expected to obtain the certificate in
December 2015.
“NTN 100” Strategy

Building a Management System Basedon “NTN Environmental Policy”

NTN’s Vision

Environmental Management

4. Activities to contribute to society and protect the naturalenvironment• By actively participating in regional social contribution activities andnatural environmental protection activities, NTN will interact with theimmediate community, aiming to develop together with the local region.

66

Environmental Activities Supporting “NTN 100”

Response to Laws
Response to legal reforms

The NTN Group keeps abreast of the latest environmental
laws and regulations and keeps relevant departments andsections up to date with the necessary information.
During the year ended March 31, 2015, we continued
to build up a management system in line with the Act for
Rationalized Use and Proper Management of Fluorocarbons (enforced on April 1, 2015), the Revised Water
Pollution Control Act (enforced on June 1, 2012), and the
Revised Asbestos Trouble Prevention Rule (enforced onJune 1, 2014). Since the Act for Rationalized Use andProper Management of Fluorocarbons addresses all
business sites, in particular, the Company-wide
Committee on Environment Management explained themethods for collecting and decomposing fluorocarbons,contents of the revision, targeted components, management obligation and maintenance/inspection documents,
etc., and ensured understanding.

Environmental Communication
Display at the “BOSAI Industry Fair in
Sendai”

NTN takes part in environment- and technology-relatedtrade fairs in order to promote its products and technologies that contribute to protecting the environment.
On March 16, 2015, we displayed a vertical axis windturbine, a horizontal axis wind turbine and a micro hydroturbine adopting the blade technology of GLOBAL ENERGY.
CO., LTD. at the “BOSAI Industry Fair in Sendai”. The
vertical axis wind turbine and thehorizontal axis wind turbine weredisplayed in their operating status,and many of the visitors showed
keen interest in the mechanism ofgenerating power from a gentle
wind into the blower without any
The compact wind turbinesdisplayed at the “BOSAI
wind noise, etc.
Industry Fair in Sendai”

conducted between operating sites. Also part of
improving the level of environmental management
systems are external audits by ISO certification institutes.
In the fiscal year ended March 31, 2015, internal
audits were held at all bases and cross-audits were heldat seven sites. ISO audits were held at 12 sites in July
2014, and these sites kept their multi-site certification
designation up to date without any indication of violation.

Number of Internal Environmental
Auditors Reaches 292

The NTN Group in Japan held its first training session toincrease the number of internal environmental auditors.
In the fiscal year ended March 31, 2015, internal
environmental auditor training with 24 participants from
16 sites was held in December led by a top instructorfrom L.M.J. Japan, an institute that trains ISO auditors.
This training brought the number of NTN internal environmental auditors to a total of 292.

Environmental Education
Education Geared to Workplace Needs

The NTN Group strives to raise environmental awarenessby holding environmental education for each level of
employees at the head office, business sites, and groupcompanies, gearing sessions to particular characteristics
and conditions of each location.
In July 2014, OKAYAMA WORKS provided educationon the importance of managing environmentallyhazardous materials and poisonous/deleterious
substances to 13 employees in their 3rd year of employment at the Technical Workshop of Okayama, a training
institution for young engineers.
In June every year, HIKARI SEIKI INDUSTRY CO.,LTD. implements training to respond to oil leakage under
the assumption of a situation where oil leaks from awaste oil tank.

Environmental Audits
Two Types Internal Audits Conducted

The NTN Group in Japan has internal site audits (once ayear), which are conducted by each site’s internal
auditors, and cross-audits (every three years), which are

67

Education in Okayama Technical Response training for an oil leakWorkshopby HIKARI SEIKI

NTN’s Vision

Third-Party Opinion
NTN Report 2015 Third-Party Opinion
This report combines both the Annual Report and the CSR Report in a single booklet.
Moreover, to position as an integrated report, I suppose that it should be considered with“integrated thinking.” It is stated that “NTN contributes to build a sustainable society by taking its
business activities as creation of a diverse range of value through a diverse range of capital investment” in this report. I regard this as a commitment for society and evaluate it.

ProfileAfter working at a trading company
and auditing corporations, hebecame the lecturer in the Facultyof Economics at Takasaki City
University of Economics from 1997,
and assumed his present positionin 2008.
Other appointments include
being a member of the Central
Environment Council’s Special
Committee on the Environment and
Finance (2009 to 2010), chair of theJapanese Institute of Certified
Public Accountants’ TechnicalCommittee on Sustainability
Information Disclosure (2005 to2010), and auditor-secretary of theSociety for Environmental
Economics and Policy Studies(SEEPS) (2008 to 2014).
His areas of expertise coverresponsible investing, disclosure of
non-financial information andenvironmental accounting.
Major publications include“Responsible Investment” (Iwanami
Shoten, winner of SEEPS Commentary Award) and “The Environment
and Financial/Investment Trends”(author/editor, Chuo Keizai-sha).

The stakeholder dialog that was pointed out last year’s Third-Party Opinion was held for the
first time. I hope to see more efforts in adopting feedback from various ranges of experts outsideof the company.

Responding to the Third-Party Opinion

Hiroshi Nakano

Financial Section

I would like to extend my sincere appreciation to Mr. Mizuguchi in providing his valuable opinions
in the lead-up to this "NTN Report 2015." This report represents various initiatives we are taking,including business activities as part of the new medium-term management plan "NTN 100"(manage growth, manage profitability and manage foundation), efforts to CSR activities such associal contributions, environmental conservation activities and enhancing compliance with regulations. While we were commended on the overall integrity of the report, we also received expectations and opinions on visualizing the results of value creation and managing global personnel. We
will take this feedback seriously and refer to them as informative advice for the further activities in
the future.
As a global company, we will focus on value creation as well as ensuring the greater level ofcompliance and taking a better approach to diversity and governance in order to become arespected company in all regions and to contribute to international society.

Environmental Activities Supporting “NTN 100”

NTN has been endeavoring to comply with the law and regulations. One of its efforts is establishing the Fair Trade Monitoring Committee in 2012 followed by on-site inspections related to theJapanese Antimonopoly Act and EU competition law in 2011.
I highly evaluate the progressive activities such as establishing the Compliance Committee andholding CSR Global Meeting. If there were risks, it could be the so-called gray area in which one
tends to lapse into under significant pressure to achieve performance targets, rather than any
intentional form of fraud. However, once it is considered as a form of fraud, it could have a serious
impact on corporate value. Since NTN has set the aggressive targets of sales and profit, it isimportant to define the priority of long-term value rather than the immediate profit. Furthermore,
continuing to inform an accurate message to all employees is essential.

Professor, Faculty of Economics, Takasaki
City University of Economics

CSR Activities Supporting “NTN 100”

Next, I highly evaluate that NTN considers the value creation through human capital such as“NTN Technical Skills Competition” and “Global QC Circle Convention.” I evaluate promoting localization with the number of 66% of employees overseas in proportion to the overseas sales amountto more than 70%. One thing I would like to point out is that there are not enough explanations
about personnel treatment for more than 60% employees overseas. For instance, I wonder thefollowing points; how the promotion system is like for local employees and the actual ratio of
employees being in managerial positions. Not only these points, explanations of present conditions, but also the disclosure of basic policy and objective would lead to social evaluation, especially in foreign countries. Therefore, I expect NTN to consider these points for further development.

Takeshi Mizuguchi“NTN 100” Strategy

In fact, high-efficiency natural energy business and service solution business relevant to windturbines, tunnel, bridge and others, are mentioned in NTN’s new medium-term management plan
“NTN 100”. I consider these businesses could be regarded as integrated thinking, which natural
capital and social value creation lead to the company’s profit. In addition, I am convinced of theindication “Bearings themselves are “eco-products” that help reduce environmental impact”, andalso the significance of developing products contributing to the environment is stated in the firstprinciple of the Environmental Policy. However, this report does not represent the outcomes that
how NTN’s products contribute to environmental value creation as a whole. Although, it may bedifficult for the companies with B to B business model to measure the contribution throughproducts, some methods for indicating its contribution such as quantification and visualization
would be demanded as long as considering it as company’s strong point.

Director
CSR Headquarters
Corporate General Manager

68Financial Review
Net Sales and Earnings

Sales Performance

Consolidated net sales for the fiscal year ended March 31, 2015
were 701,900 million yen, an increase of 62,929 million yen (9.8%)
year-on-year. Overseas sales totaled 510,440 million yen, an
increase of 50,551 million yen (11.0%) year-on-year. Overseas sales
accounted for 72.7% of net sales overall (Americas 28.9%, Europe
24.4%, Asia and others 19.5%), an increase of 0.7 percentage
points from the previous fiscal year.

The cost of sales was 570,197 million yen, down 1.1 percentage
points and representing 81.2% of consolidated net sales. This was
mainly due to decreased proportional costs.
Selling, general and administrative (SG&A) expenses were 87,852
million yen, representing 12.5% of consolidated net sales, the samerate as the previous year.

Net Sales and Earning by Business Sector

Factors contributing to increased earnings included a decrease in
fixed costs such as labor, favorable effects of exchange rates,
decreased proportional costs, and the dissolution of temporal
expenses incurred in because of an increased burden on productionlines resulting from higher sales in the Americas. As a result, theoperating income for the term was 43,851 million yen, up 10,847
million yen over the previous fiscal year.
Other expenses amounted to a net expense of 6,788 million yen.
Major contributing factors were income totaling 6,430 million yen,including a gain on sale of fixed assets of 4,287 million yen, andexpenses that included payment of customs duties for past financial
years of 3,567 million yen, losses related to Anti-Monopoly Act of
2,094 million yen, and loss on liquidation of affiliated companies of
432 million yen.
As a result, the profit before income taxes was 37,063 million
yen, an improvement from the 2,451 million yen loss of the previous
fiscal year. The net income per share was 43.91 yen for the year
under review.
Although dividends for the full fiscal year were planned at 2.5 yen,
it was increased by 1 yen to 3.5 yen per share in view of overall factors
such as performance trends and the management environment.

In the aftermarket, development of new demand, increased customer
demand and exchange-rate effects resulted in net sales of 112,433
million yen. Operating income was 19,237 million yen.
In the industrial machinery market, increased customer demandand exchange-rate effects resulted in net sales of 108,993 million
yen. Operating income was 6,261 million yen as a result of increased
sales and exchange-rate effects.
In the automotive market, increased customer demand andexchange-rate effects resulted in net sales of 480,474 million yen.
Operating income was 18,351 million yen due to the effects ofincreased sales, decreased proportional costs and exchange-rate
effects, despite the increased in fixed costs resulting from anadditional burden imposed on production lines in coping withincreased sales in the Americas.

Net Sales and Earning by Region

In terms of sales in Japan, looking at aftermarket applications, there
was an increase in customer demand for industrial machinery
aftermarket applications, and sales of industrial machinery
applications increased due to sales in general machinery and aircraft
applications. Regarding automotive applications, sales grew as aresult of expanded demand from customers. The result was net
sales of 191,460 million yen (up 6.9% over the previous fiscal year.)In terms of sales in Americas, there was an increase inaftermarket applications. Sales increased in industrial machinery
applications, including in construction machinery, and sales ofautomotive applications increased on the back of mass production
in new products, an expansion in customer demand and otherfactors. The result was net sales of 202,561 million yen (up 16.0%),
helped partly by exchange-rate effects.
In terms of sales in Europe, there was a fall in sales in aftermarket
and automotive applications, but increased sales in industrial
machinery applications thanks to sales in wind turbine, aircraft andother applications. The result was net sales of 171,218 million yen(up 3.0%), helped partly by exchange-rate effects.
In terms of sales in Asia and other areas, looking at aftermarket
applications, there was an increase in industrial machinery aftermarket
applications thanks to increased customer demand. Sales also
increased in wind turbine and rolling stock applications in the industrial
machinery market. Regarding automotive applications, sales increased
thanks to mass production in new projects and increased customer
demand in China. The result was net sales of 136,661 million yen (up14.8%), helped partly by exchange-rate effects.

Net Sales

Net Sales by Business
Segment / Business Sector

Earnings

R&D and Capital Expenditures

R&D Costs

R&D costs for the fiscal year under review were 18,088 million yen(up 267 million yen over the previous fiscal year), representing 2.6%of consolidated net sales.
In the industrial machinery applications, quick and smooth launchof new businesses in the natural energy fields, including small windturbines has been promoted. Large and offshore wind turbines are
positioned as key business sectors, along with ongoing technicaldevelopment that includes Condition Monitoring System (CMS) for
wind turbines, as well as other rolling stock, aircraft, machine tools,
and construction machinery, which all require state-of-the-art
bearing technology. The NTN Group is working to reduce
environmental impact by more compact, lighter weight productswith long life and low-torque, and promote development new
products that meet customer needs for high precision and highspeed, as well as elemental technologies that will make NTN morecompetitive, and high-value added products by unitization andmodularization of peripheral parts such as sensors with bearings.
In the automotive applications, in addition to boostingproductivity of existing products such as bearings and driveshafts,
the NTN Group is also making improvements to products that have

Net Sales by Region

Operating Income /Operating Margin(Billions of Yen)

(Billions of Yen)

(Billions of Yen)

(Billions of Yen)

(%)

800

800

800

50

10

600

600

600

40

8

30

6

400

400

400
20

4

10

2

0

0
2010 2011 2012 2013 2014 2015
(Years ended March 31)■ Operating income［Left axis］
Operating margin［Right axis］

200

0

69

Cost of Sales and Selling, General and Administrative(SG&A) Expenses

200

2010 2011 2012 2013 2014 2015
(Years ended March 31)

02002010 2011 2012 2013 2014 2015
(Years ended March 31)■ Bearing ■ Constant-Velocity Joints■ Precision Equipment and Other Product■ Aftermarket ■ Industrial Machinery■ Automotive

02010 2011 2012 2013 2014 2015
(Years ended March 31)■ Japan ■ Americas■ Europe ■ Asia and Others

Capital Expenditures
and Depreciation

Inventories /Inventory Turnover Ratio(Billions of Yen)(%)

(Billions of Yen)

(Billions of Yen)

30

6

60

200

8

400

20

4

150

6

300

10

2

100

4

200

0

0

‒10

‒2

50

2

100

0
2010 2011 2012 2013 2014 2015
(Years ended March 31)■ Inventories［Left axis］
Inventory turnover ratio［Right axis］

0‒42010 2011 2012 2013 2014 2015
(Years ended March 31)■ Net income (loss)［Left axis］
Ratio of net income (loss) to sales［Right axis］(Times)(Billions of Yen)

50
40
30

‒20

Interest-Bearing Debt

NTN’s Vision

Net Income (Loss) / Ratio of
Net Income (Loss) to Sales

20
10
0

2010 2011 2012 2013 2014 2015
(Years ended March 31)■ Capital Expenditures ■ Depreciation

Capital Expenditure

Environmental Activities Supporting “NTN 100”

Financial Position and Cash Flows

Financial Section

Total current assets at March 31, 2015 amounted to 460,980 million
yen, a year-on year decrease of 6,768 million yen (or 1.4%). Major
factors included a 12,765 million yen increase in finished goods &purchased goods, a 9,275 million yen increase in notes andaccounts receivable, a 26,000 million yen decrease in securities anda 16,652 million yen decrease in cash and bank deposits. Total fixed
assets at the fiscal year-end amounted to 395,297 million yen, an
increase of 15,008 million yen (or 3.9%) against the end of theprevious fiscal year. Major factors included an increase of 6,662
million yen in property, plant and equipment, and an increase of
11,032 million yen in investment securities. As a result, total assets
amounted to 856,277 million yen, a year-on-year increase of 8,240
million yen (or 1.0%).
Current liabilities were 301,530 million yen, a year-on-year
decrease of 13,688 million yen (or 4.3%). Major factors included anincrease of 57,778 million yen in electronically-recorded monetaryclaims, a decrease of 45,319 million yen in notes and accounts

payable, and a decrease of 21,568 million yen in “Other”, due toaccrued liabilities for loss related to Anti-Monopoly Act and otherfactors. Total long-term liabilities amounted to 292,188 million yen, a
year-on-year decrease of 27,262 million yen (or 8.5%). This is mainly
due to a 13,736 million yen decrease in long-term loans andlong-term lease obligations, and a 9,171 million yen decrease inliabilities for retirement benefits. As a result, total liabilities were593,718 million yen, a year-on-year decrease of 40,950 million yen(or 6.5%).
Total net assets were 262,559 million yen, a year-on-yearincrease of 49,190 million yen (or 23.1%). Major factors included anincrease of 16,629 million yen in translation adjustments, an increaseof 23,272 million yen in retained earnings, and an increase of 6,489
million yen in net unrealized holding gain on securities.
The equity to capital ratio was 28.6%, up 5.1 percentage points.
Total net assets per share, based on the number of shares
outstanding over the end of the previous fiscal year, were 461.21
yen per share (an increase of 86.53 yen per share over the previous
fiscal year). Interest-bearing debt amounted to 359,105 million yen,a decrease of 22,662 million yen (5.9%) from the end of the previous
fiscal year. Factoring in the 11,727 million yen increase fromcurrency effects, the actual decrease was 34,389 million yen. The
ratio of interest-bearing debt to total assets was 41.9% (down 3.1
percentage points compared to the end of the previous fiscal year).
Net working capital was 159,450 million yen, an increase of
6,920 million yen from the end of the previous fiscal year. The
current ratio was 152.9% (up 4.5 percentage point over the end of
the previous fiscal year).
The inventory turnover ratio was 3.81 times (0.03 times downover the end of the previous fiscal year), while the turnover ratio of
total assets was 0.82 times (up 0.07 times).
Net cash provided by operating activities was 25,121 million yen(a year-on-year decrease of 49,397 million yen, or 63.6%). Major
items included proceeds of 40,392 million yen from depreciation andamortization, 37,063 million yen from gains before income taxes andminority interests, and 11,794 million yen from trade payables. In
contrast to these items, payments included a decrease of 27,926
million yen in accrued liabilities related to a loss related to Antimonopoly Act, an increase in inventories of 10,522 million yen, adecrease of 8,559 million yen in liabilities for retirement benefits, anddisbursement of 8,066 million yen for payment of income taxes.
Net cash used in investment activities was 31,294 million yen (ayear-on-year decrease of 2,837 million yen, or 8.3 %). This was
mainly due to expenditure of 31,131 million yen in the purchase ofproperty, plant and equipment.
Net cash used in financing activities was 37,492 million yen(6,596 million yen was provided by financing activities in the previous
fiscal year). Major factors included expenditure of 37,463 million yen
in the repayment of long-term loans and a net reduction of 27,390
million yen in short-term loans, compared to 29,524 million yen inproceeds from long-term loans.
After adding an increase of 1,772 million yen in translation
adjustments to the above changes, cash and cash equivalents as ofthe end of the current fiscal year were 87,778 million yen, adecrease of 41,893 million yen (32.3%) from the previous
consolidated fiscal year end.
Free cash flow, the difference between net cash provided byoperating activities and net cash used in investing activities,
amounted to -6,173 million yen. The proportion of net cash provided
by operating activities to net sales was 3.6%.

CSR Activities Supporting “NTN 100”

For NTN Corporation and its consolidated subsidiaries, the main
focus of capital 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 11,177 million yen, withprojects including the expansion of plant buildings and constantvelocity joint (CVJ) production equipment at NTN FUKUROI CORP.,
and the expansion of bearing production equipment at NTN's
OKAYAMA WORKS.
In the Americas, capital expenditures were 5,186 million yen, withprojects including the construction of a new building with a new plantat NTN MANUFACTURING DE MEXICO, S.A.DE C.V., expansion of
CVJ production equipment at NTN DRIVESHAFT, INC. and expansionof bearing production equipment at NTN-BOWER CORP.
In Europe, capital expenditures were 6,034 million yen, with projects
including the expansion of plant buildings at and the expansion of
bearing production equipment at NTN-SNR ROULEMENTS.
In Asia and other areas, capital expenditures were 9,058 million
yen. Projects included the construction of a new building andinstallation of CVJ production equipment with a new plant at
XIANGYANG NTN-YULON DRIVETRAIN CO. LTD, the expansion of
bearing production equipment at SHANGHAI NTN Corporation, theexpansion of CVJ production equipment at Guangzhou NTN-YULON
Drivetrain Co. Ltd, and the expansion of bearing production
equipment at NANJING NTN CORP.
After adjusting for -189 million yen in equipment transfers
between segments, total capital expenditures for the fiscal year
under review were 31,266 million yen.
All expenditures were funded from internal funds and short-termloans. Depreciation for the fiscal year under review amounted to40,392 million yen (up 1,077 million yen from the previous fiscal year).

2010 2011 2012 2013 2014 2015
(Years ended March 31)“NTN 100” Strategy

already been introduced to the market and started mass-production
such as the Ball Screw Drive Module for Electric Hydraulic Brake,
which dramatically improves the efficiency of hybrid cars and othernext-generation vehicles, and the Mechanical Clutch Unit (MCU) for
Next-generation Steering, as well as preparing to expand the market
for these products. Module products are also being developed andproposed with a focus on vehicle functional safety standards.

070

Main Financial Indexes: 11-Year SummaryYears ended March 31

2005

2006

2007

2008

Net sales . . . . . . . . . . . . . . . . . . . . . . . . (Millions of yen)

388,349434,837

483,818

533,985

Operating income . . . . . . . . . . . . . . . . . (Millions of yen)

33,20137,645

46,79349,612

Operating margin . . . . . . . . . . . . . . . . . . . . . . . . . . .  (%)

8.5

8.7

9.7

9.3

Income (loss) before income taxes . . . . . (Millions of yen)

26,58630,37045,17044,313

Net income (loss) . . . . . . . . . . . . . . . . . . (Millions of yen)

16,74019,55027,01427,431

Capital expenditures . . . . . . . . . . . . . . . (Millions of yen)

49,67049,284

59,34759,504

Depreciation . . . . . . . . . . . . . . . . . . . . . . (Millions of yen)

24,87028,58632,69339,547

R&D costs . . . . . . . . . . . . . . . . . . . . . . (Millions of yen)

14,952

14,771

14,221

15,006

Total assets . . . . . . . . . . . . . . . . . . . . . . (Millions of yen)

516,578

561,494

611,944629,464

Net assets/Shareholders’ equity . . . . . . . (Millions of yen)

157,952

183,247

215,815

216,401

Inventories . . . . . . . . . . . . . . . . . . . . . . . (Millions of yen)

93,167

107,047

107,131

109,969

Interest-bearing debt . . . . . . . . . . . . . . . (Millions of yen)

176,185

183,198

197,911

212,874

Number of employees . . . . . . . . . . . . . . . . . . . . . . . . . . 

12,788

14,631

17,306

18,960341.93396.73445.61445.98- Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  (Yen)

35.83

41.94

58.34

58.43

- Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  (Yen)

32.94

38.55

53.74

54.59

Cash dividends . . . . . . . . . . . . . . . . . . . . . . . . . . .  (Yen)

8.50

11.00

16.00

19.00

Inventory Turnover Ratio . . . . . . . . . . . . . . . . . . (Times)

4.2

4.1

4.5

4.9

Net D/E ratio . . . . . . . . . . . . . . . . . . . . . . . . . .  (Times)

0.79

0.80

0.79

0.86

Net income (loss)/Average total assets (ROA) . . . . . . (%)

3.4

3.6

4.6

4.4

Net income (loss)/
Average shareholders’ equity (ROE) . . . . . . . . . . . (%)

11.1

11.5

13.8

13.1

NTN-ROI*2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (%)

7.7

7.7

8.6

8.6

Shareholders’ equity ratio . . . . . . . . . . . . . . . . . . . . . (%)

30.6

32.6

34.2

33.3

FOR THE YEAR DATAYEAR-END DATAPER SHARE DATA
Net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  (Yen)
Net income (loss):

OTHER INFORMATION*1. In Financial Section, U.S. dollar amounts have been converted from yen, for convenience only, using the approximate exchange rate on March 31,2015,
which was U.S.$1 = ¥120.17*2. NTN-ROI = Net operating income after tax / (Inventories + tangible fixed assets)

71

2009

2010

2011

2012

2013

2014

2015

527,100

452,746

530,056

543,468

539,595

638,971

701,900

5,840,892

9,479

1,399

24,56020,724

7,278

33,00443,851

364,908

1.8

0.3

4.6

3.8

1.3

5.2

6.2

6.2

(10,104)(1,838)22,855

16,357(13,898)(2,451)37,063

308,421(8,985)(2,015)

14,3995,993(14,196)(14,648)

23,353

194,333

49,59421,50429,70054,44048,97933,162

31,266260,181

45,75940,70235,93634,17534,841

39,31540,392

336,124

17,402

14,687

15,697

17,157

16,174

17,821

18,088150,520

627,613618,802632,001

693,258

768,462

848,037

856,277

7,125,547

192,223

214,551

210,353

212,126

211,743

213,369

262,559

2,184,897

140,466

126,663

136,985

155,107163,287

166,484

184,128

1,532,229

275,996

231,638

223,284

271,978

360,802381,767

359,105

2,988,308

20,67917,95919,172

20,78921,39822,15623,36023,360376.77374.19376.05370.19375.84374.68461.21

3.84(19.14)(4.00)

27.08

11.27

(26.69)(27.54)

43.91

0.37

–

–

–

–

–

–

–

–

13.00

8.00

10.00

10.00

0

2.00

6.00

0.05

3.8

3.6

3.9

3.5

3.3

3.8

3.8

1.38

1.00

0.92

1.11

1.37

1.27

1.11

(1.3)

(0.3)

2.3

0.9

(1.9)

(1.8)

2.7

(4.3)

(1.1)

7.2

3.0

(7.2)

(7.3)

10.5

1.5

0.2

4.2

3.4

1.1

4.6

6.3

28.2

32.2

31.6

28.4

26.0

23.5

28.6

NTN’s Vision

Thousands of US dollars*1(except per share amounts)

2015“NTN 100” Strategy
CSR Activities Supporting “NTN 100”
Environmental Activities Supporting “NTN 100”
Financial Section

72

Risk Factors
Business results and the financial position of the NTN Group are
subject to the following risks. It should be noted that theforward-looking statements contained in the following reflect
judgments of the NTN Group as of the submission date of our
securities report (June 25, 2015).

1) Economy
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.
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 business developmentof the NTN Group.
Overseas subsidiaries’ foreign currency-denominated businessresults and financial positions are converted to yen for the preparation of consolidated financial statements. Moreover, many exporttransactions with overseas customers of the Company are
conducted in foreign currencies. Although the NTN Group hedges
risks through forward foreign exchange contracts and expansionof 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 for pricereductions 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.
4) Rise in Raw Materials Prices
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.
5) Disasters and Accidents
Production plants and facilities of the NTN Group and its transaction counterparts are exposed to the risk of damage from natural
disasters such as earthquakes, floods, and fires. Although the NTNGroup has put into place crisis management systems and stands
ready to engage in measures to contain damage as much as
possible, risks cannot be completely eliminated. Business performance and the financial status of the NTN Group may be affectedby a natural disaster or by accidents.

736) Dependence on Specific Industries
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 to achievea balanced sales structure, a rapid shift in demand in the automotive industry could potentially affect the NTN Group’s businessresults and financial position.
7) Product Defects
To ensure product quality, the NTN Group works to satisfy customers’ requirements concerning product functions and specifications,and strives to provide appropriate quality and product safety byenforcing quality assurance globally. However, a substantial productdefect leading to a serious accident, claim for damages, or productrecall could entail huge product warranty costs and potentially affectbusiness performance and the financial position of the NTN Group.
Although the NTN Group has taken out global product liability
insurance, complete coverage for loss is not possible.
8) Intellectual Property
The NTN Group generates a wealth of innovative technologies andknow-how in the process of new product development, representing valuable intellectual property for which the NTN Group files
patent applications to protect its rights. However, businessperformance and the financial position of the NTN Group may beaffected if a legal challenge is initiated against its intellectual
property or if its intellectual property is infringed by a third party.
9) Global Operations
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
10) Statutory Regulations
The NTN Group is subject to the various laws and regulations (taxlaws, environmental laws, occupational safety and health laws,
economic statutes such as antimonopoly laws and anti-dumping
laws, trade and exchange laws, and securities trading regulations)of the countries and regions in which it does business.
The NTN Group strives to abide by these laws and regulations
and conduct fair business activities. However, if the NTN Group isever be subject to litigation or involved in legal proceedings
because of a violation of a law or regulation, and if the decision ofsuch litigation or legal proceedings goes against the Group, thismay have an affect on the business performance or the financial
state of the Group. As well, if these laws or regulations change, or
if new unforeseen laws or regulations are enacted, these also may
have an affect on the business performance or the financial stateof the Group.

Consolidated Balance Sheet
Thousands of
U.S. dollars (Note 1)

Millions of yen

2015

2015

2014

¥ 87,778¥ 129,671

1,321

2,076

NTN’s Vision

March 31, 2015

AssetsCurrent assets:
Cash and cash equivalents (Note 14)
Short-term investments (Note 14)$

730,449
10,993

Trade receivables (Note 14):
Notes

13,027

12,261

Accounts

131,511

123,001

1,786

96

Allowance for doubtful accounts

(939)

(895)

145,385

134,463

Inventories (Note 5)

184,128

166,484

Deferred income taxes (Note 24)

11,062

7,952

Other current assets (Note 14)

31,30627,102

460,980

467,748

Total current assets

14,862(7,814)

1,209,828
1,532,229
92,053

260,5143,836,066

34,23732,632

Buildings and structures (Note 2(g))

198,483

190,395

Machinery, equipment and vehicles (Note 2(g))

785,762746,301

284,905

1,651,685
6,538,753
180,885

21,737

19,914

1,040,219

989,242(724,167)(679,851)

316,052

309,391

2,630,040

Investment securities (Notes 7 and 14)

40,25130,413334,950

Investments in unconsolidated subsidiaries and affiliates (Note 14)

16,734

15,540

193

266

Deferred income taxes (Note 24)

9,377

16,978Other assets

12,6907,701

79,24570,898659,441¥ 856,277¥ 848,037$ 7,125,547

Construction in progress
Less accumulated depreciation(6,026,188)

Investments and other assets:

Goodwill

Total investments and other assets

See accompanying notes to the consolidated financial statements.

1,606

78,031

105,601

Financial Section

Total assets (Note 26)

139,253

Environmental Activities Supporting “NTN 100”

Property, plant and equipment, net (Note 26)

8,656,228

CSR Activities Supporting “NTN 100”

Property, plant and equipment, at cost (Note 6):
Land (Note 2(g))“NTN 100” Strategy

Electronically recorded monetary claims

108,405

1,094,375

74

Consolidated Balance Sheet
March 31, 2015

Thousands of
U.S. dollars (Note 1)

Millions of yen

2015

2014

2015

¥ 75,097¥ 100,756$ 624,923

45,83329,237

381,401

Notes

1,300

14,693

10,818

Accounts

59,791

91,717497,553

Liabilities and net assets
Current liabilities:
Short-term bank loans (Notes 8 and 14)
Current portion of long-term debt and lease obligations (Notes 8 and 14)
Trade payables (Note 14):57,778—

480,803

118,869

106,410989,174

7,919

3,424

65,898

4

—

33

1,562

1,602

12,998—35—

52,24673,754

434,768

301,530

315,218

2,509,195

Long-term debt and lease obligations (Notes 8 and 14)

239,456

253,192

1,992,644

Liability for retirement benefits (Note 9)

45,07754,248375,110

940

932

7,822

Deferred income taxes (Note 24)

2,564

3,479

21,336

Other long-term liabilities

4,151

7,599

34,543292,188319,450

2,431,455

54,34754,347452,251

Capital surplus

67,37067,370560,622

Retained earnings

106,128

82,856883,150

(559)

(534)

(4,652)

227,286

204,039

1,891,371

14,562

8,073

121,178

Electronically recorded obligations
Accrued income taxes (Notes 14 and 24)
Deferred income taxes (Note 24)
Provision for loss on support to a related company (Note 19)
Provision for surcharge payments under the Anti-Monopoly Act (Note 22)
Other current liabilities
Total current liabilities (Note 26)
Long-term liabilities:

Provision for product defect compensation

Total long-term liabilities (Note 26)
Contingent liabilities (Note 11)
Net assets:
Shareholders’ equity (Note 10):
Common stock:
Authorized – 1,800,000,000 shares
Issued – 532,463,527 shares in 2015 and 2014

Treasury stock, at cost:
670,098 shares in 2015 and 619,746 shares in 2014
Total shareholders’ equity
Accumulated other comprehensive income (loss):
Net unrealized holding gain on securities (Note 7)
Translation adjustments

14,901(1,728)124,000

Retirement benefit liability adjustments(11,478)(11,111)(95,515)

Total accumulated other comprehensive income (loss), net

17,985(4,766)

149,663

Minority interests

17,28814,096

143,863

Total net assets
Total liabilities and net assets
See accompanying notes to the consolidated financial statements.

75

262,559

213,369

2,184,897¥ 856,277¥ 848,037$ 7,125,547

Consolidated Statement of Operations
Thousands of
U.S. dollars (Note 1)

Millions of yen

Net sales (Note 26)
Cost of sales (Note 16)
Gross profit
Selling, general and administrative expenses (Note 16)
Operating income (Note 26)

87,85243,85180,03233,004

731,064
364,908

1,156(4,769)
987
4,287

928
(4,822)
706
—

9,620
(39,685)
8,213
35,674—(3,567)(2,094)
(432)
—
—
—
—
—
(2,356)(6,788)37,063

1,272—(27,024)—(2,013)(1,600)(1,421)(301)(35)(1,145)(35,455)(2,451)—(29,683)(17,425)(3,595)—————(19,606)(56,487)
308,421

12,156888
13,04424,019(666)¥ 23,353

6,744
4,887
11,631(14,082)(566)¥ (14,648)

101,156
7,390
108,546
199,875(5,542)$ 194,333

See accompanying notes to the consolidated financial statements.

Consolidated Statement of Comprehensive Income
Year ended March 31, 2015

Thousands of
U.S. dollars (Note 1)

Millions of yen

2015

2015

2014

¥ 24,019¥ (14,082)$ 199,875

6,489
17,513(284)

2,863
15,378
1,821

53,999145,735(2,363)

1,023
24,741¥ 48,760

1,980
22,042¥ 7,960

8,513
205,884$ 405,759¥ 46,104¥ 2,656¥¥$ 383,657$ 22,102

6,226
1,734

Financial Section

Income (loss) before minority interests
Other comprehensive income (loss) (Note 23):
Net unrealized holding gain on securities (Note 7)
Translation adjustments
Retirement benefit liability adjustments
Share of other comprehensive income of affiliates accounted
for by the equity method
Other comprehensive income, net
Comprehensive income
Total comprehensive income attributable to:Shareholders of NTN Corporation
Minority interests

Environmental Activities Supporting “NTN 100”

Income (loss) before minority interests
Minority interests
Net income (loss)$ 5,840,892
4,744,920
1,095,972

CSR Activities Supporting “NTN 100”

Income (loss) before income taxes and minority interests
Income taxes (Note 24):
Current
Deferred2014¥ 638,971
525,935
113,036“NTN 100” Strategy

Other income (expenses):
Interest and dividend income
Interest expense
Equity in earnings of affiliates
Gain on sales of fixed assets (Note 17)
Gain on contribution of securities to
employees’ retirement benefit trust (Note 7)
Payment of prior year customs duties
Loss on surcharge payments under the Anti-Monopoly Act (Note 18)
Loss on liquidation of a subsidiary
Loss on impairment of fixed assets (Note 6)
Provision for loss on support to a related company (Note 19)
Reorganization expenses (Note 20)
Restructuring costs (Note 21)
Provision for surcharge payments under the Anti-Monopoly Act (Note 22)
Other, net

2015

2015

¥ 701,900
570,197
131,703

NTN’s Vision

Year ended March 31, 2015

See accompanying notes to the consolidated financial statements.

76

Consolidated Statement of Changes in Net Assets
March 31, 2015

Millions of yen

Balance at April 1, 2013

Number ofshares in issue

Commonstock

Capitalsurplus532,463,527¥ 54,347 ¥ 67,370

Treasurystock,
at costRetainedearnings

Net unrealized
holding gain on
securities

Translation
adjustments

Retirement
benefit liability
adjustments

Total net
assets¥ 96,740¥ (517)Net loss———(14,648)—

Net effect of change inscope of consolidation
Purchases of treasury stock

—

—

—

764

—

—

—

—

—

—

—

(18)

—

—

Sales of treasury stock

—

—

—

—

1

—

—

—

—

1

Other changes

—

—

—

—

—

2,862

16,400(5,992)

2,257

15,527

Balance at April 1, 2014

532,463,527

54,347

67,37082,856

(534)

8,073

(1,728)(11,111)

14,096

213,369

Cumulative effect ofchange in accounting
principle (Note 3)
Restated balance atApril 1, 2014

—

—

—

2,312

—

—

—

—

—

2,312

532,463,527

54,347

67,37085,168

(534)

8,073

(1,728)(11,111)

14,096215,681

Cash dividends paid

—

—

—

(2,393)

—

—

—

—

—

(2,393)

Net income

—

—

—

23,353

—

—

—

—

—

23,353Purchases of treasury stock

—

—

—

—

(25)

—

—

—

—

(25)

Sales of treasury stock

—

—

—

—

0

—

—

—

—

0

Other changes

—

—

—

—

—

6,489

16,629

(367)

3,192

25,943¥ 54,347 ¥ 67,370¥ 106,128¥ (559)¥ 14,562 ¥   14,901¥ (11,478)¥ 17,288¥ 262,559

Minority
interests

Total net
assetsBalance at March 31, 2015 532,463,527¥ 5,211 ¥ (18,128) ¥ (5,119)

Minority
interests——¥ 11,839¥ 211,743—(14,648)

—

—

764

—

—

(18)

—

Thousands of U.S. dollars (Note 1)
Commonstock

Balance at April 1, 2014

Cumulative effect of change inaccounting principle (Note 3)
Restated balance at April 1, 2014

CapitalsurplusRetainedearnings$ 452,251 $ 560,622——

452,251

560,622

Cash dividends paid—

Net income—

Purchases of treasury stock
Sales of treasury stock
Other changes
Balance at March 31, 2015

Net unrealized
holding gain on
securities$ 689,490 $ (4,444)
19,240—Translation
adjustments

Retirement
benefit liability
adjustments$ 67,180 $ (14,380) $ (92,461) $ 117,301 $ 1,775,559
—

—

—

—

19,240708,730(4,444)

67,180(14,380)(92,461)

117,301—(19,913)

—

—

—

—

—

(19,913)—

194,333

—

—

—

—

—

194,333

—

—

—

(208)

—

—

—

—

(208)

—

—

—

0

—

—

—

—

0

—

—

—

—

53,998138,380(3,054)26,562

215,886$ 452,251 $ 560,622

See accompanying notes to the consolidated financial statements.

77

Treasurystock,
at cost$ 883,150 $ (4,652)$ 121,178 $ 124,000

1,794,799$ (95,515) $ 143,863 $ 2,184,897

Consolidated Statement of Cash Flows
Thousands of
U.S. dollars (Note 1)

Millions of yen

2014

2015

39,315
2,197
134(7,196)(5,860)
1,559
(122)
12
(255)
9,100
27,024
1,138

336,124
—
458
(291)
—
(333)
266
765
42
(71,224)(232,387)(7,398)(10)
30,058—(1,156)
4,769
459
(987)
(4,287)—5,000(6,892)(10,522)
11,794
2,654
71,0701,820(4,645)(30,058)—(5,000)(8,066)¥ 25,121

(999)
7,231
10,698(928)
4,822(1,420)(706)—(1,272)
1,864(7,197)9,105
14,804(4,039)96,558
1,576(4,912)(7,231)(10,698)—(6,235)¥ 69,058(83)
250,129—(9,620)39,685
3,819(8,213)(35,674)—
41,608(57,352)(87,559)
98,14422,085591,412
15,145(38,653)(250,129)—(41,608)(67,121)$ 209,046(78)(31,131)
5,117—(4,645)—(557)(31,294)(323)(33,351)—
1,251(1,843)(37)
172(34,131)(649)(259,058)
42,581—(38,654)—(4,635)(260,415)(27,390)
29,524(37,463)(11,594)
83,694(65,710)(227,927)
245,685(311,750)

980(2,393)(274)(476)(37,492)

801
—
(277)
(318)
6,596

8,155
(19,913)(2,280)(3,961)(311,991)

1,772(41,893)
129,671

1,515
43,038
86,10014,746(348,614)
1,079,063—¥ 87,778

533¥ 129,671—$ 730,449

Financial Section

Effect of exchange rate changes on cash and cash equivalents
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Increase in cash and cash equivalents resulting
from inclusion of subsidiaries in consolidation
Cash and cash equivalents at end of the year

40,392
—
55
(35)
—
(40)
32
92
5
(8,559)(27,926)(889)

Environmental Activities Supporting “NTN 100”

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 tominority shareholders of consolidated subsidiaries
Cash dividends paid
Repayment of lease obligations
Other
Net cash (used in) provided by financing activities$ 308,421¥

CSR Activities Supporting “NTN 100”

Cash flows from investing activities:
Increase in short-term investments
Purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Proceeds from upfront portion for sales of property, plant and equipment
Purchases of other assets
Purchases of investment in subsidiaries
Other
Net cash used in investing activities(2,451)¥ 37,063“NTN 100” Strategy

Cash flows from operating activities:
Income (loss) before income taxes and minority interests
Adjustments for:
Depreciation and amortization
Loss on impairment of fixed assets (Note 6)
Amortization of goodwill
Decrease in provision for surcharge payments under the Anti-Monopoly Act
Decrease in provision for employees’ early retirement incentive plans(Decrease) increase in provision for loss on support to a related company
Increase (decrease) in allowance for doubtful accounts
Increase in allowance for directors’ and corporate auditors’ bonuses
Increase (decrease) in provision for product defect compensation(Decrease) increase in liability for retirement benefits(Decrease) increase in account payable for Anti-Monopoly Act(Decrease) increase in account payable for reorganization expenses
Decrease in other current and long-term liabilities resulting
from amendment of pension plans
Surcharge payment under Anti-Monopoly Act
Severance payments under early retirement incentive plans
Interest and dividend income
Interest expense
Translation adjustments and foreign exchange loss (gain), net
Equity in earnings of affiliates
Gain on sales of fixed assets, net
Gain on contribution of securities to employees’ retirement benefit trustContribution to employees’ retirement benefit trust
Increase in trade receivables(Increase) decrease in inventories
Increase in trade payables
Other
SubtotalInterest and dividend income received
Interest paid
Payment for loss of Anti-Monopoly Act
Severance payments under early retirement incentive plans
Payment for contribution to employees’ retirement benefit trust
Income taxes paid
Net cash provided by operating activities

2015

NTN’s Vision

March 31, 2015

See accompanying notes to the consolidated financial statements.

78

Notes to Consolidated Financial Statements
March 31, 2015

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 application anddisclosure requirements of International Financial Reporting Standards,
and are compiled from the consolidated financial statements preparedby the Company as required by the Financial Instruments andExchange 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.
Certain amounts in the prior year’s financial statements have been
reclassified to conform to the current year’s presentation. Such
reclassification had no effect on consolidated net income or net
assets.
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 ¥120.17 = U.S.$1.00, the exchange rate prevailing on March
31, 2015. This translation should not be construed as a representationthat yen can be converted into U.S. dollars at the above or any otherrate.

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 inconsolidation on the basis of a full fiscal year closing on March 31 forconsolidation 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 the actual
historical percentage of bad debts and an estimate of uncollectible
amounts determined after an analysis of specific individual receivables.

79(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
or other securities. Trading securities are carried at fair value and heldto-maturity debt securities are carried at amortized cost. Marketablesecurities classified as other securities are carried at fair value with any
changes in unrealized holding gain or loss, net of the applicable
income taxes, included directly in net assets. Cost of securities sold isdetermined by the moving average method. Non-marketablesecurities classified as other securities are carried at cost 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 the respective
assets by the declining-balance method, except for the buildings andassets of foreign consolidated subsidiaries to which the straight-line
method is principally applied.
The principal estimated useful lives are as follows:
Buildings and structures
10 to 50 years
Machinery, equipment and vehicles	  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, plantand equipment accounts on the consolidated balance sheets at
March 31, 2015 and 2014 were reduced by the following amounts:

Land
Buildings and structures
Machinery, equipment andvehiclesMillions of yen
2015
2014

¥  799478¥  799529

332¥1,609420¥1,748

Thousands of
U.S. dollars
2015$ 6,649
3,978
2,762$13,389(h) Provision for loss on support to a related company
Provision for loss on support to a related company is provided for the
possible loss on support provided to a related company due to thesubsidiary’s financial condition and other factors.
(i) Provision for surcharge payments under the Anti-Monopoly Act
Provision for surcharge payments under the Anti-Monopoly Act isprovided for the expected corresponding payments.
(j) Liability for retirement benefits
Liability for retirement benefits has been provided principally at an
amount calculated based on the retirement benefit obligation after thefair value of the pension plan assets are deducted. The estimatedbenefit is attributed to each period by the benefit formula method overthe estimated years of service of the eligible employees.
Past service cost is amortized as incurred primarily by the straightline method over a period of principally 15 years, which is within theestimated average remaining years of service of the eligible employees.
Net unrecognized actuarial gain or loss is amortized commencing
in the year 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 of serviceof the eligible employees.
(k) Provision for product defect compensation
Provision for product defect compensation is provided at an estimatedamount in order to cover the anticipated compensation.

NTN’s Vision(l) Leases
For lease transactions involving the transfer of ownership, the leased
assets are depreciated by the same methods used for owned fixed
assets.
For lease transactions not involving the transfer of ownership,leased assets are depreciated over the lease period using the straightline method with a nil residual value.
The Company continues to account for finance lease transactions
not involving the transfer of ownership that commenced prior to April
1, 2008 as operating leases.

(n) 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 5-year period.

(q) 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.
(r) Consolidated taxation system
The Company and certain domestic consolidated subsidiaries
adopted the consolidated taxation system, which allows companies
to file tax returns based on the combined profits or losses of theparent company and its wholly owned domestic subsidiaries.

4. Standards Issued but Not Yet Effective

Accounting Standards for Business Combinations
On September 13, 2013, the ASBJ issued “Revised AccountingStandard for Business Combinations” (ASBJ Statement No.21),“Revised Accounting Standard for Consolidated Financial Statements”(ASBJ Statement No.22), “Revised Accounting Standard for Business
Divestitures” (ASBJ Statement No.7), “Revised Accounting Standard
for Earnings Per Share” (ASBJ Statement No.2), “Revised Guidanceon Accounting Standard for Business Combinations and AccountingStandard for Business Divestitures” (ASBJ Guidance No.10) and“Revised Guidance on Accounting Standard for Earnings Per Share”(ASBJ Guidance No.4).
Under these revised accounting standards, the accounting
treatment for any changes in a parent’s ownership interest in a
subsidiary when the parent retains control over the subsidiary and thecorresponding accounting for acquisition-related costs were revised.
In addition, the presentation method of net income was amended, thereference to “minority interests” was changed to “non-controllinginterests,” and accounting treatment for adjustments to provisionalamounts was also changed.
The Company expects to adopt these revised accounting
standards and guidance from the beginning of the fiscal year ending
March 31, 2016. In addition, the determination of provisional
accounting treatments will be adopted for business combinations
conducted on or after the beginning of the fiscal year ending March
31, 2016.
At present, the Company believes these revised standards will
have no effect on its consolidated financial statements.

Inventories at March 31, 2015 and 2014 consisted of the following:

Finished goods
Work in process
Raw materials and supplies

Millions of yen
2015
2014

¥103,307
46,51234,309¥184,128¥ 90,541
45,09730,846¥166,484

Thousands of
U.S. dollars
2015$  859,673
387,052
285,504$1,532,229

Financial Section

5. Inventories

Environmental Activities Supporting “NTN 100”(p) Derivative financial instruments and hedging activities
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. Interest-rate swaps which meet certain conditions areaccounted for as if the interest rates applied to the interest-rate swaps
had originally applied to the underlying debt.
Interest-rate and cross currency swaps which meet certain
conditions are accounted for as if the interest rates and currencies
applied to the interest-rate and cross currency swaps had originallyapplied to the underlying debt.

CSR Activities Supporting “NTN 100”(o) Deferred income taxes
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.

Accounting Standards for Retirement Benefits
The Company and its domestic subsidiaries adopted Section 35 of“Accounting Standard for Retirement Benefits” (Accounting Standards
Board of Japan (“ASBJ”) Statement No. 26 of May 17, 2012) and themain clause of Section 67 of “Guidance on Accounting Standard for
Retirement Benefits” (ASBJ Guidance No. 25 of March 26, 2015)
effective from April 1, 2014. As a result, the methods for calculating
the retirement benefit obligation and service cost have been revised in
the following respects: the method for attributing projected benefits toeach period has been changed from the straight-line method to thebenefit formula method, and the method for determining the discountrate has been changed to use a single weighted-average discountrate reflecting the expected timing and amount of benefit payments.
The cumulative effect of changing the method for calculating theretirement benefit obligation and service cost was recognized byadjusting retained earnings at the beginning of the fiscal year ended
March 31, 2015, in accordance with the transitional treatment
provided in Paragraph 37 of Accounting Standard for Retirement
Benefits.
As a result, the liability for retirement benefits and deferred income
taxes decreased ¥3,557 million ($29,600 thousand) and ¥1,245
million ($10,360 thousand), respectively, and retained earnings
increased ¥2,312 million ($19,240 thousand) at the beginning of the
fiscal year ended March 31, 2015. The effects of this change on
operating income, ordinary income, and income before income taxes
and equity in earnings of affiliated companies are insignificant. In
addition, the effects on net assets per share and net income per share
as of and for the year ended March 31, 2015 are also insignificant.

“NTN 100” Strategy(m) Goodwill
Goodwill is being amortized on the straight-line method over theestimated period of the economic benefits.

3. Accounting Changes

806. 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 theCompany and its consolidated subsidiaries do not expect any future use for them and do not expect them to be recoverable. Consequently, theCompany and its consolidated subsidiaries recorded related losses on impairment of fixed assets of ¥2,013 million in the accompanying
consolidated statement of operations for the year ended March 31, 2014:
Location

Usage

Machinery and equipment
Construction in progress
Buildings and structures
Land
Other
Machinery and equipment
Construction in progress
Other

Production equipment
Japan

Americas

Millions of yen
2014Classification

Employee recreational facilities

Production equipment¥  167
453
52
15
0
1,040
185
101
¥2,013

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.
The Company recorded reorganization expenses of ¥1,421 million, which included loss on impairment of fixed assets in the amount of ¥184
million for the year ended March 31, 2014. The aggregate amount of ¥2,197 million of loss on impairment of fixed assets included ¥2,013 million
as shown in the above table and the ¥184 million, which was included in the reorganization expenses mentioned above, was presented as acomponent of cash flows from operating activities in the consolidated statement of cash flows for the year ended March 31, 2014.

7. Securities(a) Information regarding marketable securities classified as other securities at March 31, 2015 and 2014 is summarized as follows:

Securities whose carrying value
exceeds their acquisition costs:
Equity securities
Securities whose carrying value does
not exceed their acquisition costs:
Equity securities
Other
Subtotal
Total

Securities whose carrying value
exceeds their acquisition costs:
Equity securities
Securities whose carrying value does
not exceed their acquisition costs:
Equity securities
Other
Subtotal
Total

Millions of yen

Carrying
value

2015
Acquisition
costs

Unrealized
gain (loss)

Carrying
value

2014
Acquisition
costs

Unrealized
gain (loss)¥37,244¥16,170¥21,074¥26,129¥13,673¥12,456595
10,00010,595¥47,839627
10,00010,627¥26,797

(32)
—
(32)
¥21,042

2,779
35,00037,779¥63,908

3,124
35,00038,124¥51,797

(345)
—
(345)
¥12,111

Carrying
value

Thousands of U.S. dollars
2015
Acquisition
costs

Unrealized
gain (loss)$309,927$134,559$175,368

4,952
83,21588,167$398,094

5,218
83,21588,433$222,992

(266)
—
(266)
$175,102(b) Sales and aggregate gain on investment securities are summarized as follows:
The Company contributed certain available-for-sale securities with a fair value of ¥1,864 million to the employee retirement benefit trust for theCompany’s contributory pension plan, and recognized a gain of ¥1,272 million for the year ended March 31, 2014. There were no sales ofinvestment securities for the year ended March 31, 2015.

81

NTN’s Vision

8. Short-Term Bank Loans, Long-Term Debt and Lease Obligations

Short-term bank loans principally represent short-term notes with average annual interest rates of 0.65% and 0.78% at March 31, 2015 and2014, respectively.
Long-term debt and lease obligations at March 31, 2015 and 2014 consisted of the following:Thousands of
U.S. dollars

Millions of yen

Less current portion

2015

2014

2015

¥284,009
1,280
285,289(45,833)¥239,456¥281,011
1,418
282,429(29,237)¥253,192$2,363,394
10,651
2,374,045(381,401)$1,992,644

The aggregate annual maturities of long-term debt and lease obligations subsequent to March 31, 2015 are summarized as follows:
Millions of yen

Year ending March 31,¥ 45,833
71,597
72,67545,52015,35734,307¥285,289

Thousands of
U.S. dollars$  381,401
595,798
604,768
378,797
127,794
285,487$2,374,045

9. Retirement Benefits

1. Outline of retirement benefits for employees
The Company and certain domestic consolidated subsidiaries have defined benefit pension plans (i.e., corporate pension fund plans and lumpsum 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 plans. Certain overseas consolidated subsidiaries also have defined benefit pension plans
and/or defined contribution pension plans. The Company has also established a employees’ retirement benefit trust.

Thousands of
U.S. dollars

Millions of yen

Retirement benefit obligation at the beginning of the year
Cumulative effect of change in accounting principle
Restated balance at the beginning of the year
Service cost
Interest cost
Actuarial gain and loss
Benefits paid
Other
Retirement benefit obligation at the end of the year

2015

¥106,253(3,557)
102,696
2,995
1,993
6,437
(7,038)2,581¥109,664

2014¥110,526—
110,526
3,311
2,282
(658)
(13,204)
3,996¥106,253*Certain domestic consolidated subsidiaries calculate the liability for retirement benefits based on the simplified method.

2015$884,189(29,600)
854,589
24,923
16,58553,566(58,567)
21,478$912,574

Environmental Activities Supporting “NTN 100”

2. Defined benefit pension plans(1) The changes in the retirement benefit obligation for the years ended March 31, 2015 and 2014 are as follows:

CSR Activities Supporting “NTN 100”

2016
2017
2018
2019
2020
2021 and thereafter“NTN 100” Strategy

Loans from banks and other financial institutions, due through 2025, at an averageannual interest rate of 1.5%
Lease obligations due through 2026

(2) The changes in plan assets for the years ended March 31, 2015 and 2014 are as follows:
Thousands of
U.S. dollars

Millions of yen
2015¥52,004
1,945
4,525
7,328
(3,964)
2,749¥64,5872014¥ 56,541
1,769
3,096
4,111
(16,221)2,709¥ 52,005

2015$432,754
16,18537,65560,980(32,987)
22,877$537,464

Financial Section

Plan assets at fair value at the beginning of the year
Expected return on plan assets
Actuarial gainContributions by the employers
Benefits paid
Other
Plan assets at fair value at the end of the year82

(3) T he balance of retirement benefit obligation and plan assets at fair value, liabilities and assets recognized in consolidated balance sheets asof March 31, 2015 and 2014 are as follows:
Thousands of
U.S. dollars

Millions of yen
2015

2014

2015

Unfunded retirement benefit obligation
Net amount of liabilities and assets recognized in the consolidated balance sheet¥102,203(64,587)
37,616
7,461
45,077¥ 98,539(52,005)
46,534
7,714
54,248$ 850,487(537,464)
313,02362,087375,110

Liability for retirement benefits
Net amount of liabilities and assets recognized in the consolidated balance sheet

45,077¥ 45,077

54,248¥ 54,248

375,110$ 375,110

Funded retirement benefit obligation
Plan assets at fair value(4) The components of retirement benefit expenses for the years ended March 31, 2015 and 2014 are as follows:
Thousands of
U.S. dollars

Millions of yen

Service cost
Interest cost
Expected return on plan assets
Amortization:
Actuarial loss
Past service cost
Retirement benefit expenses

2014

2015

2015

¥ 2,995
1,993(1,945)¥ 3,3112,282(1,769)$ 24,923
16,585(16,185)

2,210
(195)
¥ 5,058

2,566
(184)
¥ 6,206

18,391(1,624)$ 42,090(5) The components of retirement benefit liability adjustments included in other comprehensive income (before tax effect) for the years ended
March 31, 2015 and 2014 are as follows:
Thousands of
U.S. dollars

Millions of yen

Actuarial loss
Past service cost
Total

2014

2015

¥2,0688¥2,076

¥ 298
(203)
¥ 95

2015

$ 2,480(1,689)$   791(6) The components of retirement benefit liability adjustments included in accumulated other comprehensive income (before tax effect) as ofMarch 31, 2015 and 2014 are as follows:
Thousands of
U.S. dollars

Millions of yen

Unrecognized actuarial gain
Unrecognized past service cost
Total

2015

¥(16,785)(148)¥(16,933)

2014¥(17,084)
55¥(17,029)

2015$(139,677)(1,232)$(140,909)(7) The fair value of plan assets, by major category, as a percentage of total plan assets as of March 31, 2015 and 2014 are as follows:
2015

Equities
Bonds
General accounts at life insurance companies
Other
Total

49.5%
20.7
16.2
13.6
100.0%

2014

51.3%
24.4
18.7
5.6
100.0%The expected long-term rate of return on plan assets is determined as a result of consideration of both the portfolio allocation at present andanticipated in the future, and long-term expected rate of return from multiple plan assets.
(8) The assumptions used in accounting for the defined benefit plans are as follows:
Discount rate
Expected long-term rate of return on plan assets

83

2015

Principally 1.2%
Principally 2.5%

2014

Principally 1.5%
Principally 2.5%

NTN’s Vision

3. Defined contribution pension plans
Thousands of
U.S. dollars

Millions of yen

2015

2014

2015

Contributions to defined contribution pension plans$12,016¥1,290¥1,444

10. Shareholders’ Equity(b) Movements in shares issued and treasury stock during the years ended March 31, 2015 and 2014 are summarized as follows:

Shares issued: Common stock
Treasury stock: Common stock

April 1, 2013

Increase

532,463,527
619,746

Shares issued: Common stock
Treasury stock: Common stock—
51,285

532,463,527
576,6432014—
44,948—933

Decrease—
1,845

March 31, 2015

532,463,527
670,098
March 31, 2014

532,463,527
619,746

The increases in treasury stock were due to purchases of shares of less than one voting unit and the decreases in treasury stock were due tosales of shares at requests of shareholders owning less than one voting unit for the years ended March 31, 2015 and 2014.

11. Contingent Liabilities

12. 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 theCompany and its consolidated subsidiaries at March 31, 2015 and 2014, which would have been reflected in the accompanying consolidatedbalance 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:

Buildings and structures
Machinery, equipment and vehicles
Other assets

Acquisition
costs

Net bookvalue

Acquisition
costs

Thousands of U.S. dollars
2015
Accumulated
depreciation

Net book
value¥1,412——¥1,412$11,750——$11,750¥1,252——¥1,252$10,419——$10,419

¥160
—
—
¥160

$1,331——$1,331

Acquisition
costs¥1,4124
12¥1,4282014
Accumulated
depreciation¥1,195
4
11¥1,210Net book
value

¥217
0
1
¥218
Financial Section

Buildings and structures
Machinery, equipment and vehicles
Other assets

Millions of yen

2015
Accumulated
depreciation

Environmental Activities Supporting “NTN 100”

Arbitration for claim of damages
NTN-SNR ROULEMENTS (hereinafter referred as NTN-SNR), a consolidated subsidiary, has been involved in arbitration proceedings sinceNovember 2012. One automotive customer submitted a claim to arbitration and requested the payment in the amount of $57,774 thousand(¥6,943 million) for damages due to allegedly defective products provided by NTN-SNR.
With subsequent arbitration proceedings, the claim for damages has increased to $77,282 thousand (¥9,287 million) related to theseproducts. NTN-SNR continues to present counterarguments against this claim appropriately.
Depending on the results of the arbitration, the results of operations of the Company and its consolidated subsidiaries could be affected.
However, it is currently difficult to make reasonable estimates of the future possible effects on the results of operations and financial position of
the Company and its consolidated subsidiaries.

CSR Activities Supporting “NTN 100”

April 1, 2014

Number of shares
2015
Increase
Decrease“NTN 100” Strategy(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 canbe made 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
in retained earnings amounted to ¥8,639 million ($71,890 thousand) at March 31, 2015 and 2014.

84

Lease payments relating to finance leases accounted for as operating leases in the accompanying consolidated financial statements amounted
to ¥58 million ($483 thousand) and ¥59 million for the years ended March 31, 2015 and 2014, respectively. Depreciation of the leased assets
computed by the straight-line method over the respective lease terms with a nil residual value amounted to ¥58 million ($483 thousand) and ¥59
million for the years ended March 31, 2015 and 2014, respectively.
Future minimum lease payments subsequent to March 31, 2015 for finance leases accounted for as operating leases are summarized asfollows:
Years ending March 31,

20162017 and thereafter
Total

Millions of yen

¥ 56
104
¥160

Thousands of
U.S. dollars$  466865$1,331

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, 2015 and 2014.

13. Operating Leases

Future minimum lease payments subsequent to March 31, 2015 for non-cancelable operating leases were as follows:
Years ending March 31,

20162017 and thereafterTotal

14. Financial Instruments – Fair Value

Overview(a) Policy for financial instruments
The Company and its subsidiaries (collectively, the “Group”) raisenecessary funds in accordance with management plans mainly bybank borrowings in support of operations related to the manufactureand sales of bearings, constant-velocity joints (CVJs) and precisionequipments. The Group utilizes bank borrowings for short-term
operating funds, and bank borrowings for long-term capital
investments and finances. Temporary surplus funds are managed by
low-risk financial assets. The Group utilizes derivatives to avoid or
mitigate risks as described in the later part of this note and does nothold them for speculative purposes.
(b) Types of financial instruments and related risks
Trade receivables, notes, accounts receivable and electronicallyrecorded monetary claims, are exposed to credit risk of customers. In
addition, as a result of the business of the Group, which operates
globally, foreign currency trade receivables are exposed to currency
rate fluctuation risk, which is mitigated by utilizing forward foreign
currency exchange contracts. Securities are mainly composed ofstocks of the companies with which the Group has business
relationships and they are exposed to fluctuation risk of market prices.
Trade payables, notes, accounts payable and electronicallyrecorded obligations, are due within one year. Certain trade payables
resulting from the import of raw materials are denominated in foreign
currencies. These are exposed to fluctuation risk of foreign currencies.
However, the risk is mitigated because the trade payables, notes andaccounts payable denominated in foreign currencies are within therange of accounts receivable denominated in the same currencies.
Loans are mainly utilized for business operations of the Group.
Short-term loans are mainly utilized for financing of operating activities.
Long-term loans are mainly utilized for capital investments andfinancing. These have maturity dates of 10 years or less, at thelongest, subsequent to March 31, 2015. Certain loans are exposed tofluctuation risk of interest rates and fluctuation risk of exchange rates
and this risk is hedged by derivative transactions of interest rate swap
agreements and cross currency swap agreements.
The Group has a policy to utilize derivative transactions involving
forward foreign currency exchange contracts, currency option
agreements, currency swap agreements, interest rate swap
agreements and interest rate option agreements for the purpose of85

Millions of yen¥  905
3,919¥4,824

Thousands of
U.S. dollars$ 7,531
32,612$40,143

avoiding future fluctuation risk of foreign currencies trade receivables
and payables and mitigating future fluctuation risk of interest rate ofloans and corporate bonds. The Group utilized forward foreign
currency exchange contracts, interest rate swap agreements andcross currency swap agreements for the year ended March 31, 2015.
Refer to “(p) Derivative financial instruments and hedging activities” inNote 2. “Summary of Significant Accounting Policies.”(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 highcredit 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 each currency.
Depending on the market conditions of foreign currencies, the Grouputilizes forward foreign currency exchange contracts for forecasted
export transactions with a maximum period of 6 months.
The Group utilizes interest rate swap agreements and crosscurrency swap agreements to mitigate fluctuation risk of interest rates
and fluctuation risk of loans principal due to floating exchange 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) and by
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 with

NTN’s Vision

management policies and its consolidated subsidiaries apply thesame approach. Each derivative transaction of the Company isreported to the responsible director when entered into. The
consolidated subsidiaries are required to report the status of theirderivatives transactions to the Company on a monthly basis and arealso required to consult with the Company when they enter into
derivative transactions other than forward foreign currency exchange
contracts.

(d) 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 15 “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, 2015 and 2014, 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).

Carrying
value

2014
Fair value

¥ —
—
—

¥129,671
1,076
135,262¥129,671
1,076
135,262

1,786
37,844—5

96
28,90896
28,91317¥273,284
75,09745,561
61,091
57,778
7,919
239,362¥486,808
¥
(489)

—
¥  5
—
—
—
—
—
914
¥914
¥ —

29
¥295,042
100,756
28,992
106,410—3,424
252,019¥491,601¥(30)

29¥295,047
100,756
28,992
106,410—3,424
251,787¥491,369¥(30)¥ 87,778
1,321
144,538¥ 87,778
1,321
144,538

1,786
37,83917¥273,279
75,09745,561
61,091
57,778
7,919
238,448¥485,894¥(489)

Carrying
value

Difference

Thousands of U.S. dollars
2015
Fair value

Difference$  730,449
10,993
1,202,780

$

—
—
—

14,862
314,879

14,862
314,921—42

140$2,274,103
624,923
379,138
508,371
480,803
65,8981,984,256$4,043,389$(4,069)140$2,274,145
624,923
379,138
508,371
480,803
65,898
1,991,861$4,050,994$(4,069)—$   42
—
—
—
—
—
7,605
$7,605
$
—

¥ —
—
—
—
5
—
5
—
—
—
—
—
(232)
¥(232)¥ —¥Financial Section$  730,449
10,993
1,202,780

Difference

Environmental Activities Supporting “NTN 100”

( 1 ) Cash and cash equivalents( 2 ) Short-term investments( 3 ) Trade receivables( 4 ) Electronically recorded monetaryclaim( 5 ) Investment securities( 6 ) Short-term loans receivable
included in other current assets
Total assets( 7 ) Short-term bank loans( 8 ) Current portion of long-term debt
( 9 ) Trade payables(10) Electronically recorded obligations(11) Accrued income taxes(12) Long-term debt
Total liabilities
Derivative transactions (*)

Fair value

CSR Activities Supporting “NTN 100”

( 1 ) Cash and cash equivalents( 2 ) Short-term investments( 3 ) Trade receivables( 4 ) Electronically recorded monetaryclaim( 5 ) Investment securities( 6 ) Short-term loans receivable
included in other current assets
Total assets( 7 ) Short-term bank loans( 8 ) Current portion of long-term debt
( 9 ) Trade payables(10) Electronically recorded obligations(11) Accrued income taxes(12) Long-term debt
Total liabilities
Derivative transactions (*)

Carrying
value

Millions of yen

2015“NTN 100” Strategy(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.

*Assets and liabilities arising from derivative transactions are shown at net value with the amount in parentheses representing net liability position.

86

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, (4) Electronically recorded monetary claim and (6)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.
(5) Investment securities
The fair value of equity securities is based on quoted market prices.
(7) Short-term bank loans, (9) Trade payables (10) Electronically recorded obligations and (11) 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 (12) Long-term debt
The fair value of long-term debt is based 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.
Certain long-term loans with floating interest rates have been hedged by interest rate swap agreements and interest-rate and crosscurrency swap agreements. These have been accounted for as loans with fixed interest rates. The fair value of those long-term loans isbased on the present value of the total of the principals, interest payments and net cash flows of the swap agreements discounted by
the interest rates to be applied assuming new loans under similar conditions are made.
Derivative Transactions
Please refer to Note 15 “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 are as follows:
Thousands of
U.S. dollars

Millions of yen

Unlisted stocks
Stocks of subsidiaries and affiliates
Other
Unlisted foreign bonds
Unlisted domestic bonds
Total

2015

2014

2015

¥16,734
291
1,121
1,000
¥19,146¥15,540
287
1,218
1,000
¥18,045$139,253
2,421
9,328
8,322
$159,324

Because no quoted market price is available and it is extremely difficult to determine the fair value, the above financial instruments are notincluded in the preceding table.
Note 3:	Redemption schedules for cash and cash equivalents, receivables and marketable securities with maturities at March 31, 2015 and2014 are as follows:

Cash and cash equivalents
Short-term investments
Trade receivables
Electronically recorded monetary claim
Short-term loans receivable included in other current assets
Total

Cash and cash equivalents
Short-term investments
Trade receivables
Electronically recorded monetary claim
Short-term loans receivable included in other current assets
Total

87

Withinone year

Millions of yen
2015
More than one year More than five years
and within five years and within ten years

More thanten years

Withinone year

Millions of yen
2014
More than one year More than five years
and within five years and within ten years

More thanten years¥ 87,778
1,321
144,538
1,786
17¥235,440¥129,671
2,076
135,2629629¥267,134

¥—
—
—
—
—
¥—

¥—
—
—
—
—
¥—

¥—
—
—
—
—
¥—

¥—
—
—
—
—
¥—

¥—
—
—
—
—
¥—

¥—
—
—
—
—
¥—

NTN’s Vision

Withinone year$  730,449
10,993
1,202,780
14,862140$1,959,224

Cash and cash equivalents
Short-term investments
Trade receivables
Electronically recorded monetary claim
Short-term loans receivable included in other current assets
Total

Thousands of U.S. dollars
2015
More than one year More than five years
and within five years and within ten years

$—
—
—
—
—
$—

$—
—
—
—
—
$—

More thanten years

$—
—
—
—
—
$—

15. 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, 2015 and 2014is summarized as follows:“NTN 100” Strategy

Note 4:	The redemption schedule for long-term debt is disclosed in Note 8 “Short-Term Bank Loans, Long-Term Debt and Lease Obligations”
section of these Notes to Consolidated Financial Statements.

Currency-related transactions

Over-the-counter transactions

Transaction

Forward foreign currency exchange contracts
Selling:
U.S. Dollars
Thai Baht
British Pounds
Buying:Euro
Total

Over-the-counter transactions

Transaction

Forward foreign currency exchange contracts
Selling:
Euro
U.S. Dollars
Thai Baht
Canadian Dollars
British Pounds
Buying:U.S. Dollars
Euro
Total

Classification

Buying:Euro
Total¥12,370392
92¥(441)(13)3¥(441)
(13)
3

6,131
¥18,985(38)¥(489)(38)¥(489)

Notional amountMillions of yen
2014
Fair value

Valuation gain (loss)¥ 6,402
4,464
466
74
120

¥(38)
5
1
0
0

¥(38)
5
1
0
0

16
281
¥11,823

0
2
¥(30)

0
2
¥(30)

Thousands of U.S. dollars
2015
Notional amount
Fair value
Valuation gain (loss)$102,938
3,262
766$(3,670)(108)
25$(3,670)(108)
25

51,019$157,985(316)$(4,069)(316)$(4,069)

Financial Section

Over-the-counter transactions

Transaction

Forward foreign currency exchange contracts
Selling:
U.S. Dollars
Thai Baht
British Pounds

Valuation gain (loss)

Environmental Activities Supporting “NTN 100”

Classification

Notional amount

CSR Activities Supporting “NTN 100”

Classification

Millions of yen
2015
Fair value

The fair value of forward foreign currency exchange contracts are computed using prices provided by counterparty financial institutions. There
are no contracts to be settled after one year.

88(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, 2015 and 2014 issummarized as follows.

Method of hedge accounting

Swap rates applied to underlying
long-term debt
Swap rates and currency applied tounderlying long-term debt

Method of hedge accounting

Swap rates applied to underlying
long-term debt
Swap rates and currency applied tounderlying long-term debt

Method of hedge accounting

Swap rates applied to underlying
long-term debt
Swap rates and currency applied tounderlying long-term debt

Transaction

Interest rate swaps
Receive / floating and pay / fixedInterest-rate and cross currency swaps
Receive / floating US$ and pay / fixed yen

Transaction

Interest rate swaps
Receive / floating and pay / fixedInterest-rate and cross currency swaps
Receive / floating US$ and pay / fixed yen

Transaction

Interest rate swaps
Receive / floating and pay / fixedInterest-rate and cross currency swaps
Receive / floating US$ and pay / fixed yen

Millions of yen
2015
Contractual value
Notional amountMore than one year

Fair value¥27,000¥17,000(*)¥ 1,500¥ 1,500(*)

Millions of yen
2014
Contractual value
Notional amountMore than one year

Fair value¥27,000¥27,000(*)¥ 1,500¥ 1,500(*)

Thousands of U.S. dollars
2015
Contractual value
Notional amountMore than one year

Fair value$224,682$141,466(*)$ 12,482$ 12,482(*)*Because interest rate swap agreements and cross currency swap agreements are accounted for applying swap rates to underlying long-term debt, their fair value
is included in that of long-term debt disclosed in Note 14 “Financial Instruments – Fair Value.”

16. Research and Development Costs

Research and development costs included in cost of sales and selling, general and administrative expenses totaled ¥18,088 million ($150,520
thousand) and ¥17,821 million for the years ended March 31, 2015 and 2014, respectively.

17. Gain on Sales of Fixed Assets

Gain on sales of fixed assets for the year ended March 31, 2015 consisted of the following:
Millions of yen

Gain on sales of a part of land at former TAKARAZUKA Works
Others2015¥3,982305¥4,287

Thousands of
U.S. dollars
2015$33,136
2,538$35,674

18. Loss on Surcharge Payments under Anti-Monopoly Act

In August 2014, the National Development and Reform Commission of China made a decision to impose on the Company a monetary penaltyof RMB119,160 thousand on charges of violating the Anti-Monopoly Act of China in connection with the sales of bearings in China. The
Company recorded ¥2,094 million ($17,425 thousand) as a loss on surcharge payments under the Anti-Monopoly Act for the year ended March
31, 2015.
The Company and certain consolidated subsidiaries in Europe received a notice from European Commission regarding the imposition ofsurcharges due to violations of EU Competition Law related to the automotive bearings business in Europe. Based on the notice from theEuropean Commission, loss on surcharge payments under the Anti-Monopoly Act in the amount of €201,354 thousand or ¥27,024 million, at
the average exchange rate for the year ended March 31, 2014, was recorded for the year ended March 31, 2014. This decision was madethrough the settlement process with the European Commission based on relevant laws.

19. Provision for Loss on Support to a Related Company

The Company’s related company in the Americas received a payment notice in connection with claims involving inappropriate import proceduresin prior years. As a result, the liabilities of this related company were in excess of assets. Provision for loss on support to a related company inthe amount of ¥1,600 million was recorded for the year ended March 31, 2014.

89

NTN’s Vision

20. Reorganization Expenses

Reorganization expenses for the year ended March 31, 2014 consisted of the following:
Millions of yen
2014

Restructuring in the production system in its consolidated subsidiaries¥1,421*Loss on impairment of fixed assets in the amount of ¥184 million for the year ended March 31, 2014 was included above.

21. Restructuring Costs

Millions of yen
2014

Expense for employees’ early retirement incentive plans¥301“NTN 100” Strategy

Restructuring costs for the year ended March 31, 2014 consisted of the following:

22. Provision for Surcharge Payments under Anti-Monopoly Act

The Company and its consolidated subsidiary in Singapore have been under investigation by the Competition Commission of Singapore oversuspicions of violations of Singaporean Competition Law in connection with the bearings business involving Singaporean customers. With theprogress of the investigations, the Company estimated the amount of loss expected in the future, and recorded a provision for surcharge
payments under the Anti-Monopoly Act in the amount ¥35 million for the year ended March 31, 2014.

The following table presents the analysis of other comprehensive income (loss) for the years ended March 31, 2015 and 2014.
Thousands of
U.S. dollars

Millions of yen

2015

2015

2014

¥ 8,838—
8,838(2,349)6,489¥ 5,676(1,272)
4,404(1,541)
2,863$ 73,546—
73,546(19,547)
53,99917,513—
17,513—
17,513

15,378—15,378—15,378145,735—
145,735—
145,735(2,223)
1,888
(335)
51
(284)

2,296
718
3,014
(1,193)
1,821(18,499)
15,711(2,788)425(2,363)

1,023¥24,741

1,980¥22,0428,513$205,884

Environmental Activities Supporting “NTN 100”

Net unrealized holding gain on securities:
Amount arising during the year
Reclassification adjustments for gains included in net income (loss)
Before tax effectTax effect
Total
Translation adjustments:
Amount arising during the year
Reclassification adjustments for losses included in net income (loss)
Before tax effectTax effect
Total
Retirement benefit liability adjustments:
Amount arising during the year
Reclassification adjustments for losses included in net income (loss)
Before tax effectTax effect
Total
Share of other comprehensive income of affiliates accounted for by the equity method:Amount arising during the year
Other comprehensive income, net

CSR Activities Supporting “NTN 100”

23. Other Comprehensive Income (Loss)

24. Income Taxes

Financial Section

Income taxes applicable to the Company and its domestic subsidiaries comprise corporate tax, inhabitants’ taxes and enterprise tax which, inthe aggregate, resulted in statutory tax rates of 35.0% and 37.4% for the years ended March 31, 2015 and 2014. Overseas subsidiaries are
subject to the income taxes of the respective countries in which they operate.
The details of the differences between the statutory tax rate and effective tax rates for the year ended March 31, 2015 is omitted because
the difference was less than 5% of the statutory tax rate. In addition, the details of the differences between the statutory tax rate and effective
tax rates for the year ended March 31, 2014 is omitted because the Company and its consolidated subsidiaries recorded a loss before income
taxes and minority interests for the year.

90

The tax effects of temporary differences which gave rise to significant portions of the deferred tax assets and liabilities at March 31, 2015 and2014 are presented below:
Thousands of
U.S. dollars

Millions of yen

Deferred tax assets:
Liability for retirement benefits
Inventories
Tax loss carryforwards
Accrued expenses
Other
Gross deferred tax assets
Less: valuation allowance
Total deferred tax assets

2015

2014

2015

¥ 18,670
3,322
14,036
3,177
5,361
44,566(1,390)43,176¥ 20,147
1,787
14,5673,044
8,688
48,233(5,011)
43,222$ 155,363
27,644
116,801
26,43844,612
370,858(11,567)
359,291

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(15,768)(6,697)(1,243)(134)(1,463)(25,305)¥ 17,871(14,558)(4,347)(550)(138)(2,178)(21,771)¥ 21,451(131,214)(55,729)(10,344)(1,115)(12,174)(210,576)$ 148,715

The “Act for Partial Amendment of the Income Tax Act” (Act No.9, 2015) and “Act for Partial Amendment of Local Tax Act” (Act No.2, 2015) were
promulgated on March 31, 2015.
In line with these revisions, the Company changed the statutory tax rate to calculate deferred tax assets and liabilities from 35.0% to 32.4%
and 31.5% for the temporary differences expected to be realized or settled in the year beginning April 1, 2015 and for the temporary differences
expected to be realized or settled from April 1, 2016, respectively.
As a result of these changes, net deferred tax assets (after offsetting deferred tax liabilities) decreased by ¥982 million ($8,172 thousand),income taxes-deferred increased by ¥1,529 million ($12,724 thousand), and net unrealized holding gain on securities increased by ¥744 million($6,191 thousand), while retirement benefit liability adjustments decreased by ¥197 million ($1,639 thousand) as of and for the year ended March
31, 2015.

25. Amounts per Share

Amounts per share at March 31, 2015 and 2014 and for the years then ended were as follows:

Net assets
Net income (loss):
Basic
Cash dividends

Yen¥461.212014¥374.68

U.S. dollars
2015

43.91
6.00

(27.54)
2.00

0.37
0.05

2015

$3.84

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 were no potentially dilutive shares of common stock for the year ended March 31, 2015. Diluted net income per share had notbeen presented because there were no potentially dilutive shares of common stock and the Company and consolidated subsidiaries recorded
net loss for the year ended March 31, 2014.
Cash dividends per share represent the cash dividends proposed by the Board of Directors as applicable to the respective years together
with the interim cash dividends paid.

91

NTN’s Vision

26. Segment Information

2. Calculation methods used for net sales, income or loss, 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. Intersegment sales and transfer are recorded at the same prices used in transactions with third parties.

3. Information as to net sales, income or loss, assets, liabilities, and other items for each reporting segment for the years ended March 31, 2015
and 2014
Reportable segment information for the years ended March 31, 2015 and 2014 are summarized as follows:

Reporting segments

Millions of yen
2015

Americas

EuropeAsia andother areas

Total¥205,780
137,536
343,316¥ 27,557¥538,515¥373,039¥193,410
5,502
198,912¥  1,410¥188,125¥138,155¥181,642
5,564
187,206¥  3,701¥140,607¥ 84,647¥121,068
11,857
132,925¥ 10,082¥177,295¥ 62,928

Other items:
Depreciation and amortization
Capital expenditures¥ 15,708¥ 12,957¥ 10,379¥  5,186¥  7,278¥  6,072¥  7,027¥ 11,887

Reporting segments

Adjustments

Consolidated¥  701,900
160,459862,359¥   42,750¥1,044,542¥  658,769¥—(160,459)(160,459)¥   1,101¥(188,265)¥ (65,051)¥701,900—
701,900¥ 43,851¥856,277¥593,718¥   40,392¥   36,102¥—¥    (190)¥ 40,392¥ 35,912

Adjustments

Consolidated

Millions of yen
2014

Americas

EuropeAsia andother areas

Total¥190,819
132,763
323,582¥ 25,594¥487,759¥385,748¥167,899
3,944
171,843¥   2,645¥164,059¥124,918¥175,423
6,927
182,350¥   2,139¥171,366¥125,812¥104,830
8,977
113,807¥  4,405¥145,870¥ 54,989¥638,971
152,611
791,582¥ 34,783¥969,054¥691,467¥—(152,611)(152,611)¥   (1,779)¥(121,017)¥ (56,799)¥638,971—
638,971¥ 33,004¥848,037¥634,668

Other items:
Depreciation and amortization
Capital expenditures¥ 17,013¥   9,684¥   9,338¥   9,648¥   7,141¥   7,303¥   5,823¥   8,375¥ 39,315¥ 35,010¥—¥      (5)¥ 39,315¥ 35,005

Financial Section

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

Japan

Environmental Activities Supporting “NTN 100”

Sales, income andassets or liabilities byreporting segments:
Net sales:
Sales to third parties
Inter-segment sales and transfers
Total
Segment income
Segment assets
Segment liabilitiesJapan

CSR Activities Supporting “NTN 100”

(Accounting standards for retirement benefits)
The Company and its domestic subsidiaries adopted Section 35 of “Accounting Standard for Retirement Benefits” (ASBJ Statement No. 26 of
May 17, 2012) and the main clause of Section 67 of “Guidance on Accounting Standard for Retirement Benefits” (ASBJ Guidance No. 25 ofMarch 26, 2015) effective from April 1, 2014. As a result, the methods for calculating the retirement benefit obligation and service cost have beenrevised in the following respects: the method for attributing projected benefits to each period has been changed from the straight-line method
to the benefit formula method, and the method for determining the discount rate has been changed to use a single weighted-average discountrate reflecting the expected timing and amount of benefit payments. The impact of this change on the segment income in the “Japan” segment
is insignificant.

“NTN 100” Strategy

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 (the 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, CVJs and precision equipments for the aftermarket,
general industrial machinery market, and automotive market. Business activities in Japan are controlled by the Company (the Head Office), andoverseas business activities are controlled by the General Manager responsible in each region. Business entities in each region prepare their own
plans and strategies to conduct business activities while analyzing profitability and the investment efficiency of operations.
Accordingly, the Group has four reporting segments based on geographic business segmentation controlled by the Head Office or the
General Managers: Japan, the Americas, Europe, and Asia and other areas. Each reporting segment engages in the manufacture and sale ofbearings, CVJs, and precision equipments and other products.

92Thousands of U.S. dollars
2015
Reporting segments
Asia andEuropeother areas

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

Japan

Americas$1,712,407
1,144,512
2,856,919$  229,317$4,481,277$3,104,261$1,609,470
45,785
1,655,255$   11,733$1,565,491$1,149,663$1,511,542
46,301
1,557,843$   30,798$1,170,067$  704,394$1,007,473
98,6691,106,142$   83,898$1,475,368$  523,658

Other items:
Depreciation and amortization
Capital expenditures$  130,715$  107,822$   86,369$   43,156$   60,564$   50,528$   58,476$   98,918

Adjustments

Consolidated$5,840,892
1,335,267
7,176,159$  355,746$8,692,203$5,481,976$—(1,335,267)(1,335,267)$     9,162$(1,566,656)$  (541,326)$5,840,892—
5,840,892$  364,908$7,125,547$4,940,650$  336,124$  300,424$—$    (1,581)$  336,124$  298,843

Total

The total amount of segment income is adjusted to operating income of the consolidated statements of operations.
Other than those corresponding to segment assets, adjustments relate to the elimination of inter-segment transactions. The adjustments forsegment assets consist of inter-segment elimination of ¥258,544 million ($2,151,485 thousand) and ¥222,460 million and the corporate assetsof the group of ¥70,279 million ($584,829 thousand) and ¥101,443 million for the years ended March 31, 2015 and 2014, respectively. The
corporate assets are investments held by the Company, mainly cash and cash equivalents and investment securities.
4. Related information(1) Sales by products and service
Sales by products and service classified by the similarity of the market for the years ended March 31, 2015 and 2014 are summarized as follows:

Aftermarket

Sale to third parties

Sale to third parties¥112,433¥108,993

Aftermarket

Millions of yen
2014
Industrial
machinery
Automotive¥480,474¥103,845¥101,181

Aftermarket

Thousands of U.S. dollars
2015
Industrial
machinery
Automotive$935,616

Sale to third parties

Millions of yen
2015
Industrial
machinery
Automotive$906,990¥433,945$3,998,286

Total¥701,900

Total¥638,971

Total$5,840,892(2) Regional information(a) Sales
Sales categorized by country and region based on locations of customers within the group for the years ended March 31, 2015 and 2014 aresummarized as follows:
Millions of yen
2015
Japan

¥191,460

Americas¥202,561

Asia andother areas

Europe¥171,218¥136,661

Millions of yen
2014
Japan

¥179,082

Americas¥174,566

Asia andother areas

Europe¥166,280¥119,043

Thousands of U.S. dollars
2015
Japan

$1,593,243

93

Americas$1,685,620

Europe$1,424,798

Asia andother areas$1,137,231

Total¥701,900

Total¥638,971

Total$5,840,892

NTN’s Vision“Americas” includes the U.S.A., Canada and Central and South America. Europe includes Germany, France, the U.K. and others. Asia and otherareas include China, Thailand, India and others. The sales of the “Americas” segment above include the sales to customers in the U.S.A. of¥174,392 million ($1,451,211 thousand) and ¥149,677 million for the years ended March 31, 2015 and 2014, respectively.
(b) Property, plant and equipment
Property, plant and equipment categorized by country and region within the group at March 31, 2015 and 2014 are summarized as follows:
Millions of yen
2015
Japan

¥85,242Europe¥46,307

Millions of yen
2014
Japan

¥117,027

Americas¥79,148

Europe¥52,286

Thousands of U.S. dollars
2015
Japan

$929,017

Americas$709,345

Europe$385,346

Asia andother areas¥72,863

Asia andother areas¥60,930

Asia andother areas$606,332

Total¥316,052

Total¥309,391

Total$2,630,040

2.	Property, plant and equipment in “Europe” in the amount of ¥35,565 million ($295,956 thousand) and ¥40,043 million is located in France at
March 31, 2015 and 2014, respectively.
3.	Property, plant and equipment in “Asia and other areas” in the amount of ¥57,143 million ($475,518 thousand) and ¥46,812 million is locatedin China at March 31, 2015 and 2014, respectively.
5. Loss on impairment of fixed assets
Loss on impairment of fixed assets by reporting segment is summarized as follows:¥688

Americas¥1,325

Europe¥184

Asia andother areas

¥—

Total

¥2,197

Environmental Activities Supporting “NTN 100”Japan

CSR Activities Supporting “NTN 100”

1.	Property, plant and equipment in “Americas” in the amount of ¥77,890 million ($648,165 thousand) and ¥72,557 million is located in the
U.S.A at March 31, 2015 and 2014, respectively.

Millions of yen
2014“NTN 100” Strategy¥111,640

AmericasFinancial Section

94

Report of Independent Auditors95

Investor Information
Head Office

NTN’s Vision

As of March 31, 2015

Shareholders by Category

NTN Corporation
3-17, 1-chome, Kyomachibori,
Nishi-ku,
Osaka 550-0003, Japan

Financial Instruments Firms 1.51%
Other Corporations 14.83%

Investor Relations
Corporate Communications Dept.

Individuals 15.49%

Financial Institutions 42.62%

Fax: +81-6-6443-3226
E-mail: irmanager@ntn.co.jp

NTN on the Internet
NTN’s Website offers a variety of“NTN 100” Strategy

Phone: +81-6-6449-3528

Foreign Owners 25.55%

corporate and product information,
including the latest NTN report andfinancial results.
http://www.ntn.co.jp

Authorized 1,800,000,000 shares

Stock Price (Yen)

Nikkei Stock Average (Yen)

800

25,000600

20,000400

15,000200

10,000Issued and outstanding
532,463,527shares

Number of Shareholders(As of March 31, 2015)
24,244

Transfer Agent for Common Stock
Corporation 4-5, 1-chome,0

Marunouchi, Chiyoda-ku,
Tokyo 100-8212, Japan

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
2013
2014
2015
High
Low

Closing
Opening

Opening
Closing

Nikkei stock average

Stock Exchange Listings
First Section of Tokyo Stock Exchange(#6472)Monthly Volume Traded
Independent Accountants
Ernst & Young ShinNihon LLC(Million Shares)

300

General Meeting of Shareholders
The General Meeting of Shareholders
was held on June 24, 2015 in Osaka

High: ¥647
Low: ¥331

250
200
150

Financial Section

Stock Price Range in the Fiscal Year
Ended March 31, 2015

5,000

Environmental Activities Supporting “NTN 100”

Mitsubishi UFJ Trust Banking

CSR Activities Supporting “NTN 100”

Common Stock(As of March 31, 2015)

Tokyo Stock Price Range

100
50
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
2013
2014
2015

96

Global Network
As of March 31, 2015

Consolidated Subsidiaries

Paid-in Capital

Holding as
percentage (%)

Consolidated Subsidiaries

Consolidated Subsidiaries

Paid-in Capital

21 AMERICAN NTN BEARING

1 NTN BEARING SERVICE CORPORATION¥480,000,000100

2 NTN MIE CORP.

¥3,000,000,000100

3 NTN KONGO CORP.

¥1,000,000,000100

4 NTN HOUDATSU SHIMIZU CORP.

¥1,250,000,000

100

5 NTN NOTO CORP.

¥1,000,000,000100

6 NTN FUKUROI CORP.

¥1,500,000,000

100

7 NTN AKAIWA CORP.

¥1,250,000,000

100

8 NTN MIKUMO COMPANY LTD.

¥450,000,000100

9 NTN OMAEZAKI CORP.

¥266,000,000

97.4

10 NTN ENGINEERING PLASTICS CORP.

¥100,000,000100

11 NTN POWDER METAL CORP

¥400,000,000

100

12 NIPPON KAGAKU YAKIN CO., LTD.

¥100,000,000

98.1

MFG. CORP.

US. $24,330,000

100

(100)

US. $117,000,000

100

(100)

23 NTK PRECISION AXLE CORP.

US. $15,000,000

60

(60)

24 NTA PRECISION AXLE CORP.

US. $20,000,000

62.5(62.5)

22 NTN-BOWER CORP.

25 NTN BEARING CORP. OF

CANADA LTD.

27 NTN MANUFACTURING DE

MEXICO, S.A.DE C.V.

28 NTN do Brasil Producão de

Semi-Eixos Ltda.

29 NTN Wälzlager (Europa)

G.m.b.H.

30 NTN Kugellagerfabrik(Deutschland) G.m.b.H¥450,000,000100

14 NTN KINAN CORP.

¥450,000,000

100

15 NTN KAMIINA CORP.

¥725,000,00080

32 NTE Gardelegen G.m.b.H.

16 NTN Technical Service Corp.

¥200,000,000

100

33 NTN BEARINGS (UK) LTD.
34 NTN-SNR ROULEMENTS

31 NTN Antriebstechnik G.m.b.H.

¥10,000,000

100

US. $181,120,000

100

19 NTN BEARING CORP. OF AMERICA

US. $24,700,000

100

(100)

20 NTN DRIVESHAFT, INC.

US. $54,580,000

100

(100)

18 NTN USA CORP.

CAN. $20,100,000

100

US. $700,000

100

Mex. $231,195,369

100

(5)

BRL 79,479,763

100(13.37)EURO14,500,000

100EURO 18,500,000

100

26 NTN-SUDAMERICANA, S.A.

13 NTN CASTING CORP.

17 NTN LOGISTICS CO., LTD.

(100)

Holding as
percentage (%)

35 NTN TRANSMISSIONS EUROPE
36 NTN TRANSMISSIONSEUROPE CREZANCYEURO 50,000

75EURO 1,500,000

100

STG. £2,600,000

100EURO 123,599,542

100

EURO 82,843,207

100EURO 9,000,000

100(0.04)

(100)

33
35 36

30 31 32
29
34
60
53
51
45
50 54

44

39

61 46
48

52

47
62
49 58
57

40
41

38

37
42 43

59

97

Consolidated Subsidiaries

Paid-in Capital

37 NTN BEARING-SINGAPORE(PTE) LTD.

100

M. $10,000,000

60

(60)

BAHT 780,000,000

100(99.999)

BAHT 1,311,000,000

100(99.999)

SDN. BHD.

39 NTN BEARING-THAILAND

CO., LTD.

(THAILAND) CO., LTD.

Consolidated Subsidiaries

S. $36,000,000

38 NTN BEARING-MALAYSIA

40 NTN MANUFACTURING

Holding as
percentage (%)

41 NTPT CO., LTD.
42 PT. NTN BEARING INDONESIA
43 PT. NTN MANUFACTURING

INDONESIA

44 NTN BEARING INDIA

PRIVATE LTD.

45 NTN NEI Manufacturing India

Private LTD.

46 NTN KOREA CO., LTD.

BAHT 700,000,000

75

US. $7,300,000100(10.73)

US. $17,250,000

100(0.006)

INR 300,000,000

100

(0.1)

INR 3,238,000,000

96.14(0.002)

WON 500,000,000

100
100
100

(86.67)49 Shanghai NTN Corp.

US. $166,500,000

95(15.72)

US. $12,500,000

60

(12)

US. $34,000,000

60

(60)

US. $28,440,000

100Co., Ltd.

50

HK. $2,500,000

100

55 ASAHI FORGE OF AMERICA CORP.

US. $7,100,000

28.2

56 Seohan-NTN Driveshaft USA CORP.

US. $6,000,000

49

57 TUNG PEI INDUSTRIAL CO., LTD.
58 TAIWAY Industry CO., LTD.

US. $180,000,000

52 NTN-RAB (Changzhou) Corp.

US. $73,800,000(50)

Affiliated Companies Accounted for by the Equity Method(100)

US. $256,545,000

Co., Ltd.

54 NTN CHINA LTD.

Holding as
percentage (%)

Other than above, other 11 companies

48 Nanjing NTN Corp.

51 Xiangyang NTN-Yulon Drivetrain

53 NTN-LYC (Luoyang) Bearing Corp.

(0.969)47 NTN (CHINA) Investment Corp.

50 Guangzhou NTN-Yulon Drivetrain

Paid-in Capital

59 UNIDRIVE PTY LTD.
60 Beijing NTN-Seohan Driveshaft

Co., Ltd.

61 Seohan-NTN Bearing CO., LTD.
62 NTN-DONGPAI (Shanghai) Bearing

Sales Corp.

NT. $1,257,232,620

27.35

NT. $160,000,000

36.25

A. $5,000,000

40

US. $6,000,000

40

WON 71,200,000,000

49

US. $1,460,000

25(28.2)(6.67)(25)

Notes 1. The scope of consolidation as of March 31, 2015 consisted of NTN Corporation and
65 consolidated subsidiaries (17 domestic and 48 overseas subsidiaries). A total of 8affiliates (all overseas affiliates) were accounted for by the equity method. The
following changes to the scope of consolidation and application of the equity method
were made during the fiscal year under review.
◇ Consolidated Subsidiaries (No increases, decreases)◇ Affiliates (One company decreased) Nanjing Puzhen NTN Railway Bearing Co., Ltd.
2. Of the above consolidated subsidiaries, NTN USA CORP., NTN DRIVESHAFT, INC.,
NTN-BOWER CORP., NTN Wälzlager (Europa) G.m.b.H., NTN-SNR ROULEMENTS,
NTN TRANSMISSIONS EUROPE, NTN NEI Manufacturing India Private LTD., NTN(CHINA) Investment Corp., Nanjing NTN Corp., Shanghai NTN Corp. and NTN-LYC(Luoyang) Bearing Corp. are specified subsidiaries.
3. Figures in curved brackets under “Holding as percentage” indicate the percentage ofindirectly owned holdings, and are included in the total holding.

25
18
21 19
24 23
20
22
55
56

27

26

28

5
4
13
7

16
3

15
2
10 1711
12
6 9
8

1

14

98

NTN Corporation
3-17, 1-chome, Kyomachibori,
Nishi-ku, Osaka 550-0003, Japan
http://www.ntn.co.jp

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2015．０９．４０００ 凸