Contributing to
the Global Society
with
Cutting-edge Technologies
for the Future

NTN Report2010
for the year ended March 31, 2010

NTN Corporation

Corporate Philosophy

For

New Technology Network“We shall contribute to international society through creating
new technologies and developing new products.”
The directors and employees of NTN Group companies strictly adhere to Company rules of conduct
and strive to be consistently fair and responsible in their business activities. Through these actions,
NTN seeks to fulfill the NTN Group’s responsibility to its shareholders, as well as its customers, local
communities, and other stakeholders.

Creating New Valuein the Industrial Machinery Field
As one of the world’s foremost bearings
manufacturers, NTN is creating new value
in R&D of new products and elemental
technologies in wide-ranging industrial
machinery fields such as medicine and theenvironment, in addition to construction
machinery, aircraft, railcars and wind power
generation.

Contents
Management

Financial Highlights
To Our Stakeholders
Feature: Interview With the Top Management
Corporate GovernanceManagement
CSR Promotion Structure
Compliance, Risk Management
Intellectual Property Strategy
Feature 1: NTN Advances Hand in Hand with “MONOZUKURI”
Feature 2: Technology Fusion and Development
That Takes Maximum Advantage of Group Synergies
Feature 3: The Development of Eco-Products

CSR

3
5
6
9
10
11
12
13
15
17
19

Business

At a Glance
Bearings
Constant-Velocity Joints
Precision Equipment and Other Products

1

NTN Report 2010

21
22
27
30

Responsibility to Customers
Responsibility to Suppliers
Responsibility to Shareholders
Responsibility to Employees
Responsibility to Local Communities

31
34
35
36
39

Environment

Environmental Policy and Management Structure
Environmental Impact of Business Activities
Environmental Targets and Results
Measures Against Global Warming
Efforts to Reduce Waste
Managing Environmentally Hazardous Substances
Environmental Contribution Through Products
Third-Party Opinions

41
44
45
47
49
50
51
52

Profile
Since 2008, SNR Roulements (SNR), which is the No. 1
bearing manufacturer in France, has been a member of the
NTN Group. This is generating further synergies and enhancing
our presence in the European region.
NTN is aggressively developing business in newly emerging
markets, which are achieving notable economic growth. In
China, the Company has six production bases manufacturing
bearings and CVJs. The Company also manufactures bearings
and CVJs in India, Brazil, Romania and Thailand.
In order to respond speedily to changes in the global
economic environment, NTN started a two-year medium-termmanagement plan, “NTN 2010 for The Next Step” in April 2009.
Aiming to implement lean management that does not rely solely
on business scale, NTN is strengthening its business following
the fundamental principle of “technological leadership.”Management

NTN is a precision equipment manufacturer whose mainstay
product is bearings. The Company ranks among the top
in the world in bearing sales, and holds the largest shareof the global market for axle bearings, automotive criticalcomponents in wheel application.
In fields other than bearings, NTN holds the second-largest
global market share of constant-velocity joints (CVJs), a key
component for automotive drivetrains. We are now aiming tocapture the No. 1 spot in the world market.
NTN does business globally, with a five-sided sales andproduction network encompassing Japan, the Americas,
Europe, Asia, and China. The NTN Group has approximately
18,000 employees, more than 60% of whom work overseas.
Today, the ratio of overseas sales to consolidated net sales
exceeds 60%.

Business“MONOZUKURI” (manufacturing) Starts With
“HITOZUKURI” (developing the individual)

CSR

The cornerstone of NTN as a manufacturing company
is the sophisticated knowledge and skills accumulated
over its 90-year history. In order to pass on thisknowledge and skill to future generations as well as torefine it, NTN is strengthening personnel development
globally through various programs such as its “Meister
System” and “Skill Training,” thereby fostering the NTNGroup’s strong competitiveness.

Environment

Era-leading Automotive Components
NTN has its bases all around the world that develop
technology to make automotive components, namely
axle bearings and CVJs, for next-generation and other
Electric Vehicles (EVs), to make the components morecompact and lighter, and to reduce fuel consumption.

Financial Section

Editorial Policy

Financial Section

53
56
57
59
60
61
62
74

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
other information, will held garner the understanding and support ofall stakeholders. This inaugural “NTN Report,” which from this fiscal
year combines the “Annual Report” and the “CSR Report” partly out ofconsideration for environmental resources, is part of this active approach
to information disclosure.

Corporate Information

Financial Review
Risk Factors
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Changes in Net Assets
Consolidated Statements of Cash Flows
Notes to the Consolidated Financial Statements
Report of Independent Auditors

NoticeCorporate Information

NTN Group Investment Holdings
NTN’s Global Network
Investor Information

75
76
78

This report contains forecasts and projections regarding NTN’s futureplans, strategies, and business results.
Please note that actual business results may vary from the projections
made herein by the Company.

NTN Re port 20102

Financial Highlights
NTN Corporation and consolidated subsidiaries

Years ended March 31

Millions of yen (except per share amounts)

2010

2009

2008

2007

2006

Net sales .........................................................

¥452,745¥527,100¥533,985¥483,818¥434,837

Operating income............................................

1,399

9,479

49,612

46,79337,645

Income (loss) before income taxes...................

(1,837)(10,104)

44,31345,17030,370

FOR THE YEAR DATA

Net income (loss).............................................

(2,014)(8,985)27,43127,014

19,550Capital expenditures........................................

21,504

49,59459,504

59,34749,284

Depreciation ....................................................

40,70245,75939,54732,69328,586

R&D costs .......................................................

14,687

17,402

15,006

14,221

14,771

Total assets .....................................................

¥618,801¥627,613¥629,464¥611,944¥561,494

Net assets/Shareholders’ equity ......................

214,550

192,223

216,401

215,815

183,247

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

17,95920,67918,96017,306

14,631¥374.19¥376.77¥445.98¥445.61¥396.73- Basic ............................................................

(4.00)(19.14)

58.43

58.34

41.94

- Diluted ..........................................................

–

–

54.59

53.74

38.55

Cash dividends ...............................................

8.00

13.00

19.00

16.00

11.00

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

(0.3%)(1.3%)

4.4%

4.6%

3.6%

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

(1.1%)(4.3%)

13.1%

13.8%

11.5%

Shareholders’ equity ratio ................................

32.2%

28.2%

33.3%

34.2%

32.6%

YEAR-END DATAPER SHARE DATA
Net assets .......................................................
Net income (loss):

OTHER INFORMATION

U.S. dollar amounts have been converted from yen, for convenience only, using the approximate exchange rate on March 31, 2010, which was U.S.$1 = ¥90.04.

Net sales

Operating income/Operating margin

Net income (loss)

Billions of yen

Billions of yen/%

Billions of yen（%）

Billions of yen

Billions of yen

600

100

10

80

8

500

Billions of yen

30

20
Operating margin

400

6

60
Operating income

300

10

40

4

20

2

200
100
0

0

0
2006

2007

2008

2009 2010

2006

2007

2008

2009 2010

0

-10
2006

2007

2008

2009

2010

Years ended March 31

3

NTN Report 2010

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

Millions of yen (except per share amounts)

2004

2003

2002

2001

2000

¥388,349¥357,394¥342,745¥324,339¥340,551¥326,474$4,866,144

33,201

24,70920,7858,140

14,335

9,675

15,037

26,58618,181

6,198

(701)

6,888

(41,822)(19,755)

16,74011,032

2,657

(132)

4,289

(24,677)(21,657)

49,67038,09225,26421,08824,12326,013

231,127

24,87023,97923,83824,40023,402

24,122437,468

14,952

13,543

12,255

11,706

10,618

9,779

157,857¥516,578¥460,341¥467,198¥462,895¥478,945¥494,677$6,650,924

157,952

142,487

134,928

138,532

138,625

143,8742,306,008

12,788

11,885

11,81011,98912,61912,770¥341.93¥308.27¥291.82¥299.27¥299.44¥310.77

$4.03

35.83

23.54

5.70

(0.29)

9.26(53.30)(0.05)

32.94

21.87

5.51

–

8.78

–

–

8.50

5.50

5.00

5.50

6.00

6.50

0.09

3.4%

2.4%

0.6%

(0.03%)

0.9%(5.0%)

11.1%

8.0%

1.9%

(0.1%)

3.0%(15.6%)

30.6%

31.0%

28.9%

29.9%

28.9%

29.1%

2010

Total assets/ROA

Shareholders’ equity/ROE

Capital expenditures/Depreciation

Billions of yen/%

Billions of yen/%

Billions of yen（%）

Billions of yen

1,000

5

800

4
Total assets

600

3

400

2

200

1

0

0

（%）

Billions of yen

300

15

Billions of yen

60
Capital expenditures

Shareholders
equity200

Management

2005

Depreciation

10
40

100

5

0

0

20
ROA

ROE

-1
-2

2006

2007

2008

2009

2010

-5
2006

2007

2008

2009

2010

0
2006

2007

2008

2009

2010
Years ended March 31

NTN Re port 20104

To Our Stakeholders

Yasunobu Suzuki

Hirotsugu Mori

Chairman and CEO

President

The Japanese economy in the business year ended March 2010 saw a steady recovery in theautomotive industry thanks to the effects of economic stimulus measures, but the recovery wasdelayed in some areas of the manufacturing industry, with prolonged inventory adjustments, etc., andthe unemployment rate was also high, demonstrating that conditions were severe overall. Among
overseas economies, Asia is recovering, led by China, and while the Americas and Europe are also
recovering gradually, unemployment rates remain high, as in Japan, and conditions are also severe
overall.
In this environment, the NTN Group is promoting measures such as increasing sales to the industrial
machinery sector and lowering costs, “aiming for operations that do not rely on business volume,”
the objective of the new two-year medium-term management plan, “NTN 2010 for The Next Step,”which started in April 2009. We will strengthen our business following the fundamental principle oftechnological leadership, based on NTN’s corporate philosophy of “For New Technology Network”, andcomplete a V-shaped recovery in the business year ending March 2011, leading to new growth in the
future.
NTN also positions Corporate Social Responsibility (CSR) as the foundation of its management,
and will return to the roots of “MONOZUKURI” (manufacturing), re-affirming what it is that society
and customers want from the perspective of society and customers, and working towards sustained
development of society and the corporation as well as increased corporate value.
In our environmental protection activities as well, which the entire group is working on, we will
accelerate development of eco-products based on the keywords of global environmental protection,energy conservation, and resource conservation, and speed up development of new products that
respond to new needs, such as new energy sources.
We look forward to the continued support and understanding of our shareholders and stakeholders.

5

Yasunobu Suzuki

Hirotsugu Mori

Chairman and CEO

President

NTN Report 2010

Feature: Interview With the Top Management

Management

NTN is eyeing a V-shaped
recovery by reinforcing
business targeting industrial
machinery and other sectors.
Progress of initiatives for completing the “NTN 2010
for The Next Step” medium-term management planand related growth strategies

Q

Please give us a progress report on the“NTN 2010 for The Next Step” medium-term
management plan, which covers the two years
from April 2009.

Sales for the business year ended March 2010 were ¥452.7
billion, down 14% from the previous year.
Operating income was ¥1.4 billion, also down from theprevious year. For the business year ending March 2011, weare forecasting a V-shaped recovery to sales of ¥510 billion
and operating income of ¥20 billion due to a recovery indemand and the numerous measures we have taken to date,such as strengthening the industrial machinery business.

Operating margin
(%)

8.6

8.7

9.7

9.3

1.8
0.3
Operating income(Billions of yen)

Net Sales
Operating income

600

60

534.0
483.8

500

434.8
400

527.1

510.0
50

49.6

452.7

46.8

388.3

40

37.6
300

33.2

30

20.0

200

100

20

10

9.5
1.4

0

FY2004

FY2005

FY2006

Rapid Advance 21

FY2007

FY2008Growth throughCreativity andAchievements 21

FY2009 FY2010
Actual results Forecast

NTN 2010 for
The Next Step

We will strengthen our business following the fundamental
principle of technological leadership, based on NTN’s
corporate philosophy of “For New Technology Network”,
taking the following steps.

Sales-related measures
In terms of sales-related measures, we are setting up
specialist teams by sector in order to increase sales to theindustrial machinery and the aftermarket/distributor sectors,
and strengthening sales to the wind power generation androlling stock areas, which contribute to global environmental
protection, as well as to the aircraft field. Meanwhile, in theautomotive sector, we are emphasizing earnings while also
conducting aggressive sales activities, especially in emerging
countries.

Production-related measures

3.9

Net Sales(Billions of yen)tell us the status of
Q Please“NTN 2010 for The Next Step” measures.

0

In terms of production-related measures, we are reducing
inventories by shortening lead time and other measures, andlowering costs by producing at the optimal location from a
global perspective, as well as boosting production capacity.
With regards to large bearings for industrial machinery, weboosted production capacity in the Noto district of Ishikawa
Prefecture, starting up NTN Houdatsushimizu Corporation(Ishikawa Prefecture) in October 2009 and NTN Shika
Corporation (Ishikawa Prefecture) in January 2010. We alsoestablished in January 2010 a joint venture called SeohanNTN Bearing Co., Ltd.
(Gyeongju City) with Seohan
Industries Co., Ltd., which
has strong business ties with
the Hyundai Group in South
Korea, and we plan to
manufacture and sell large
bearings for wind turbines inSouth Korea for the first time Signing ceremony with
Seohan Industries Co., Ltd.
from March 2011.

NTN Re port 20106

Feature: Interview With the Top Management

In order to steadily fulfill our social responsibility amidst the
global economic recession, we will return to the roots of“MONOZUKURI” (manufacturing), re-affirming what it is thatsociety and customers want from their perspective, andworking towards sustained development of society and thecorporation as well as increased corporate value.

are operating your business globally;
Q You
please tell us your views on globalization.

In the US, we are boosting production capacity for constantvelocity joints and hub bearings in line with the recovery indemand for automotive.

R&D-related measures
In terms of R&D-related measures, wewill utilize “High-Resolution Sensor
Bearing” jointly developed with SNR andstrengthen development of modular
products for next-generation EVs, suchas “Intelligent In-Wheels” to contribute tobetter safety, fuel economy, and reduced
CO2 emissions in automobiles. At our
R&D Center for Elemental Technologies(Mie Prefecture) completed in 2009, weIntelligent In-Wheel
will delve deeper into elemental
technologies and strengthen our R&D capacity for industrial
machinery products.

Measures to enhance the earnings structure
As for measures to enhance the earnings structure, we areworking to drastically improve asset efficiency in addition to
reducing fixed costs. The Company seeks to minimize capital
expenditures by enhancing the capacity utilization rate, while
improving personnel cost efficiency by raising productivity
through more efficient human work operations.

tell us your views on Corporate Social
Q Please
Responsibility (CSR).
Our declared corporate philosophy is “We shall contribute tointernational society through creating new technologies anddeveloping new products” and we have positioned CSR as
the foundation of our management. We will work to meet the
expectations and trust of our customers, and shareholders
and investors, as well as stakeholders such as suppliers,
employees, and local communities.

NTN has an overseas sales ratio of 60%, but we do not lookat regions overseas as merely markets to sell our products.
Rather, NTN aims to become a global company with local
roots ranging from manufacturing to distribution and sales.
There are various cultures, business practices, and value
systems in the world, so we cannot force the “Japanesestandard” onto the world, nor can we look at all countries as
the same. It is becoming increasingly crucial to view the world
not as one place, but with a multidimensional sense of global
outlook. By respecting other cultures, we believe that mutual
trust with local people will become stronger, contributing to
NTN’s growth.

tell us about NTN’s environmental
Q Please
initiatives.

We have set our NTN Environmental Policy, and the entire
group is working on environmental protection activities, suchas reducing CO2 emissions to prevent global warming andreducing waste products.
NTN’s main products, bearings and constant velocity joints,
are “Eco-products” that reduce energy loss from friction, andtheir use in wind power generators, which use natural energy,
and rolling stock, which is a clean form of transportation, also
contributes to the environment.
Meanwhile, at our manufacturing plants, we are conducting
large-scale energy-conserving upgrades to utility facilities suchas compressors, air conditioning, and lighting as a measure toprevent global warming, conserving energy at heat-treatment
facilities by switching fuels, and introducing environmentallyfriendly processing methods that do not use oil, as well ascompact production lines. We are also promoting effective useof natural energy when establishing new plants by introducing
solar and wind power generators, and also reducing waste
products through our “grinding swarf briquetting machine,”realizing plants that are friendly to the global environment.

Solar panels at NTN Mie Corp.

7

NTN Report 2010

Please tell us about your relationships withQ suppliers and local communities on theenvironmental front.

tell us about NTN’s policies towards
Q Please
new growth in the future.
We will be working on the following three important
issues.
①Acceleration of business expansion in emerging
countries
In emerging countries such as China, India, and Brazil, where
demand for bearings is rapidly increasing in recent years, wewill strengthen our business by using local materials andfacilities, as well as local people, based on our philosophy of“On local ground with local materials by local personnel” andaim for significant growth. In China, we began construction of
the NTN China Technical Center (Shanghai) in April 2010, andwe intend to strengthen design and evaluation/testing
functions to increase sales.
We will also greatly increase our local manufacturing
company’s capacity to produce bearings and constantvelocity joints. In August 2010, we will establish a joint venturewith Luoyang LYC Bearing Co., Ltd., a top-class Chinesebearing maker, to produce and sell automotive bearings aswell as expand our sales network within China through a sales
tie-up, and aim for sales of ¥100 billion in 2015.

②Strengthen business in environmental and newenergy markets
In the automotive sector, next-generation EVs andenvironmental measures for existing automotive are awaited,
and we believe that it will be important to respond to the“electrification” and “move to lower fuel consumption” forautomobile. As for electrification, we are focusing on
developing new technologies such as the Intelligent In-Wheel
for next-generation EVs, and with regards to the move tolower fuel consumption, we will continue to focus going
forward on research into making bearings used in engines,
drivetrains, and suspensions smaller and lighter, with lower
torque.
In the industrial machinery sector, we will focus ondeveloping and providing sensor technology for monitoring
bearing usage in response to the move to larger construction
machinery and wind power generation, as well as to improve
operation rates. As for rollingstock and aircraft, for which
demand continues to increase due
to environmental issues, we will
utilize the technology and sales
power of both NTN and SNR, andaccelerate business activities
Automotive Engineering
Exposition 2010 (Yokohama)around the world.

③Strengthening response to the market throughbusiness headquarters system
We reorganized ourselves into the “Industrial Business
Headquarters” and the “Automotive Business Headquarters”
in February 2010. By adding the production division to theprevious product headquarters organizational structure, wecreated a “unified sales,” “technology” and “production
structure,” which will speed up our responses to market
changes, through which we will realize expansion of sales andprofits.

Accelerating business development inemerging markets

China“On local ground with local materials
by local personnel”

Romania

Management

As a measure to help our suppliers create environmental
management systems, we are supporting the acquisition of“Eco-Stage,” which is a simplified version of the ISO14001
standard. We also distributed “Household Eco-AccountBooks” to employees’ families, continuing to promote energy
conservation at home. We are also
conducting “NTN Kigyo no mori”(NTN Corporate forest stewardship)
activities as a community service,strengthening mutual exchanges
with local communities while“NTN Kigyo no mori” atexperiencing nature.
Iwata Works

Elsewhere, we began production of constant velocity joints
in Romania from October 2009, and will bolster production
capacity for hub bearings and begin production of constantvelocity joints in Brazil in 2011. We will also increase
production capacity for constant velocity joints in India in
2010.

Boosted CVJ production capacity (2010)
Establish the technology center (2011)
Boost bearing production capacity (2011)
Alliances with local companies (2011)

Start of CVJ production (2009)
Conceptual image of completed
NTN China Technical Center

India

South Korea

Start production oflarge bearings (2011)

Thailand

Boosted hub bearing
production (2009)

Boosted CVJ production capacity (2010)

BrazilBoost hub bearing production (2011)
Start CVJ production (2011)

NTN Re port 20108

Corporate Governance

NTN is promoting the creation of mechanisms that enhance
management transparency.
Basic Approach to Corporate GovernanceReinforcing and enhancing corporate governance is oneof our top priorities. In addition to providing shareholders
and investors with the most accurate information in a timely
manner, we work to ensure greater management transparency
through sound and efficient management practices.
Improving Our Corporate Governance Structure
NTN employs a corporate auditor-based governance system.
To reinforce its corporate governance organization, the Company is strengthening its Board of Directors and, through its
corporate auditors, its management oversight organization.
Internal Control System Placement and Operation
NTN Corporation has put in place and operates internal
control over financial reporting in accordance with the basic
framework for internal control set forth in “On the Settingof the Standards and Practice Standards for Management
Assessments and Audits Concerning Internal Control Over
Financial Reporting (Council Opinions)” published by theBusiness Accounting Council in 2007. An assessment ofinternal control over financial reporting was conducted with

March 31, 2010, the end of the fiscal year under review, as thereference date and conformed to the assessment standards
for internal control generally accepted in Japan.
Corporate Governance Structure
Stockholder Meeting
Assigns/
Removals

Assigns/
Removals

Corporate
Auditors

Board ofDirectors

Assigns/
Removals
Accounting
Auditors(Audit firm)

AuditsBusiness Strategy
Committee
Executive
Committee(Other positions omitted)

Board of Directors:

Corporate Auditors:

The role of the Board of Directors is to make decisions
relating to fundamental business policies, statutory mattersand important management issues, and to supervise theperformance 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.

NTN has four corporate auditors, two of whom are standing
auditors (with three of the four being outside auditors). The
auditors are responsible for auditing the performance of
duties by members of the board. Auditors attend board
meetings and express their opinions as part of their efforts tomaintain and improve the transparency and fairness of theCompany’s management supervision system. The system isstructured to enable standing auditors to participate andexpress their opinions during meetings of the Business
Strategy and Executive committees. The corporate auditors
also strive to increase the efficiency of the overall auditing
process, meeting regularly to coordinate their own corporate
audits, independent public auditing firm audits, and internal
audits. There are no special business relationships orinterests between the outside auditors and NTN.

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

Executive Committee:
NTN introduced the Executive Officer System in fiscal 2004
to enable swift decision-making and business execution.
Reviews of monthly performance are conducted by the
Executive Committee, comprising Directors and Executive
Officers.

Internal Audit Department:
The Internal Audit Department is responsible for internal
audits, and has been established as an independent auditingorganization to audit business execution throughout theCompany.

Purpose of Takeover Defense Measures
At a board meeting in 2008, the Board of Directors resolved
to introduce the Policy toward Large-scale Purchases of theCompany’s Shares (the advance-warning type takeover
defense measures). This resolution was later approved at theGeneral Meeting held the same year. The purpose of thisPolicy is to preserve and enhance the corporate value and9

NTN Report 2010

the interests of shareholders. To this end, the Policy works toensure that the shareholders could receive sufficient
information regarding the proposed purchase, and that
adequate period is secured for opportunities to sincerely
negotiate the matter in good faith.

Management(As of June 25, 2010)

Management

10

8

2

3

6
5

1

4

9

7

11

12

Directors
1. Chairman and CEO

Yasunobu Suzuki
3. Deputy President

Osamu Wakisaka
6. Director

Masashi Honma
9. Director

Shigeyoshi Takagi

2. President

Hirotsugu Mori
4. Managing Director

5. Managing Director

Kenji Okada

Yoshikazu Fukumura

7. Director

8. Director

Fukumatsu Kometani
10. Director

Hitoshi Takai
11. Director

Yoshio Kato

Hironori Inoue

Statutory Auditors

Executive Officers

Standing Statutory Auditors

Senior Executive Officer

Akio Imanishi
Mizuho Hikida

Shoji Kido

12. Director

Hisaji Kawabata

Executive Officers
Statutory Auditors

Tadao Kagono
Norifumi Ishii

Yasunori Terada
Seiichi Konishi
Yoshinobu Yasuda
Didier SEPULCHRE DE CONDE
Toshiharu Kato
Yukiyoshi Hagimoto

Tetsuya Kondo
Takayuki Matsuo
Toru Tomiyama
Katsuhiko Iwamoto
Yoshihiro Inami
Takashi Hosoya

Tatsunobu Yasui
Hiroshi Ohkubo
Keiji Ohashi
Yoshinobu Akamatsu

NTN Re port 201010

CSR Promotion Structure

NTN conducts specific CSR activities based on its CSR Policy,
Employee Code of Conduct, and Business Code of Conduct.
Basic Stance and Policy
In 2006, NTN formulated its “CSR Policy” based on “NTN’s Basic
Policies” for implementing its corporate philosophy. NTN works toensure that all officers and employees are familiar with this policy.
At NTN, CSR activities are designed to fulfill the Company’s
accountability to stakeholders and incorporate consideration forenvironmental protection in corporate activities and measures tocontribute fairly to society. At the same time, CSR activities aim to

CSR Promotion Structure
Chief Management
Officer

Department in charge andthe Committee Office

CSR Management(CSR Dept.)

CSR Committee

enhance not only corporate activities with an economic benefit,
but those with environmental and social benefits, too.
The CSR Policy encapsulates corporate action policies toward
stakeholders at the same time as corporate responsibilities tosociety. Officers and employees must practice corporate social
responsibility in their daily activities in conformity with the CSR
Policy.
NTN has also formulated the “Employee Code of Conduct”
and the “Business Code of Conduct”. The Employee Code of
Conduct sets out guidelines for all employees in implementing
CSR activities, whereas the Business Code of Conduct sets out
standards all officers and employees must adhere to in businessactivities.
In order to ensure CSR activities are seen as an integral
element of everyday work, NTN has distributed a “CSR
Guidebook” and “Response Card” to all officers and employees.

Managing departments

CSR Database
Sales Planning
Department

Procurement
Department

Quality Management
Department

Intellectual Property
Planning Department

Environmental
Management Department

Personnel
Department

Legal
Department

General Affairs
Department

Corporate Planning
Department

In January 2010, NTN built a CSR database called Everybody’s
CSR, with the aim of enhancing understanding of CSR activities
and raising compliance awareness. Besides containing the
CSR Policy, the Employee Code of Conduct and the Business
Code of Conduct, the database provides various information
concerning CSR on a timely basis, including social contribution
activities closely tied to regional communities at operating sites
in Japan and overseas, examples of compliance violations atother companies, and a CSR glossary. In this way, NTN deepens
understanding of and encourages participation in CSR activities.

Operating departments
Implementing Departments (plants,
Engineering Departments, Research & Development,
Sales) and Subsidiaries

Compliance Subcommittee

Other Subcommittees

CSR Policy
1 Legal compliance/Policy for activities:
We shall comply with both the letter andthe spirit of laws and regulations, and carryout our business activities in an open andhonest manner.
2 Customers: We shall strive to develop newtechnologies and new products, as well as
to provide safe and reliable products.
3 Business partners: We shall engage in fairand free competition, and at the same time
establish excellent partnerships with ourbusiness partners.
4 Stockholders/Disclosure of information:
We shall work to develop this corporationand increase stockholder return, while atthe same time communicating broadly withsociety and actively disclosing information.
5 Employees: We shall value the individuality and diversity of our employees, work tocreate a safe and pleasant work place, andachieve comfort and prosperity.
6 The environment: With ample consideration to preserving the global environment
and protecting the ecosystem, we shallwork toward the creation of a sustainable,
progressing society.
7 Society: We shall make every effort to interact meaningfully with society on a local level,
and to engage in activities that contribute tosociety.
8 International activities: We shall, as amatter of course, obey all international rules
as well as the laws of each country andeach region that we operate in; we shall also
respect local cultures and practices andcontribute to local development.

11

NTN Report 2010

CSR Managers
Persons in charge of CSR

Corporate
Philosophy

NTN’s Basic Policies

Employee Codeof Conduct
Guideline to encourage
aggressive actions

Business Codeof Conduct
Guideline forcompliance actions

Employee Code of Conduct
1 We respect social ethics and act as goodmembers of society.
2 We have noble ambitions and always makeefforts to brainstorm and achieve the set
target.
3 We accept changes, have broad vision andact voluntarily.
4 We deepen mutual understanding and enhance the vitality of our work site.
5 Management and supervisors in particular, as
faces of the corporation, improve their qualifications, make efforts to develop individuals,
always take care of safety 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 withbusiness 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 and private
matters
22 Confronting harmful social forces
23 Proper utilization of our information system
24 Prohibition of insider trading
25 Self-restraint regarding entertainment andgifts
26 Lawful donations/political donations

Compliance, Risk Management

Risk Management System

NTN has the Compliance Subcommittee as an advisory bodyunder the CSR Committee. This subcommittee is charged withcomprehensively promoting and managing compliance initiatives
for the entire Group.

NTN has formulated a “Risk Management Policy” and “RiskManagement rule” for proper management to prevent risks and toquickly deal with them should they materialize. Risk is managed in
an integrated manner with coordination by the Risk Management
Committee.

Management

Compliance Management System

Promotion of Compliance Education
NTN has appointed CSR managers and persons in charge of
CSR in each department. CSR managers implement complianceeducation programs in each department that are prepared withthe support of the CSR Dept.
Furthermore, as part of personnel training and development,compliance training is given to new employees and people
promoted to managerial positions.
In the fiscal year ended March 31, 2010, NTN worked tostrengthen compliance by offering new managers textbook-based
self-learning as well as testing compliance awareness through an
online e-learning* course.
*e-learning: Learning using a personal computer.

Help Line Management
NTN has established help lines (internal reporting system) as
part of its compliance framework. All officers and employees of
the NTN Group can use the help lines to report, ask questions
and get advice directly from help desks inside and outside theorganization without going through organizational channels ifthey discover or foresee any actions that contravene or may
contravene the law, the Business Code of Conduct, or our internal
rules. We also take the utmost care to protect user confidentiality
and to ensure that users are not penalized. These help lines havebeen opened to our suppliers.

Compliance Management System

Dealing With a New Influenza Strain
NTN quickly established a central task force in May 2009 following
the worldwide outbreak in April 2009 of a new strain of influenza.
We also set up a database of measures to combat the new
influenza strain on our intranet and integrated managementof information about contagion at each of our bases. Other
countermeasures we implemented in a timely manner included
providing information on methods to prevent the spread of thedisease and imposing restrictions of coming to work if infected.
In addition, at 20 locations, including employees’ entrancesand reception areas, we installed thermographic equipment todetect visitors and employees with temperatures as a means ofpreventing the spread of the disease within the company.
In another initiative, we put in place a system to enable
managers and other
employees to work fromhome in the event that the
spread of a virulent form of
the disease made it difficult
to come to the office.

This thermographic measuring device waspart of our efforts to combat the new strain
of influenza.

Risk Management System
Board of Directors

Spearheads
compliance-related initiatives

Manages the Help Line

Chief Management Officer

Chief Management Officer(Director in charge of CSR
Management Department)(Director in charge of
the Legal Department)

Chief Management Officer(Director in charge of risk management)

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

CSR
Committee

Office(CSR Dept.)

Legal
Department

Risk Management
Department

Emergency Management
Department(CSR Department)(General Affairs Department)

Emergency
Management
CenterPromoting Department

Compliance Subcommittee

Risk Management Approach
CSR
Management
Department

Legal
Department

Personnel
Department

Internal
Help Desk

External
Help Desk

Preventative
measures

Person in charge of managing
emergency information

Risk management planning
Creation and implementation of
measures to address risk

CSR managers
Persons in chargeof CSR

Corporate
Philosophy

NTN Group company employees

CSR Policy

Employee Codeof Conduct

Business Codeof Conduct

Emergency
measures

Evaluation of measures toaddress risk
Evaluation of effectivenessof risk management

An incident occurs
Determining
the level
Establishment ofcentral task force
and response

Response by
department
in charge

Measures toprevent recurrence

NTN Re port 201012

Intellectual Property Strategy“In-depth Cultivation of Core Technologies”
and “Mutually Complementary Collaboration”
The NTN Group is engaging in speedy development of newtechnology and product development by reinforcing efforts tocreate high value-added products and modules through in-depth
cultivation of core technologies and collaboration with companies
from other industries, academic and government organizations,and industrial clusters in Japan and abroad (open innovation).
Above all, to contribute to environmental protection and energy
conservation, we are devoting efforts to the pursuit of low friction
and product modularization using sensors.
We will strengthen our unique products in growth fields suchas aircraft, medical equipment, and wind power generation. In
the aircraft sector, we are involved in projects to develop nextgeneration jet engines. In the medical equipment sector, weare developing leading-edge technologies in collaborations
among industry, academia, and government, industry (medical
engineering), including magnetically-suspended bearings for
artificial hearts and a surgical support system for cerebral
aneurysm coil embolization support apparatus. In the field of wind

power generation, we are developing technologies to support
ultra-large ocean-based wind power systems.
In the area of elemental technologies, NTN is involved in
the research and development of new hybrid bearings andcomposite materials (tribological materials) that integrate our coretechnologies in powder-related fields including tribology*, metalmaterials, surface modification, sintered alloys, plastics, andceramics.
In the automotive sector, we are reinforcing our response toneeds for fuel economy and CO2 emissions reduction and fornext-generation HEVs (hybrid electric vehicles) as well as EVs(electric vehicles) and pursuing product development that takes
into account increasing demand in developing countries. We willcontinue to pursue size and weight reductions and low torquein axle bearings and constant-velocity joints and carry on with
development of modular products, such as Intelligent In-Wheel
units for EVs and electric actuator units.
*Tribology: A science and technology that includes the study and application of
mechanisms of friction, wear and lubrication.

Technology Tree for Tribology

Global environment
New energy

Electric vehicles
and motorization

Monitoring

EV power modules
Intelligent In-Wheel
Electric brakes
Electric actuator units

CVJs

Actuator ball screws
Auto-tensioners

Hub joints

Torque diodes

Bearings fornext-generation jet engines

Lower friction(lower torque)

Materials

R&D Center for Elemental
Technologies (Kuwana)

Forging

Tribology

Lubricating

Lathe turning

Coating & surface improving

Polishing
Joining

NTN Report 2010

Precisionequipment

Mechatronics

Integrated R&D Center (Iwata)

13

Medicalequipment

XY table for liquid-crystal andsolar energy panels
Liquid-crystal repair equipment
Parts feeders

Ultra-high-speeds &special environments

DesignAircraft

Treatment assistance equipment
for cerebral arteries
Bearings for CT scanners

Longer working life
(higher reliability)

Processing

Construction
machinery

Bearings with sensor

More lightweight &more compact

Mechanical lash adjusters

Axle units

Rolling stock

Abnormality detection

Automobiles

Bearings

Wind power

Ultra-large bearings

Sensing

MetalsCeramics(Rotation, load, angle, remotemonitoring, wireless communication)

Analysis
OilingEngineering plastics
Evaluation

Greasing

Powder metals

Measurement

“Reinforcement of the Global TechnicalDevelopment System (4 Worldwide Bases)”In April 2010, we began construction of the “NTN China TechnicalCenter” (in Shanghai). Completion of the new center will result in a

global technology development system centered on development
bases in four locations: Japan, the Americas, Europe, andChina. We will take full advantage of this system to strengthen
the technical services we provide customers in growth markets,
including locally based, self-contained services.
Management

Global Technical Development System (4 Worldwide Bases)
Strengthen technical services for customers in growth markets,and strengthen local capabilities

Japan
Research

Development• Design data
• Testing data
• Experimental data
• Production technology
data• Customer-projectdata

EuropeShare database

Design andevaluation
testingThe
AmericasTechnologicalapplications

China

Receipt of the Commendation for Science andTechnology by the Minister of Education, Culture,
Sports, Science and Technology

Receipt of the Gold Prize for Excellence ina Dissertation of the Japanese Society for
NeuroEndovascular Therapy

Mr. Chikara Ohki, a supervisor at the Elemental Technology R&D
Center, received the 2010 Commendation for Science and Technology
by the Minister of Education, Culture, Sports, Science and Technology
for development of a high-performance bearing with enhanced crystal
grain refinement, which isused mainly in automobile
engines and dynamic valve
mechanisms.

Mr. Yoshitaka Nagano, a project
manager in the Mechatronics
Research Department of the New
Product Development R&D Center,received the Gold Prize for Excellencein a Dissertation of the JapaneseSociety for NeuroEndovascular
Therapy for a thesis on thedevelopment of a “Sensing systemfor cerebral aneurysm treatment”
published jointly with representativesof the university that jointly developed
the system.

Chairman Suzuki Awarded Honorary Doctorate by the Nagoya
Institute of Technology
Chairman Yasunobu Suzuki has been awarded an “honorary doctorate” by the Nagoya
Institute of Technology, his alma mater. Since joining NTN, Mr. Suzuki has worked tostrengthen the development of products, equipment and marketing as well as significantly
contributing to the expansion of overseas business through his experience in production,
production technology and quality control. The Institute has recognized these achievementsin their contribution to the development of human resources and educational research at
the Institute. At the school’s recent entrance ceremony, Chairman Suzuki delivered a wellreceived address that touched on his broad range of experience.
Award ceremony: Mr. Takahashi, head of
the Nagoya Institute of Technology (left) and
Chairman Suzuki

NTN Re port 201014

Feature 1

NTN Advances Hand in Hand with “MONOZUKURI”

The history of NTN is the history of “MONOZUKURI” (manufacturing). Over the years
we have constantly worked to develop new technologies and products to benefit
society and support people’s way of life. Through this commitment, engrained in ourDNA, we are blazing a path to the future.
NTN’s corporate philosophy is “We shall contribute to international society through creating
new technologies and developing new products.” It is our goal and our duty to contribute to therealization of a more comfortable, safer, more efficient society and support and enrich people’sFirst Japanese-made civilian aircraft

lives through our business activities.
Since its founding, the Company has maintained an uncompromising commitment toexcellence in “MONOZUKURI.” This is because we believe that achievement of our corporate
philosophy and business goals and fulfillment of our social responsibility hinges on the strong
desire to create products and provide services that make the most of unique technologies andthat the impetus for this is “MONOZUKURI.”
Bearings, NTN’s mainstay product, are used in wide-ranging industrial sectors, including
aerospace, automobiles, industrial machinery, medical equipment, and precision equipment,
and we support and enrich people’s lives with a diverse range of products. What makes thispossible is the spirit of “MONOZUKURI” that has been handed down through the years as NTN’sFirst Shinkansen

corporate DNA. The source of NTN’s excellence in “MONOZUKURI” is a corporate culture ofdevising and pursuing solutions to meet the needs of society.
This spirit of “MONOZUKURI” has been passed on from generation to generation by meansof original “MONOZUKURI” (personnel development) initiatives such as the Meister System andSkill Training programs. Through the “spirit of MONOZUKURI,” the unbroken tradition at the heartof our business activities, NTN is enhancing its growth potential as a company and increasing
comfort, safety, and efficiency in society.

NTN Advances Hand in Hand with
“MONOZUKURI”

Journal bearing for
Shinkansen*

15

NTN Report 2010

Use in the Shinkansen, the world’s fastest train

The history of NTN began with the pure and simple pursuitof “MONOZUKURI.” In 1918, the founders began research
into the production of ball bearings out of the strong desire
to produce in Japan an important product that was only
obtainable through import at the time. After purchasing
three grinding machines and continuously engaging in test
production of bearings, in 1923 they began the manufactureand sale of bearings under the NTN brand name.

NTN bearings also played a major role in the success of the
Shinkansen bullet trains that became a symbol of Japan’s higheconomic growth. NTN participated from the very start in 1958 ofdevelopment of the 0 series, the first Shinkansen trains, and ourbearings contributed to the high degree of safety necessary toachieve the first-ever commercial operation at speeds exceeding
200 kilometers per hour. The proven reliability that resulted fromthat success has been acclaimed in Japan and overseas and has
contributed to increased worldwide demand for NTN bearings forrolling stock.

A major contribution to Japan's industrial
development
The bearings that the company developed and began to sellmade a major contribution to Japan’s industrial development,
which resulted in their recommendation in 1930 as an excellent
Japanese product selected by the Ministry of Industry andCommerce. In this way, the company won recognition
for technologies and products worthy of government
encouragement for their promotion and development ofindustry in Japan.

NTN bearings link Tokyo and London
In 1937, the first Japanese-made civilian aircraft flew some
15,000 kilometers between Tokyo and London. The plane’s
engines and fuselage were equipped with NTN bearings. The
bearings that made possible the long flight were highly rated
for reliability, and this accomplishment provided the momentum
for the company to establish a solid position in the aircraftbearing market.

The first company to receive the Deming PrizeNTN continued to steadily evolve its “MONOZUKURI” during
the post-war period of high economic growth and in 1954
became the first private-sector company to receive theDeming Prize. The Deming Prize is awarded to private-sector
organizations and individuals that have made outstanding
contributions to the advancement of total quality management.
The prestigious award was evidence of the high reliability of thequality of NTN products.

Management

It all began with R&D to produce Japan's bearings

Overcoming harsh conditions to blast off into space
NTN’s “MONOZUKURI” extends even into the unforgiving realm of
space. In response to the start of the National Space Development
Agency-led project to develop the first all-Japanese rocket, in 1974
the Company began development of engine turbopump bearings.
NTN boldly accepted and accomplished the incredibly difficult
mission of developing bearings to enable approximately 42,000
revolutions per minute in the extreme cold of minus 253°C. As aresult, a rocket equipped with NTN bearings thundered into space.
Currently, NTN supplies all the bearings for the turbopump, an
indispensable part of the Japanese rocket’s engine.

“MONOZUKURI” continues to evolve in the medical
equipment sector.
The medical equipment sector is another challenging arena in which
NTN’s “MONOZUKURI” continues to evolve. We developed bearings
for the high-speed CT (computer tomography) scanners used in
the CT scanning systems essential to the diagnosis of diseases.
We have engaged in R&D of magnetically-suspended bearings
for artificial hearts (a joint development with Kyoto University andTerumo Corporation) since the 1990s, and an artificial heart equippedwith NTN bearings went on sale in Europe in 2007. Other NTN“MONOZUKURI” projects are the focus of attention and expectations
on the frontlines of medical practice around the world, notably thedevelopment in 2010 of a surgical support system for cerebral
aneurysm coil embolization support apparatus (a joint developmentwith the Nagoya Institute of Technology and Nagoya University).

©JAXA

Rocket engine turbo-pumpbearings*

High-speed bearing for CT
scanners*Photos are cross-sectional models of products.

NTN Re port 201016

Feature 2

Takes Maximum Advantage
Technology Fusion and Development Thatof Group Synergies

Not content with the advanced technological capabilities developed heretofore, NTN
is creating products that will continue to benefit society into the future by pursuing
the fusion and development of technologies that take maximum advantage of Groupsynergies.
NTN has continuously improved its friction and wear technologies, known as tribology
technology, and engaged in research in areas including new materials, measurement technologies,
and processing technologies. Our technological capabilities and research capabilities are highly
regarded within Japan and beyond, and we are steadily expanding the scope of our businessactivities. However, to be a company that continuously creates products that will benefit society
into the future, we must constantly move forward with technical development throughout the Group.
This is NTN’s obligation to society. In April 2008, a French bearing manufacturer that is a global
leader in sensor technologies joined the NTN Group, and synergies are steadily being created as aresult of the fusion of technologies.
Uniqueness and high creativity are necessary for continued technological development, and wemust constantly undertake new product development. To that end, our R&D centers must not only
collaborate with other Group organizations, but also engage in R&D involving collaboration withexternal organizations in wide-ranging fields, including face-to-face discussions with customer R&D
organizations and collaboration with universities and research institutes. Furthermore, we actively
SNR Headquarters

participate in our customers’ new product development. In this way, we constantly take on new
challenges in a variety of fields.
Challenges such as these provide impetus for technology development at NTN in various sectors,
including automobiles, rolling stock, medical equipment, space, and industrial robots and have led
to the development of technologies in the new energy sector, notably wind power generation.
By successfully fusing technologies in these various market sectors and business fields, NTN willseek further expansion of the scope of its business activities and further technology development.

Technology Fusion and Development
That Takes Maximum Advantage of Group Synergies
Jointly developed by
NTN and SNR

Mie Prefecture,
Japan
Advanced materials cluster andmechatronic technologies
cluster in Mie Prefecture in Japan

Integrating knowledge andforming networks

Industrial cluster in
Annecy region in France

Accelerating innovations
from automobile applications
to wind power generation, railroads,
construction machinery, etc.

A meeting at SNR

17

NTN Report 2010

A French high-speed train(TGV)Safer automobile society made possible byenhanced vehicle control

New product development throughcollaboration between NTN and SNR
Automotive wheel bearings have built-in wheel rotary
sensors for vehicle control. Enhancement of therotational signals (making them more high resolution)
makes possible more minute vehicle control. To
accomplish this, in 2007 NTN developed jointly with
SNR a “Hub bearings with high resolution rotational
sensors.” However, the bearing entailed a problem
of increased burden on data processing capacity athigh speeds. A “Wide-range high-resolution small
sensor integrated hub bearing,” again developed
jointly with SNR, solved this problem.
This product outputs two types of signal:
conventional ABS signals and high-resolution
signals. This has made it possible to implement
optimal control in the low and medium driving speed
range by using high-resolution signals to detectvery small movements of the vehicle and to reducethe burden on data processing capacity in the highdriving speed range by using conventional ABS

From collaboration between companies tocollaboration between regions
Collaboration between NTN and SNR has givenrise not only to a fusion of the technologies of thetwo companies, but also cross-border industrial
collaboration between regions. Annecy in France,
where SNR has its headquarters, is the center of amechatronics industry cluster. Mie Prefecture, where
NTN’s Kuwana Works is located, is home to facilities
of many companies in the advanced materials andmechatronics industries.
Collaboration between NTN and SNR has
provided impetus for the governments of the tworegions to conclude an industrial cooperationagreement for the purpose of strengthening theirrespective industries and pursuing full-scale activities
for knowledge merging and network creation. In
this way, the cooperation between NTN and SNR
has developed into an international collaborative
effort among industry, academia, and government
involving not only the participation of regional andlocal governments, but also Mie University, Savoie
University, and other interested parties.

Aspiring to construct a global researchtechnology system
To further progress the fusion of technology, NTN
aims to expand its technology development systembeyond Japan, the U.S., and Europe and construct
a global system for technology development rooted
in the markets we serve. As part of this strategy,
in 2011 we will start operation of the NTN China
Technology Center in Shanghai.

Management

The “Wide-range high-resolution small sensor
integrated hub bearing” with a developed jointly
by NTN and SNR has attracted the attention of
automakers from around the world as a product that
contributes to the enhancement of vehicle safetycontrol. NTN and SNR will continue to pioneer
the development of products that contribute to
the enhancement of vehicle control and expand
the scope of joint research and development byengaging in projects in the areas of wind power
generation and rolling stock.

signals. Also, we have secured flexibility in mounting
the bearing on the automobile body by reducing thesize of the integrated circuit in the sensor to permit
compact mounting in small spaces.

Wide-range high-resolution
small sensor integrated hub
bearing

Signing of the cluster collaborationagreement:
From left to right,
Ambassador to France Yasuo Saito,
NTN Chairman Yasunobu Suzuki,
Mayor of Annecy Jean-Luc Rigaut,
Governor of Mie Prefecture
Akihiko Noro,
President of the French National
Assembly Bernard Accoyer

Annec
ecy
Haute-Sa-S
Franc

Joint work with SNR engineers has
broadened the scope of technology.
Supervisor, Axle Unit Engineering Dept.
Automotive Business Headquarters

Takayuki Norimatsu
Combining the strengths of the two companies, SNR’s sensor technologies and
NTN’s bearing mounting technologies, made possible the development of a new
product that can contribute to the enhancement of automobile vehicle safety andcontrol. As electric vehicles come into widespread use, expanded application ofthis product to more sophisticated vehicle control systems can be expected. We
will continue to develop products to satisfy a variety of customer needs throughcollaboration between the two companies

We seek further growth throughcollaboration with NTN.
Application Engineer, Axle Unit Group
Automotive Engineering Dept.
SNR ROULEMENTS

Cedric Gavard
This new sensor technology was born of the joint development work conductedby NTN and SNR. This technology is not only contributing to existing businesses
but also to vehicle control systems (such as low-speed detection and parking
assistance). Going forward, this alliance between the two companies will enable us
to develop products that provide new possibilities to our customers.

©SNR/GraphicObsession

NTN Re port 201018

Feature 3

The Development of Eco-Products

NTN considers coexistence with the global environment to be of the utmost
importance and engages in the development of eco-products that takeadvantage of our unique advanced technological capabilities. The ecofriendly products developed as a result of this effort have further expanded
our business activities into high-growth environmental businesses and aresupporting progress toward a sustainable society.
NTN has established the NTN Environmental Policy, under which we engage inconcrete activities in four areas: 1) Development and sales of environmentally friendly
products, 2) Reduction of environmental impact, 3) Observance of laws and regulations
and implementation of thorough environmental management systems, and 4) Activities
to contribute to society and protect the natural environment. Above all, we have actively
engaged in the development and sales of eco-products.
Wind power station at Rokkashomura
in Aomori prefecture

Bearings, NTN’s mainstay product, support the rotating parts of all types of machinery.
Rotation in machinery entails energy loss from friction. NTN is taking advantage ofadvanced technologies developed over the years to engage in the research anddevelopment of eco-products that reduce energy loss. The development of eco-products
requires shape improvement in product design as well as the development of newmaterials. NTN actively pursues the development of leading-edge technologies to solvethese problems and continues to make progress toward our goal of realizing a sustainable
society.
The scope of application of NTN’s eco-products is also expanding. Eco-products wehave developed are used for wind power generators that make use of natural energy
and for rolling stock, a form of clean transportation. NTN will continue to actively pursue
the R&D of eco-products that benefit society and increase our presence in eco-friendly

Main shaft bearing forwind power turbines*

business fields.

*Photo is cross-sectional model of product.

The Development of Eco-Products

19

NTN Report 2010

The automotive market is on the cusp of a sweeping transformation to be brought about by next-generation
automobiles designed to reduce CO2 emissions. Prior to the full-scale dissemination of Electric Vehicles (EVs), NTN
is applying its unique mechatronics and tribology technologies to develop modular products for EVs and electromotorization.

A solution made possible by unique NTN
technologies

EVs are attracting attention as a means of
mitigating global warming. Since EVs are powered
only by electricity stored in batteries, they makeit possible to sharply reduce CO2 emissions fromthe level of conventional gasoline engine vehicles,
even including emissions at the time of power
generation.
Drive methods used for EVs can be broadly
divided into two mechanisms: the “in-wheel motor
method” and the “one-motor method.” The onemotor method involves installing a single motorin the vehicle body to replace the conventional
engine, while the in-wheel motor method involves
installing a motor inside each wheel. The in-wheel
motor method offers two tremendous advantages
over the one-motor method: 1) dramaticallyincreased degrees of freedom in vehicle design
owing to flexibility in securing passenger cabin
space and 2) increased vehicle safety due to thepossibility of individually controlling the driving
force of each wheel. Accordingly, automobiles that
use the in-wheel motor method are considered theultimate in EVs.
NTN has engaged in the development of
products for in-wheel motors since 2003,
applying technologies developed in the hub
bearings business. Major challenges involved indevelopment were vehicle stability and comfort
improvement and weight reduction to increase thetravel distance per battery charge.

First, we developed a concept for weight reduction
involving an original design for a combination of a
motor, speed reducer, and hub bearing, an effort
that culminated with the unveiling in 2005 of the“in-wheel motor axle unit” at the Tokyo Motor
Show. We subsequently continued development
and in 2010 succeeded in developing the world’s
lightest weight unit, which has made it possible topower two wheels of a compact car and achievea maximum speed of 150 km/h and endurance
distance of 300,000 km.

In-wheel motor(High-accuracy magnetic
angle sensor is integrated)

Management

Pinning hopes for global warming
alleviation on EVs

Modular products for EVs

Planetary roller screw typeelectric brake actuator

The Intelligent In-Wheel will change theconcept of automobiles
In 2010 NTN announced the “intelligent in-wheel”,
which combines in a compact assembly the “inwheel motor axle unit” and “electromechanicalbrakes and a multi-axis load sensor” developedin parallel with the motor axle unit. By optimally
implementing regenerative control of the inwheel motor and electromechanical brakes inaccordance with the load applied to the wheels,
the intelligent in-wheel dramatically increases fuelefficiency (electricity charges) and safety during
vehicle operation.
The “intelligent in-wheel,” developed in keepingwith NTN’s environmental mission through thefusion of core technologies, will dramaticallychange the concept of automobiles and mark an
important new step toward coexistence with theenvironment.

Electric actuator unit

In-Wheel Motor method
Internal drive motor in each wheel

Enables lateral and circular motion

Multi-axis load sensor

Electromechanical brakeSteering wheel angle

Intelligent In-Wheel

Accelerator angle

Tire load
Steering angle
Brake force

Traction

Cornering force

Sensor data used foradvanced vehicle control
NTN Re port 201020

Business

At a Glance

Bearings

Constant-Velocity Joints

Precision Equipment
and Other Products

Major products

Major products

Major products

Ball bearings
Roller bearings
Axle bearings
Bearing units
Large bearings
Precision bearings
Hydrodynamic bearings
Sliding bearings
Other bearings

Automotive CVJs
(for halfshafts, propeller
shafts, and steering shafts)
CVJs for industrial machinery

LCD repair devices
PDP rib barrier defect repair system
Parts feeders
XY tables
Magnetic-bearing spindles
Auto-tensioners
Engineering plastics parts
Machines, apparatus,and others

Net sales share

Net sales share

Net sales share

25.6%

5.0%

Year ended March 31, 2010

Year ended March 31, 2010

69.4%

Year ended March 31, 2010

Net sales

Net sales

Net sales（Billions of yen）

（Billions of yen）

（Billions of yen）

376.4

165.1

338.5

30.5

314.3
124.4

21

26.3
115.7

22.8

2008 2009 20102008 2009 20102008 2009 2010

Years ended March 31

Years ended March 31

Years ended March 31

NTN Report 2010

Bearings
Bearings underpin the rotating parts of many types ofmachinery and are used in a wide range of industrial fields,
ranging from aerospace applications to automobiles,
industrial machinery and precision machinery. Bearings
themselves are an environmentally friendly product in thatthey curtail energy consumption by reducing friction. In
fact, they are contributing to the preservation of the global
environment by their involvement, for example, in the
expanding use of wind power systems, in thedevelopment of railways, which are environmentallyfriendly, and in progress in medical technology.

Business

Review of Operations
During the fiscal year under review the NTN Group’s net sales ofbearings declined ¥62.1 billion, or 16.5%, to ¥314.3 billion.
In applications for general industrial machinery, there weresome signs of brightness, including increases in sales for rollingstock applications in Europe and China, for aircraft in Europe,and for construction machinery in China and the Asian region.
However, worldwide demand dwindled, with demand declining
especially for construction machinery, machine tools andagricultural machinery in Japan, the Americas and Europe.
Together with the impact of unfavorable foreign exchange rates
and other factors, net sales decreased. Moreover, aftermarket/
distributor sales declined due to prolonged inventory adjustment
in distributors.
In automotive applications, sales were increased by recoveryof customer demand and the start of volume production of new
products in China and the Asian region. However, overall sales
fell mainly due to the impact of unfavorable foreign exchange
rates and a decrease in demand in Japan.
In Japan, sales in both general industrial machinery andautomotive applications dropped mainly due to declines in overall
demand and the export business, although sales of large
bearings for repairs increased. As a result, net sales in the region
decreased ¥27.7 billion, or 22.1%, from a year earlier to ¥97.8
billion.

Total Bearing Sales

NTN’s Share ofJapanese Market(No. 2 in Japan)

Billions of yen

376.4
338.5

28%

66.5

314.3

67.2
63.1
54.2

116.0

Year ended March 31, 2010

100.5
75.3

(No. 3 in the world)

68.2
52.9
141.8

2008

125.6

2009

NTN’s Share of
Global Market

12%

97.8

2010

Years ended March 31

In the Americas, sales in both general industrial machinery andautomotive applications fell due to declines in demand especiallyfor bearings for construction machinery, reduced production byautomakers and unfavorable foreign exchange rates. As a result,net sales in the region decreased ¥15.3 billion, or 22.4 %, from ayear earlier to ¥52.9 billion.
In Europe, sales in both general industrial machinery andautomotive applications fell due to unfavorable foreign exchange
rates and declines in demand especially for bearings for
agricultural machinery, although sales of CVJs increased mainly
due to recovery of customer demand and the start of volume
production of new products for automobiles. Against thisbackdrop, net sales in the region decreased ¥15.6 billion, or
13.4%, year on year to ¥100.5 billion yen.
In Asia and other areas, sales in automotive applications
increased in China and other areas of the Asian region mainly due
to recovery of customer demand and the start of volume
production of new products. However, sales in general industrial
machinery applications fell in both China and other areas of the
Asian region mainly due to decreased sales of fluid dynamic
bearings resulting from the dissolution of a joint venture (NTNNIDEC (THAILAND) CO., LTD. and NTN-NIDEC (ZHEJIANG)
CORP.), and to the impact of unfavorable foreign exchange rates.
As a result, sales in this region decreased ¥3.4 billion, or 5.1%,
year on year to ¥63.1 billion.

TOPICS
Integrated production of ultra-large
bearings at NTN Houdatsushimizu
In response to growing demand worldwide for ultra-large
bearings, in October 2009 we completed construction of NTN
Houdatsushimizu Corporation in the Noto district of Ishikawa
Prefecture, and started production of ultra-large bearings, thelargest ever for the NTN Group. Our integrated production ofhigh-precision high-quality ultra-large bearings centered on
applications for wind
power systems
encompasses all theprocesses from lathe
turning and heat
treatment to polishing
and assembly.

Year ended March 31, 2010
(NTN’s estimates)

Japan

Americas

NTN Re port 201022

Business

Bearings for Industrial Machinery©SNR/Graphic Obsession

AircraftRolling Stock

NTN provides the bearings used in the extremely high-precision,
high-rotative-speed axial engines of aircraft on a global basis, andhas earned the deep trust of major global aircraft engine
manufacturers and other aircraft-related manufacturers in Japanand around the world. In response to environmental issues,recently there has been increasing demand from all aircraft
manufacturers to update their aircraft to new models with better
efficiency, and to reduce size. In tandem, demand for aircraftbearings is expected to increase significantly in the future.

Aircraft bearings

Journal bearing for
Shinkansen*

Wind Power Systems

Main shaft bearing
for wind power turbine*

NTN Report 2010

Journal bearing for France’s
TGV train*

Machine Tools

NTN manufactures and sells the full range of bearings used forthe main shaft, speed controls, generators and other parts foundin wind power systems. There has been a global spread ofdemand for wind powersystems, because they can
supply clean energy free of CO2
emissions. In particular, theCompany has established astrong reputation among wind
power turbine manufacturers
for its role in ensuring thereliability and long working
lifetimes of our products.

23

The NTN Group is manufacturing the primary spindle bearings
used in Japan’s N700 series Shinkansen and France’s TGV train.
Everywhere, special management systems are being developed
to preserve and improve the quality of parts and components forrolling stock, since even small defects in the rail cars used totransport large amounts of people and cargo at high speeds
could result in catastrophic damage. As regards global
environmental issues, the railways are attracting attention as ameans of mass transportation that consumes less energy.
Demand for rolling stock is rising worldwide, especially in Europe
and China.

NTN manufactures and sells the bearings used in the primary
spindles of machine tools. Because of the advanced functionalityof machine tools, these bearings used in the primary spindle musthave higher precision and rotation speeds. To meet theserequirements, we supply products to our customers with theperformance and quality they need by providing input to major
manufacturers from the initial development stages. Furthermore,
our R&D activities are centered on the pursuit of the best bearings
imaginable. The technologies built up in the process underpin theevolution of NTN’s development of products for other industrial
machinery and automobiles.

Bearings for machine tools**Photos are cross-sectional models of products.

Construction Machinery

NTN manufactures bearings for medical equipment whichsafeguards human life. In today’s medical field, where
sophisticated diagnosis is a must, there is a demand for further
advancement in CT scanners to enable them to accurately scan
images of affected areas of patients. At the same time, there is ademand to improve QOL (Quality Of Life) to lighten patients’burdens. Our bearings for high-speed CT scanners have enabledthese diagnostic devices to scan
accurate images more quickly andquietly. Shorter diagnosis times, in turn,make it easier to use CT scanners fordiagnosing children and the elderly, forwhom such tests can be particularly
taxing, thereby significantly improving
their QOL.

Business

NTN manufactures the large bearings used in large dump trucks
and other construction machinery. At construction sites, including
those associated with mining, which is especially active inemerging nations, and with urban development, large dump
trucks and other construction machinery are indispensable fortransporting large amounts of soil, sand and gravel, and work
materials at a time. Many of NTN’s large bearings are used in thewheels and drive components of these machines, where they
support these transportation capabilities.

Medical Equipment

Low-vibration bearing for
CT Scanners

Construction machinery bearings

New Products
Commercialization of world's smallest
bore hydrodynamic bearing

Hydrodynamic Bearings
NTN manufactures the hydrodynamic bearings used mainly in thespindle motor sections of hard disk drives (HDDs). HDDs arefound inside personal computers, digital video cameras, carnavigation systems and other devices, and their uses are
increasing along with the spread of digitalization. In recent years,
HDDs have high levels of storage capacity, and hydrodynamic
bearings are being used in the HDD motor sections because they
wobble less than ball bearings. Our hydrodynamic bearings use
oil-impregnated sintered bearings inside, and so, compared withthe metal sleeve-type bearings of other companies, they are able
to avoid the accidental phenomena of etching. As a result, ourbearings also offer real benefits from the perspective of quiet
environmental characteristics, volume press production and good
cost competitiveness.

NTN has succeeded in commercializing the world’s smallest
bore hydrodynamic bearing with a shaft diameter of 0.6 mm byusing the precise copying characteristics of electrocasting, akind of electroplating, to form a dynamic groove in the bearing’s
surface and combining it with plastic injection molding
technologies. NTN is currently manufacturing hydrodynamic
Beaphites, which has won the trust of customers. As a result,sales have been growing, especially for applications in spindle
motors and fan motors for HDDs. At the same time, the small
fan motors built into mobile devices, for which demand isanticipated to expand, are increasingly required to be madesmaller. To meet this demand, we have commercialized this 0.6
mm hydrodynamic bearing. The manufacturing method used forthis bearing makes possible even smaller bearings: in the future
we aim to commercialize a bearing of 0.3 mm shaft diameter.

0.5 mmComponent parts of fluid
dynamic bearings

NTN Re port 201024

Business

Automobile Bearings
Axle Bearings
Fitted to the wheels of automobiles, axle bearings enable the wheels to turnwhile also bearing the weight of the vehicle body. Thus, axle bearings play anessential role in vehicle movement.
In the pursuit of greater ease of assembly at customer workplaces, NTN has
witnessed the evolution of three generations of axle bearings. As themodularization of axle bearings progresses along with this evolution, we areachieving lighter and more compact products by reducing the number ofcomponents, thereby contributing to improved fuel efficiency.
Together with SNR, which possesses a globally high level of sensor
technology, NTN has a complete lineup of all types of axle bearings, and has
set up a global supply network in Japan, the United States, Europe, and Asia,
including China. Furthermore, the Company has also developed a fourth
generation hub joint (GEN 4 hub joint) as the next generation axle bearing. The
GEN 4 hub joint combines third generation axle bearings with CVJs in one unit.
This highly acclaimed product has been made possible by NTN’s uniqueprowess in bearing and CVJ manufacturing technologies.

Axle Bearing Sales
Billions of yen

90.4

88.4

11.7

12.5

64.0
10.3

37.1

37.2

9.2
22.5

20.2

18.4

22.0

21.4

20.3

2008

2009

2010

Years ended March 31
Japan
EuropeAmericas
Asia and Others

Fourth generation
Unifying third-generation hub bearings with CVJs toachieve a lightweight and compact productPicture=“V Series”

First generation Second generation

Third generation

With sensor*Photos are cross-sectional models of products.

New Products

Ultra lightweight“Multi axis load sensor integrated hub bearing” withworld’s highest level of accuracy
NTN has commercialized a "multi axis load sensor integrated hub bearing" byincorporating a sensor that is capable of detecting a load in all three directions,
thereby controlling vehicle handling with the world's highest level of accuracy.
To improve vehicle control, it is necessary to detect friction force between thetire and road surface to accurately understand the contact condition. In
addition, it is necessary to detect real time road surface signals. Therefore, in2007 we commercialized the "load sensor integrated
hub bearing" with the capability of detecting cornering
force, the most important aspect of vehicle control. In
addition to cornering force, the new "multi axis load
sensor integrated hub bearing" detects driving andbraking force, and vertical direction force, enablingadvanced vehicle control to the world’s highest level ofaccuracy. The operational software algorithm wasdeveloped jointly with SNR, and is one example of thesynergies generated between NTN and SNR.
Vehicle suspension

25

NTN Report 2010

Needle Roller Bearings
Needle Roller Bearing Sales
Billions of yen

50.6

17.4

40.4
34.2
14.7
14.8

33.2
25.7
19.5

2008

2009

Business

The transmission, which is an important part of an automobile, has spaceconservation or high load-bearing capacity requirements. Because of theserequirements, needle roller bearings are used for automobile transmissions.
Needle roller bearings are characterized by their relatively small-diameter,
cylindrical, needle-like rolling elements, and their high load-bearing capacity
and rigidity while at the same time saving space. Needle roller bearings allow
compact and lightweight designs for machinery. Because of these special
features, needle roller bearings are used in many applications for automobiletransmissions.
NTN manufactures its own needle rollers and is strong in press-processed
cages, and this underpins our cost competitiveness and technologicalprowess. Against this backdrop of excellence, NTN has been building a global
supply network, beginning production in Thailand in 1999, in the United Statesin 2000, and in China in 2005.

2010

Years ended March 31
Domestic

Overseas

Various needle roller bearings

TOPICS“Small cross-section thrust needle roller
bearing”
The automatic transmissions of vehicles are becoming
increasingly complex and compact, and the thrust needle roller
bearings used in them are correspondingly required to have asmall cross-section. Our well-designed product line-up
includes bearings with cross-sections as small as 1 mm.

Cross-section height of 1 mm

Automobile automatic transmission

NTN Re port 201026

Business

CVJs for
Propeller Shafts

Constant-Velocity Joints
Constant-velocity joints (CVJs) are parts that transmit
the power of an automobile engine’s rotation smoothly,
efficiently and constantly to the vehicle’s tires. CVJs
enhance the compactness, lightness and highefficiency characteristics of a vehicle, thereby
contributing to the achievement of low fuelconsumption and reduced CO2 emissions, both ofwhich are issues in the automobile industry.

CVJs for
Driveshafts

Review of Operations
During the fiscal year under review, the NTN Group’s net sales of
CVJs declined ¥8.8 billion, or 7.1%, to ¥115.7 billion.
In Japan, sales declined by ¥7.5 billion, or 15.6%, year on yearto ¥40.7 billion, mainly due to declines in overall demand byautomakers and the export business.
In the Americas, sales fell mainly due to reduced production byautomakers and unfavorable foreign exchange rates, despite
recovery in demand by U.S. automakers in the second half of the
fiscal year under review and the start of volume production of new
products. As a result, net sales in the region decreased ¥4.1
billion, or 10.2 %, from a year earlier to ¥36.1 billion. In the U.S.,
we are increasing our production capabilities in response to therecovery of automobile demand.
In Europe, net sales rose ¥1.2 billion, or 5.2%, year on year to¥24.2 billion, due to the contribution of the start of volume
production of new products as well as favorable sales for small
vehicle applications in the second half of the fiscal year underreview. In October 2009, production started at SNR’s plant inRomania.

In China and other areas of the Asian region, demand in China
increased throughout the year and also demand in other areas of
the Asian region increased in the second half of the fiscal year
under review. As a result, net sales increased ¥1.6 billion, or
12.2%, from a year earlier to ¥14.6 billion.

CVJs for
Steering Shafts

Constant-Velocity Joint Sales＊

Billions of yen

165.1
14.9
36.2

124.4
13.1

115.7
14.6

23.1
24.2

59.2
40.2

NTN’s Share ofJapanese Market

NTN’s Share of
Global Market(No. 1 in Japan)(No. 2 in the world)

36.1

23%
54.8

2008

48.1

2009

40.7

44%

2010

Years ended March 31
Japan

27

NTN Report 2010

AmericasYear ended March 31, 2010
Year ended March 31, 2010
(NTN’s estimates)In 1963, NTN was the first company in Japan to start
production of fixed-type constant-velocity joints. After that, weadded other plunging CVJs to our product lineup. We also
attached both fixed and plunging CVJs to a driveshaft and started
supplying these products to automotive manufacturers.
Spurred by the oil shock in 1973, sales of front-wheel-drive
vehicles began to increase as automakers adopted full-fledged
initiatives to achieve fuel efficiency. At the same time, productionof CVJs leaped. Furthermore, the business field of built-in CVJs is
expanding because automotive manufacturers are using CVJs indrive shafts for rear-wheel-drive and in propeller shafts for fourwheel-drive vehicles, to improve the ride characteristics.
Amid this expanding demand for CVJs, NTN has been actively
increasing its production bases worldwide since the 1990s, and is
now engaged in business at 18 manufacturing bases, including in
Brazil.

In recent years, automakers have been tackling the major
development themes of reducing environmental impact andcontributing to greater automobile design freedom, in order todevelop more advanced vehicles. In this context, CVJs also arestrongly required to achieve greater lightness and compactness,and to reduce noise, vibration, and harshness (NVH). Because thefunction and quality of CVJs improve on the performance ofautomobiles, we are required to stay at the forefront of trends inautomobile technology and carry out a variety of specificimprovements.
To meet these needs, we work to fully exhibit the technologicalcapabilities that we have built up over many years, and are
moving ahead with the development of new products andtechnologies.

Business

CVJs for
Propeller Shafts

CVJs for Driveshafts＊

New Products“Lightweight, compact fixed-type CVJ”
exclusively for propeller shafts“Light and high-efficiency drive shaft”
exclusively for rear-wheel-drive cars

NTN has developed a “lightweight, compact fixed-type constantvelocity joint’ for the propeller shafts of rear-wheel-drive (FR) and
four-wheel-drive (4WD) vehicles. Hitherto, CVJs with the design forthe drive shaft changed to a design for the propeller shaft havebeen used for the fixed-type CVJs for the propeller shafts of FR
and 4WD vehicles. However, recently a reduction in weight and anincrease in compactness have been required for propeller shafts toimprove fuel economy. As a result, all parts of the “lightweight,
compact fixed-type CVJ” have been
exclusively designed for propeller shafts,
achieving smallness and compactness while
maintaining the strength and durability of theCVJ.

NTN has developed a “light and high-efficiency drive shaft optimallydesigned for rear-wheel-drive cars”, which is the type of drive used inluxury cars. In recent years, there have been needs for lightness andhigh-efficiency in the drive parts for luxury cars with the aim of achieving
low fuel consumption. Furthermore, to achieve smooth ridecharacteristics, there is a need to reduce the backlash in the rotational
direction of the drive shaft. With this newly developed product, NTN has
been able to make it lighter and more efficient (decreased torque loss)
and reduce the backlash in the rotational
direction by using a drive shaft composed of
two pieces of newly developed slide type,cross-grooved, CVJs and a hollow shaft
inter-connecting the two CVJs.

*Photos are cross-sectional models of products.

NTN Re port 201028

Business

Accumulated Number of CVJs Manufactured
500
millionOctober 2010 (tentative) –Cumulative production
reaches 500 million

2011: Production in Brazil(tentative)

3 years

2007: Development ofhigh cost-performance V series

2007 – Cumulative
production reaches
400 million

400
million2007: Productionin India

Cumulative Production Milestones

300
million2002: First in world tomass produce
low-vibration, PTJ products

4 years

2002: Productionin China

2003 – Cumulative
production reaches
300 million
1998 to 2002: Start ofmass production ofworld’s lightest CVJs
(E series)

1998: Productionin Thailand
1998: Production
in France

200
million1997 – Cumulative
production reaches
200 million
11 years

1989: Productionin the U.S.
100
million

6 years

1986 – Cumulative
production reaches
100 million

1982: Production
at Okayama
1973: Production
at Iwata

23 years

1963: Start ofmass production
at Kuwana

1963 – Production
launched

0
1963

1965

1970

1975

1980

1985

1990

1995

2000

2005

2010 (Fiscal Year)

TOPICS
Establishment of production base for CVJs
in Brazil

implementing local production of CVJs. The establishment of thisnew company in Brazil will strengthen our manufacturing andsales organization in South America, with a focus on Brazil, andboost our competitiveness globally. This new location in Brazil will
be NTN's 18th CVJ production base.

In June 2010, NTN established NTN de Brasil Producao de SemiEixos Ltda., a new company to manufacture and sell CVJs in
Brazil. Amid the anticipated significant growth in demand forautomobiles in Brazil, we have faced the increasing necessity of

Accumulated Number of CVJs Manufactured
NTE

Guangzhou NTN

FranceChina

NTE Crezancy

Beijing NTN-SeohanFranceChina

IFA-AT

Shanghai NTN

Germany

China

NTK

SNR Sibiu
Romania

U.S.A.

Okayama Works

NDI

Japan

U.S.A.

NTN Fukuroi

Seohan-NTN

Japan

U.S.A.

Iwata WorksJapan

TaiwayNNMI

TaiwanIndia

NTN of Brazil Production ofDriveshaft

NMT

BrazilThailandUnidrive
Australia

29

NTN Report 2010

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

Precision Equipment andOther Products Sales

Review of Operations

Billions of yen

Sales of precision equipment and other products during the fiscal year under review declined ¥3.5
billion, or 13.2%, to ¥22.8 billion mainly due to customers curbing capital investment because ofdwindling worldwide demand.
NTN develops products with a variety of high-precision and high-functionality characteristics. These
products include spindles and XY tables centered on semiconductor and electronic equipment
applications, mechatronic products such as LCD repair equipment, and parts feeders used in a variety
of industries such as automobiles and food.

30.5
26.3
22.8

2008

2009

Years ended March 31

2010
GlobalNew Products
Large-type precision
positioning drive unit
Commercialization of“high performance large-type gantry
XY table”
NTN Corporation has commercialized a“high performance large type gantry XY
table.” This product is a gantry type highprecision positioning XY table for large-typework targeted towards manufacturing solar
energy panels, and producing andinspecting flat panel displays. Panel
manufacturers have been using increased
work sizes, such as liquid crystal glass
substrates, and also requiring light weight,
high rigidity and high precision. With this“high performance large-type gantry XY
table,” NTN has achieved light weight, highrigidity and high precision by changing thesteel tubing used and by optimizing thedesign.

Commercialization of“food feeding high speed linear
feeder”

Commercialization of“2 way sorting feeder(bowl type)”

NTN has developed a “food feeding high speed
linear feeder.” This product enables the feedingof a variety of kinds of foods and vibrationabsorbable parts. A conventional linear feeder isa machine designed to feed and supply foods
and parts by vibrating the equipment. However,the feeding of vibration absorbable foods, suchas konnyaku jelly, is not possible. For thesefoods, increased vibration amplitude ofapproximately double size is needed. This newfeeder uses an “amplification spring mechanism“
which provides an increased vibration amplitude
in comparison to the conventional linear feeder.
In addition, by using this amplification springmechanism, the new product maintains thesame power consumption as that of theconventional feeder, thereby contributing tosaving energy.

NTN has commercialized a “2 way sorting
feeder (bowl type).” This new productenables various kinds of part feedings bymeans of the integration of the basic
technology of parts feeders and a new part
feeding mechanism. A parts feeder is a pieceof equipment designed to line up and supply
parts by vibrating the equipment (bowl). For
part feeding, a wide variety of parts feeders
has been needed. In response, NTN has
already commercialized the Mono-drive 2
Way Feeder which not only lines up andsupplies two kinds of parts as a one-bowl
feeder, but is able to offer variable speed
feeding and also to feed parts in the otherdirection. The newly developed “2 way
sorting feeder (bowl type)” combines thisbasic technology with a new feed function to
improve our customers’ production efficiency
and contribute to saving energy.

NTN Re port 201030

Responsibility to Customers

Taking diverse steps to improve quality management andcustomer satisfaction
Enhancing customer satisfaction
Action policy: Further improve customer satisfaction in terms of
QCDDS, which stands for quality, cost, delivery, development,
and service.

Related departments collaborating to boost
customer satisfaction
Our “CSR Policy” pledges that we will strive to develop newtechnologies and new products, as well as to provide safe andreliable products. We seek to fulfill this policy by ensuring that all
related departments collaborate in all stages to boost customer
satisfaction. These endeavors encompass everything fromidentifying customer needs to developing, designing,
manufacturing, and delivering.

Building a customer-driven structure
Customers will trust us only if we strive to identify theirrequirements. Thus at each of our sales offices we assign
dedicated sales staff and sales engineers to customers and sales
agents so that we can respond directly to customer requests andquestions and resolve issues speedily.

Continuing to hold “traveling productexhibitions” and “technical seminars”
We continue to send engineers to customers to hold “travelling
product exhibitions” and “technical seminars” to rigorously
augment information about our products and technologies.

Traveling product exhibition

31

NTN Report 2010

The traveling exhibitions showcase our products and publicize
our technologies and offerings to boost sales and ascertain
customer needs. In fiscal 2009, we held product exhibitions forcustomers in the automotive and industrial machinery sectors at a
total of about 60 companies. The number of product exhibitions
for industrial machinery companies was triple that in fiscal 2008,reflecting our strengthening of business in the “ecological andnew energy” markets such as wind power generation.
Technical seminars showcase our product technologies,
product handling, and other areas. These events deepen
understanding of our technologies and offerings, fostering
technical exchanges with customers and contributing to productdevelopment. In fiscal 2009, we held technical seminars forcustomers in the automotive and industrial machinery sectors at
about 30 companies in total.

Continuing to conduct “customer satisfaction
surveys”
It is important to properly understand customer satisfaction levels
and act accordingly so we can further improve customer
satisfaction. We thus often carry out “customer satisfaction
surveys” related to our products and services.
In fiscal 2009, we conducted a survey of our customers inJapan and overseas. The total number of respondents saying that
our overall performance was “Very good” or “Good” was five
percentage points higher than in fiscal 2008. While averageassessments of our overall performance were basicallyunchanged in fiscal 2009, respondents noted that we need

substantial improvements in four areas, up from one a year earlier.
We therefore formed a special project team to boost quality andset about analyzing root causes to foster tangible and intangible
enhancements to increase customer satisfaction.
The results of this survey, including customer opinions andrequests, are given to the departments affected and are used tocreate even better products and to improve service.

Quality management
Formulating and strictly implementing annual
quality management policies
Quality management is fundamental to “MONOZUKURI” at NTN.
We thus formulated a Basic policy of quality as a “basic concept”
for “MONOZUKURI”, and create annual quality management
policies that prioritize focuses, comprehensively pursuing quality
management.

Quality management system
Effectively deploying and continuously
improving our quality management system
We built, effectively deploy, and continuously improve our quality
management system to manufacture reliable products andimprove customer satisfaction.
We have an ISO 9001 certification for quality management.
Our operating sites in Japan and around the world that produce
automotive products have ISO/ TS16949 certification for quality
management.

Quality Policy Management System
Basic policy of quality(Quality Management
Rule)

Basic policy of quality

FY2009 Period Quality Management Policy
1. Engineering:“Design Determines All”
Initiate the practice of “easy-to-understand design, easy-to-manufacture,and mistake-proof products”(1) Integrate parts variation(2) Verify drawings and production process by the engineers(Collaboration between Quality Assurance Department and Production
Department)(3) Extensive design verification —Verification of global and scientificviewpoints—
2. Production:
Eradication of defects goes and watches on the floor and thestarting point.
(1) Correspondence to production organization
Quality checks involving persons, equipment, systems, andcontinuance of measures(2) Preventative action
Measure irregularities on the floor as the customer complains(3) Prevent recurrence
Implementing countermeasures and improvement of the processassurance level(4) Change control—Observe internal and customer rules—(5) Control of special process—Ending serious customer complaints—(6) Reduce defective product disposal cost rate(7) Improved quality at subcontractors
3. Sales:Improve customer satisfaction and problem solution from
customer's viewpoint
Communicating and understanding customer requirements immediately
4. Logistics:
Perform exhaustive actual activities
Improvement of Logistic Quality (Packing in Plant —Warehouse—
Customer)

Quality
Management policy(Every year)

Director in chargeof Quality

Quality policy for
operating site
General Manager ofoperating site

Meeting of
QA Dept. managers
Quality Management Dept.
CSR

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

President

Action policy ofengineering
department
Managers ofengineering depts.

Quality Policy for
Plant

Quality policy for
QA Dept.

Plant Manager

QA Dept. Manager

We aim to build greater trust byboosting customer satisfaction.
Electric and Office Equipment Project Team
Industrial Business Headquarters

Sim Weisin
We set up business-specific project teams to directly
determine customers’ desires, swiftly conveying thisinformation to the relevant in-house businesses and creating
an integrated system to follow up on everything from designand development to quality, delivery, and sales. We aim tocarry out such activities both in Japan and around the globe.

NTN Re port 201032

Responsibility to Customers

Obtaining IRIS (International Railroad Industry
Standard) certification
In February 2010, NTN became Japan’s first bearing
manufacturer to obtain certification under the International
Railroad Industry Standard (IRIS), the quality standard for theEuropean railway industry. This achievement complements thequality management system certification of the Association ofAmerican Railroads that we received in 2003, underscoring ourhigh quality as a supplier to the rail industry. IRIS certification has
been a prerequisite for railroad-related transactions since April
2010, and should help us
increase sales.
Railroad bearings mustsatisfy extraordinarily highsafety requirements, so we
maintain quality
management systems andeven more stringent quality
management levels in this
IRIS registration certificate
area.

Efforts related to sales agents
Collaborating with sales agents to improvecustomer satisfaction
We collaborate with agents selling our products in efforts toimprove customer satisfaction.
Every year, we deepen ties by holding an annual meeting of
our Domestic Sales Agent Association, sales agent and sales
engineering seminars, plant tours, and joint seminars and productexhibitions with sales agents at customer locations.
Whenever we put a new product on the market, we hold ameeting to explain our technologies and products to the sales
agents that sell our products. Also, we periodically hold training
sessions for new and mid-level employees of our agents.
We will continue to reinforce our sales engineers at NTN and tohelp our sales agents expand sales and gain new orders.

Helping suppliers improve quality
We work with suppliers to improve quality through our “Supplierquality improvement meeting,” quality audit, and other activities.
At this annual quality improvement meeting, each supplierpresents examples of improvements and attends presentations byexternal speakers, thus sharing knowledge and know-how toraise awareness of quality improvement issues.
The quality audit checks the quality assurance systems ofsuppliers. Based on our proprietary check sheet, we conductongoing assessments of quality systems, confirm process
management and progress with measures to prevent recurrencesof defective deliveries, and take other steps to help suppliers
enhance quality.

Meeting of our Domestic Sales Agent Association

Number of seminars for sales agents in fiscal 2009
Initiative

Communicating with customers

Number ofgatherings

Sales agent and sales engineering seminars

35

Technical seminars

17

Training sessions for new employees of agents

9

Rapidly responding to questions
When there is a question from a customer, we respond throughour sales offices or website.
When there is a question from a customer to any of our sales
offices, the people in charge respond and are able to visit thecustomer immediately if needed. Questions received via our
website are all reviewed by the Head Office, and are then handled
by a member of our sales staff or a sales engineer at one of oursales offices.
Depending on the nature of the request or matter, the person
in charge then gives the customer a phone call, sends
information, or visits the customer if necessary. The information
obtained through further communication with the customer ispassed to the relevant department and is then used later inproduct R&D.

33

NTN Report 2010

Meeting weekly with relatedparties to secure IRIS
certification in one year.
Manager, Quality Control Section,
Quality Assurance Dept., Kuwana Works

Kazuo Nishio
The process of obtaining IRIS certification was very
challenging. We had to interpret a requirements specifications
document that contained complex English-language phrases.
Right after we completed our IRIS quality manual, there weremajor additions to the requirements specifications, so we had
to rush to make amendments before the assessment.
Meeting this tough challenge made our joy at obtaining
certification all the more satisfying. We plan to further improve
our quality assurance system for IRIS certification renewals.

Responsibility to Suppliers

Strengthening our system of cooperative progress withstrategic partners
Procurement Policy

Maintaining fair and appropriate relationships

Procuring from strategic partners

Ensuring fair subcontractor dealings

Suppliers who (1) have strengths in technology and quality, (2)who want to expand overseas, and (3) who are able to jointly
spearhead efforts to increase corporate value are considered to
be strategic partners.

We take thorough steps to ensure fair subcontractor dealings.
The Subcontractor Act applies to approximately 80% (by count)of our suppliers, and we consider it essential that suppliers fulfill
their responsibility for dealing fairly with their subcontractors.
We therefore established our “voluntary audit manual for
subcontractors” in 1997, and carry out periodic internal audits ateach operating site to check that dealings are appropriate and arefair according to the Subcontract Act. The Procurement Dept.
gets involved to provide audits and guidance as needed.
We require all of our procurement staff to attend externalseminars about dealing with subcontractors fairly.

Basic procurement policy
1. To pursue stable procurement for best quality/cost andprepare for market fluctuations.
2. To improve corporate value for both sides through mutual
cooperation.
3. To create trust with affiliated companies by observing rules,
regulations and social precepts.
4. To comply with social duties such as preservation of the
global environment through procurement activity.

Fair and responsible dealings with suppliers
Our “CSR Policy” states that we shall establish excellent
partnerships with our suppliers and engage in appropriate
dealings with them.

Supporting Suppliers in Acting
Responsibly
Helping responsible suppliers obtainenvironmental management system
certification
We help suppliers to become certified under the “EcoStage,”*1 the“EcoStage entry version,”*2 and other environmental management
systems. We visit responsible suppliers that do not plan to obtaincertification to tell them about “EcoStage” and the “EcoStage entry
version” to them. We even have a system in which some of our exemployees act as consultants to help companies to obtaincertification.
By fiscal 2009, 33 suppliers had received “EcoStage”
certification, with another 15 qualifying under the “EcoStage entry
version.”*1 EcoStage: The environmental management system of EcoStage Institute.
*2 EcoStage entry version: NTN proposed this EMS to EcoStage Institute forsmall companies with up to 15 employees. It was adopted as a trial
certification level in 2004.

Helping prevent infections from new strains
of influenza
In 2009, we set up a crisis management center to prevent infection
from new strains of influenza under the World Health Organization’s
issuance of its phase 5 pandemic alert. We also asked suppliers tocooperate with precautionary measures. After infections wereconfirmed in Japan, we provided seven suppliers lacking sufficientmasks with 2,900 of these items at no charge.

Communication with Suppliers
CSR

Fair Dealings

Explaining procurement policy and otherrequirements to suppliers
NTN holds “Responsibility to Suppliers” meetings twice a year.
We explain our procurement policy and trends in production
volume at each of our operating sites. But we also request the
support of responsible suppliers for our production activities andask them to obtain various types of certification.

Commemorative tree plantings share joys ofmutual growth
Since celebrating our 88th anniversary in fiscal 2006, we haveheld annual commemorative cherry tree plantings with suppliers
to share the joys of mutual growth with those companies. In fiscal
2009, 45 suppliers planted trees.

Supporting suppliers in obtaining“Ecostage” certification
Manager,
NTN Technical Service Corporation

Kiyoshi Nakanishi
The suppliers that the NTN Group supports in acquiring
environmental certification include many comparatively
small-scale suppliers. Our endeavors go beyond merely
environmental improvements at these suppliers, they also
encompass advising and guiding about reducing thepercentage of defective products and fundamentallyenhancing production workplace standards. We aim to both
expand the sphere of the NTN Group's opening environment
and also contribute to improving our suppliers’ management.

NTN Re port 201034

Responsibility to Shareholders

We actively disclose information to increase corporate value
Streamlined procedures for shareholders
to exercise their voting rights
Striving to optimize shareholder value
We have taken the following steps to streamline procedures forshareholders to exercise their voting rights:• Swiftly mailing our general shareholder meeting notice: We send
these notices six days earlier than the statutory deadline basedon the meeting date.
• Scheduling meetings that avoid the dates that most companies
set for such gatherings: We do this because we want as many
shareholders as possible to attend, taking into account suchfactors as settlement and audit schedules and the time needed
to prepare internally for these meetings.
• Broadly notifying of our general shareholders meeting and otherinformation: We disclose our general shareholders meeting
notice and other information through the Tokyo Stock Exchange
and through our website to reach as many shareholders andinvestors as possible.
• Using electronic voting: We accept shareholder votes throughthe 5:25 p.m. close of business up to the day before thegeneral shareholder meeting. If a shareholder votes both bypost and through the Internet, we treat the online vote as valid.
If a shareholder votes several times through the Internet, the lastvote is valid.
• Other efforts: We present some of the business report andsettlement data as graphs, photos, and other visuals tocomplement the meeting chairperson’s explanations and makeinformation in shareholder meetings easier to understand.

Shareholder returns
Making ongoing, stable returns a top priority
Shareholder returns are an important part of NTN’s management
policies. It is standard practice to pay steady dividends toshareholders based on a medium-to-long-term perspective.
Dividends are determined considering such factors as our
performance, dividend trends, and the business climate.
The annual cash dividend for the fiscal year ended March 2010was ¥8 per share.

Recognition from outside agencies
Recommended as a socially responsible
investment in the stock market
NTN has been selected by socially responsible investment funds
in the stock market. Such choices attest to our efforts to preserve
the environment and contribute to society.
In Japan, we have been chosen for the “Morningstar CSR
Investment Register” every year since 2003. Outside of Japan,
NTN has been chosen since 2002 by the “FTSE4Good Global
Index” and since 2005 by “The Ethibel Pioneer Investment
Register” and “The Ethibel Excellence Investment Register” (as ofJuly 2010).

Morningstar CSR
Investment Register

FTSE4Good Global
Index

Reinforcing our investor relations activities
Top management actively engaging ininvestor relations
Top management leads proactive company-wide investor
relations efforts. We regularly brief individual investors throughindividual investor seminars that large brokerages arrange. We
convene results meetings, teleconferences, one-on-one
gatherings, and other regular briefings for analysts andinstitutional investors. We make timely visits to institutional
investors in the Americas, Europe, the Middle East, and Asia forpresentations and other activities.

Establishing Investor Relations and Public
Relations Department to specialize in investor
relations
We set up our Investor Relations and Public Relations Department
in February 2010. The Management Planning Department
previously oversaw our investor relations activities. We created thespecialized new department to strengthen these efforts. We thus
aim to deepen communication with our shareholders andinvestors and more proactively disclose information.

Active disclosure of information
Pursuing swift and accurate disclosure
We satisfy timely disclosure requirements under Securities Listing
Regulations by presenting information through the Tokyo Stock
Exchange’s Company Announcements Disclosure Service. We
also strive to ensure swift, accurate, and fair disclosure from theperspectives of all shareholders and investors.
We are quick to broadly disclose financial materials on
website, including our securities, semiannual, and quarterly
report, business results, annual and business reports, andmaterials from our results meetings.

35

NTN Report 2010

The Ethibel Pioneer
Investment Register
The Ethibel Excellence
Investment Register

Financial results presentation

Responsibility to Employees

We respect the individuality and diversity of employees while
striving to create a safe, comfortable workplace.
“Mom-back system” for helping employees
find re-employment after giving birthWork-life balance
Emphasizing work-life balance
NTN is creating systems that underpin its focus on “work-lifebalance.” We help employees balance professional and childcare
obligations through our “Child-raising Support Declaration
system,” our “Mom-back system,” and our “Babysitter Support
system.” These setups support emplyees from pregnancy andprenatal care stages through to their return to work.

“Child-raising Support Declaration system”
for sharing parenting plans throughout
workplaces

Number of employees taking
leave to raise children(persons)

Male

10

Female14

15

Number of “Bear Kids Land”
users at Iwata Works(persons)

13

9

Providing employee peace of mind throughintra-company daycare
We established an intra-company daycare called “Bear Kids
Land” at Iwata Works in April 2009 to give employees peace ofmind. This was our first such facility. It accepts children on amonthly basis, a temporary basis and for extended hours in caseparents have to work overtime.
The facility looks after small numbers of children to provide theequivalent of family care. It can handle children with allergies, andall meals are cooked on site. The single-story facility is made ofnatural wood and uses environmentally friendly solar power.

CSR

We have been promoting the “Child-raising Support Declaration
system” to share parenting plans throughout workplaces of
employees thinking of exploring work-life balance steps. These
people start by recording their plans for the next year in theirdeclarations. Workplace managers follow up by helping those
employees improve their work practices to materialize their plans.
The managers also share these plans throughout workplaces toobtain the understanding and cooperation of other workers.
We offer the “Babysitter Support system” to help parents
balance postnatal infant care and work.

The “Mom-back system” is a framework for people seeking reemployment, where jobs are available, after temporarily resigning
to raise children.
Employees qualifying for this system can be in one of four
categories. These are people who 1) have resigned because of
pregnancy or childbirth, 2) have resigned to raise their children, 3)
have resigned to get married and have become pregnant, given
birth, and raised their children, and 4) are regular employees
whom the Company deems fulfilling the requirements of any of
the above categories. Male employees resigning because of
spouse pregnancy or birth or to help raise children can also
qualify for this system.

Contract on a monthly-fixed amount childcare
Short-term custody childcare

15

12

12
11

10

6
5

0

5

0

0

2007

2008

3

2009 (FY)

0

2

2008
April

3

2008
October

2009 (FY)
April“Bear Kids Land” building with installed solar panels“Bear Kids Land”

The cooperation of everyone at work
enabled me to take paternity leave.
Supervisor, Legal Dept.

Kenji Shibahara
I took childcare leave for five months
from December 2009. I was admittedly
somewhat unsure about whether I
should take leave, but being able tofocus on looking after my child was avaluable use of time and a wonderfulexperience. The support of my bossand colleagues enabled me to balance
my professional and private obligations,and I am deeply grateful to them.

NTN Re port 201036

Responsibility to Employees

Emphasizing employee diversity

Respecting the rights of workers

Maintaining an organization that encourages
the individuality of all employees

Respecting labor agreement based on mutual
trust and equality

Maintaining an organization that encourages the individuality of all
employees and enables them to fully realize their potential is key
to improving our competitiveness as a corporation. We thus
undertake an array of initiatives to support female employees, reemploy retirees, and provide work assistance for disabled
employees.

Our company has concluded a labor agreement with the NTN
Labor Union based on a spirit of mutual trust and equality
between labor and management. We have pledged to uphold thisagreement based on common goodwill.
Labor and management communicate through informal talks
and various labor-management meetings to work on
accomplishing various measures. Labor-management meetings
will be held regarding any changes to labor conditions andpersonnel management and any changes will be carried out upon
mutual agreement.

Giving opportunities for people to use theirabilities after retirement
In 2006, we revised our system for re-employing highly skilled
retirees in their early 60s to provide opportunities for continuous
employment.
This system is for employees who satisfy all employment
standards such as willingness and desire to work, attitude, health,and strength. They can choose from the Skill Transfer or Full
Excellence options in this program. The Skill Transfer allows
participants to pass on their technical skills, abilities, andprofessional knowledge to young employees. The Full Excellence
option allows participants to utilize the skills they have developed
through the years to work. In 2009, we re-employed 73
individuals.

Helping the disabled to become independent
through work
We have set aside workplaces that allow us to help disabled
people excel and become independent, and we work to employ
disabled people.
As part of this commitment, we created “Dream Workshops”
at Iwata Works, Kuwana Works, and Okayama Works in 2004. In
these workshops, disabled persons take responsibility and have asense of purpose in their work as they carry out their duties withexperienced employees. As of March 2010, nine disabled
persons worked in these workshops under instructions fromexperienced employees. Disabled persons represented more thanJapan’s legal requirement of 1.80% from fiscal 2003 through2008, but in fiscal 2009 the proportion was below that
requirement, at 1.77%, partly because of resignations and otherfactors. We will strive to attain the legal requirement, largely byhiring disabled persons for sites with lower percentages of them.

Respecting human rights
Creating a discrimination-free workplace that
respects human rights
Based on our “CSR Management rule” and our “Business Codeof Conduct,” we strive to create a fair and equitable workplaceenvironment, respecting human rights and ending discriminatory
acts in the workplace.
We strengthen respect for human rights in many ways. For
example, we hold classes on the subject in training for new
employees, supervisors, andmanagers. We participate in theactivities of regional human rights
organizations, run educational
initiatives, and take part in humanrights exhibitions. We prevent
sexual and power harassment by
maintaining an ongoing workshop
program and distributing
pamphlets to all employees.
We set up internal and external
help desks to make it easy for
employees to seek advice on any
Pamphlet about how toconcerns.
prevent sexual harassment

Number of employees
Consolidated regular employees
Non-consolidated regular employees (female)Non-consolidated regular employees (male)(persons)
25,00020,67918,96020,00017,95917,30615,00014,631

10,000Work in progress at the “Dream Workshops”

5,000

436

434

435

464

477

5,006

5,011

4,965

5,021

4,944

2005

2006

2007

2008

2009

0

37

NTN Report 2010

(FY)

Improving Levels of Occupational Safety and Health
Building an administrative structure based on
our Occupational Safety and HealthManagement System

National average

Incidence rate
1.95
2.00

NTN Group companies in Japan(5 operating sites and 3 group companies)

1.90

1.83

1.75
1.62

1.50

1.00

0.50

0.35

0.34

0.26

0.18
0.08

0

2005

2006

2007

2008

2009
(Fiscal year)

National average

Severity rate

NTN Group companies in Japan(5 operating sites and 3 group companies)
0.15

0.120

Helping employees to improve themselves torealize their potential
We assist employees with self-improvement so they can all fully
apply their talents.
We assist employees taking the Test of English for International
Communication to reinforce their capabilities as befitting a global
enterprise. Employees can choose from 271 correspondence
courses matching their abilities to increase their business andspecialist skills. We offer these courses twice annually. We offer
English correspondence courses to new employees, starting fromwhen we provisionally hire them.

Rewards for employee inventions
Rewarding employees’ inventions
To reward our employees’ inventions and to improve our technicalcompetitiveness, we have established a “Patent Managementrule” and a “Patent Reward rule” and we have clarified how patentrights are attributed and how the value of the award is calculated.
Rewards are also made for foreign patents and for know-how andinventions considered to be trade secrets. There is no upper limit
to actual awards.
In fiscal 2009, there were 68 separate patent rewards made to
93 individuals.

CSR

We work to create safe work environments based on a “safety
first” spirit that respects people. We have therefore created asafety and health management system based on Occupational
Safety and Health Management System (OSHMS). As of fiscal
2009, all seven operating sites of the NTN Group in Japan had
been certified by the Japan Industrial Safety and Health
Association.
Our workplace accident “incidence rate”, which indicates thefrequency of workplace accidents, and “severity rate”, which
describes the seriousness of such mishaps, are below thenational averages. We had 11 workplace accidents in fiscal 2009,
however, and responded by strengthening safety and healthmanagement to achieve zero workplace accidents.
We are acting to create more comfortable workplaces andthereby prevent mental illnesses among employees. For example,
we conduct mini-interviews during health checkups. Employees
can make appointments to speak with counselors in the biweekly“Oasis NTN program”. Other initiatives include the telephonebased Mental and Physical Health Counseling Service (alsoaccessible through our website), for which both the assistanceand phone calls are free. Specialists provide mental health training
for managers and supervisors and help sufferers to return towork.

Supporting self-improvement

Holding family tours
Conducting plant tours for employees’ families
We conduct “family tours” as part of initiatives to deepen
understanding of our business activities. We showed families
around seven domestic sites in fiscal 2009.
The Kuwana Works tour started with a DVD presentation
profiling the company. Other activities included a visit to a new
ultralarge plant, a demonstration of a machine that simulates
some of the dangers of factory work, and a quiz on bearings. The
visitors, ranging from two-year-olds to senior citizens,
enthusiastically listened to explanations about bearings and wereparticularly interested in the Kuwana Works’ wind power
generator and new solar generator.
NTN Mikumo Co., Ltd., held a tour in November 2009 in
response to requests to hold such tours outside of the summer
season. There were 22 participants, with children in the grouplearning how to exchange business cards followed by a productpresentation that doubled as a game. Afterwards, the visitors
toured the facility and lunched in the dining hall.

0.120
0.110
0.100
0.090

0.10

0.05

0.010

0.004

0.002

0.002

2006

2007

2008

0.006

0

2005

2009

“Family tours” at NTN Mikumo Company Ltd.

(Fiscal year)

NTN Re port 201038

Responsibility to Local Communities

Undertaking social contribution activities with communities
as a good corporate citizen
Planting forests
Continuing forest planting activities in various
locations
In fiscal 2002, the Group responded to a rising nationalawareness of such environmental protection issues as preventing
global warming and preserving biodiversity by undertaking “NTN
Kigyo no mori” (NTN corporate forest stewardship) activities toprotect and plant trees in forests.
In fiscal 2009, the Okayama Works planted trees in an “NTN
Kigyo no mori” in Mimasaka City, Okayama Prefecture. The
Okayama Works is borrowing the approximately 3.5-hectare
forest under a “Kigyo to kyodo tono mori zukuri” agreement(Public corporate forest-planting) that it signed with Mimasaka
City in August 2008. For activities on the day of the event, 65
employees and their families from Okayama Works and NTN
Bizen Corporation planted and thinned trees under the
instructions of officials from the Forestry Policy Division of
Okayama Prefecture. A local television program highlighted theirefforts.
Also in fiscal 2009, Nagano Works thinned trees at an “NTN
Kigyo no mori” in Komagane City, Nagano Prefecture. These
activities were based on a “Mori-no-satooya” program (Adopt-a-

Forest) maintenance agreement concluded with Komagane City in2006 as a part of the prefecture’s forest adoption program. A totalof 42 NTN employees and their families participated in the twoforest activities for the year. From 2006 through 2008, Nagano
Works people thinned trees and removed underbrush overaround 14 hectares. Komagane City rewarded these efforts by
issuing a certificate stating that these endeavors had contributed
to absorbing about 191 tons of CO2.
The Group considers it necessary to undertake ongoing
activities to protect and foster forests around Japan, and plans to
expand these efforts.

“NTN Kigyo no mori” of Nagano Works

Chart of “NTN Kigyo no mori” activities“Shizuoka mirai-no mori supporter” system (Supporters of Shizuoka’s future forest) Activity period: Five years from 2008

Iwata Works

Initiatives:

Fiscal 2009 efforts

Participating in Shizuoka Prefecture’s “Shizuoka mirai-no mori supporter”
system (Supporters of Shizuoka’s future forest), cutting underbrush,
maintaining a wild bird preserve, and improving mountain trails• Activities held on February 7, April 11, July 4, August 22,
September 26, and November 21• Received prefectural contribution label and CO2 absorption
certificate from Shizuoka Prefecture in September 2009

“Kigyo tono kyodo no mori zukuri” agreement (Public corporate forest-planting) Activity period: Five years from 2008

Okayama Works

Initiatives:

Fiscal 2009 efforts

Borrowing Mimasaka City-owned land to plant trees, maintain the forest, andparticipate in mushroom growing and nature observation walks• Activities held on April 18 and October 31“Mori-no-satooya” program (Adopt-a-Forest) Activity period: Five years from 2006
Initiatives:

Fiscal 2009 efforts

Support Komagane City and implement forest maintenance such as tree
planting, tree thinning and underbrush cutting in cooperation with the city.

• Activities held on June 6 and July 4• Received CO2 absorption certificate from city in June 2009 foractivities

Nagano Works“Kayano Heights plateau tree planting and maintenance” project Activity period: Three years from 2007
Initiatives:

Fiscal 2009 efforts

Providing financial support for cultivating cherry trees and improving a nature
trail as part of Minowa Town’s tree planting and maintenance project in the
Kayano Heights plateau• Participated in April 2009 ceremony to mark the beginning ofmountain leisure season for Kayano Heights plateau“NTN Kinan Muro nagomi-no mori” (Forest of Relaxation) Activity period: 10 years from 2007

NTN Kinan
Corporation

Kuwana Works

39

NTN Report 2010

Initiatives:

Fiscal 2009 efforts

Participate in “Kigyo no mori” program of Wakayama Prefecture and growaround 2,000 board-leaf trees in a 1-hectare forest• Activities held on June 10 (with forestry cooperative
undertaking regular maintenance)

Planning to start activities from the second half of fiscal 2010

Promoting local traffic safety
Acting to prevent traffic accidents
The NTN Group is active in accident prevention efforts to help
create a safe and secure society. In December 2009, the Nagano
Works’ “Young Drivers Club” participated for the second straightyear in the traffic accident prevention contest of the Nagano
Prefectural Safe Driving Administrators Association, winning theNagano Prefectural Police Headquarters Excellence Award.
Nagano Prefecture has organized “Young Drivers Clubs” withincompanies to prevent traffic accidents among young people.
Nagano Works employees up to 26 years of age voluntarily run its
club, submitting essays and posters to the traffic accident
prevention contest as part of their proactive involvement in traffic
safety patrols.
The Nagano Works Young Drivers Club was selected fromaround 330 similar clubs in the prefecture for this award inrecognition of such activities.

Participating with
community members intraffic safety activities

Introducing Japanese culture to American
childrenNTN DRIVESHAFT, INC. (NDI) participated in the Bartholomew
County Public Library Literacy Festival in Indiana. The event
promotes reading among children, and the library introduces
books and presents plays.
Various businesses andorganizations had booths in thelibrary on festival day. The NDI
booth introduced Japaneseculture by writing children’s names
in Japanese and Chinesecharacters and teaching them
NDI booth at Literacy Festival
origami.

Community clean-ups
Community clean-ups
Actively participating in local community
clean-ups

Shanghai NTN Corporation
traffic safety patrols

Helping to create a gender-equal society
Receiving award from Shizuoka Prefecture
for contributing to a gender-equal society
The Group promotes the creation of a gender-equal society by
improving the working environment.
In July 2009, Shizuoka Prefecture awarded the Iwata Works aPrefectural Governor’s Merit Award for Activities to Help Create a
Gender-Equal Society. This program recognizes businesses within
the prefecture that are striving to contribute to gender-equality.
Iwata Works was lauded forestablishing “Bear Kids Land,” anin-house nursery, for promoting
work-life balance, and for otherinitiatives to enable women to
demonstrate their abilities andbecome more active in theCertificate of merit
workplace.

The Group is also active in helping beautify communities. In fiscal
2009, 16 Japanese and overseas offices engaged in such efforts.
At NTN Kongo Corporation, 20 employees collected about
35kg of garbage outside its site. Elsewhere, 28 employees of
NTN Casting Corporation cleaned up around Lake Shinji, which isregistered under the Ramsar Convention.
Employees of NTN MANUFACTURING (THAILAND) CO., LTD.,
voluntarily participated in a clean-up at Sukapaap Park, while
about 300 employees from Shanghai NTN Corporation performed
clean-up activities.

CSR

The Group participates with
community members in daily traffic
safety activities.
In fiscal 2009, six business sites
in Japan and abroad participated intraffic safety patrols.

Engaging with communities

I would like to harness my
NTN training experiences inFranceInstitut National des Sciences Appliquées de Lyon

Vincent SamyAccepting internships
Accepting foreign student internships
The Group actively accepts interns. An internship program
enables students to work in a company for a certain period togain work experience.
In fiscal 2009, eight business sites in Japan and abroad
accepted interns. The Iwata Works accepted NTN’s first foreigninterns.

The NTN Iwata Works looked after me as a factory internfrom France’s Institut National des Sciences Appliquées de
Lyon. A plant tour and internship gave me first-hand exposure
to the importance of Kaizen. The zeal and curiosity of NTN’s
people was somewhat of a culture shock, but I made several
friends at work and at the dormitory. I am grateful from thebottom of my heart for the kindness of everyone, and foundmy internship extremely meaningful.

NTN Re port 201040

Environmental Policy andManagement Structure
Building a group-wide environmental management structure
to reduce environmental impact
Environmental Policy

Environmental Management System

Formulation of Environmental Policy andpromoting activities across the Group

Aiming to develop a comprehensive
environmental management system

The NTN group, in working to reduce its environmental impact
and contribute to the sustainable development of society, hasformulated a group-wide “Environmental Policy.”
To enact this policy, we established the Company-wide
Environmental Management Committee, which includes groupcompanies in Japan. The committee has set environmental
targets for the entire company and for individual operating sites
for reducing CO2 and waste. Also, the Energy and Natural
Resources Conservation Action Committee at our Manufacturing
Division and the Office Environmental Action Committee at our
Head Office and Sales Department have been established toenhance our environmental management structure.

In a bid to enhance its environmental management structure, theNTN group is adopting a comprehensive environmental
management system applicable to the entire group. Specifically,
the NTN group has obtained a multi-site* ISO 14001 certification
for some operating sites and is preparing its other sites to join themulti-site certification.
16 out of 21 operating sites in Japan have obtained ISO
14001 certification and 15 of those are in the multi-site
certification. A total of 14 out of 15 overseas operating sites havealso obtained ISO 14001 certification.
In fiscal 2010, NTN Kamiina Corp., NTN Bizen Corp., andElemental Technology R&D Center also began taking part in multisite certification, as the NTN group made progress in developing
this system.

Environmental Policy*Multi-site certification: Certification obtained for multiple sites operating under a single
system.

Harmony with the global environment is our mostimportant issue and we will continuously strive tocontribute to the harmonious development of society andwork to reduce the impact of our corporate activities on
the environment.

Environmental Management Structure

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 highprecision processing technologies.

2. Reduction of environmental impact• NTN will work to prevent global warming by improving energy efficiency
activities throughout the business process, from procurement ofmaterials 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 substancessuspected of having harmful effects.

3. Observance of laws and regulations andimplementation of thorough environmental
management systems• In addition to observing laws, regulations and ordinances, NTN will
actively seek to comply with requests from regional communities andcustomers by imposing tighter self-determined standards and internal
rules, and keeping to them.
• NTN will establish an environmental management organization andoperational methods, and will conduct environmental audits to maintainand 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.

4. Activities to contribute to society and protect thenatural environment• 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.
March 1, 2009
Person responsible forcompany-wide environmental controlling
NTN Corporation

41

NTN Report 2010

President
Person responsible forcompany-wide
environmental controlling(Director Responsible forEnvilonment Matters)
Company-wide Environmental
Management Manager(General Manager ofEnvilonmental Management
Department)

Energy and Natural Resources
Conservation Subcommittee

Company-wide
Environmental
Management
Committee

Hazardous Substances
Management Subcommittee
Pollution Prevention
Subcommittee
Logistics Environmental
Subcommittee

Environmental
Management
Department
Manufacturing Division
Research Division(On-site Envilonmental
Management Cordinator)

On-siteEnvironmental
Management
Committee

Head Office, Sales Division,
Logistic Division(On-site Envilonmental
Management Cordinator)

Internal
Environmental
Auditing TeamOn-site Environmental
Management DivisionInternal
Environmental
Auditing TeamOn-site Environmental
Management Division

Energy andNatural Resources
Conservation
Action Committee

Manufacturing
Division

Logistics
Environmental
Action Committee

Head Office /Sales Offices /Sales Branches

Hazardous
Substances
Action Committee

Research
Division

OfficeEnvironmental
Action Committee

Logistic
Division

Pollution
Prevention
Action CommitteePerforming Environmental Audits

Continued Enactment of Environmental Education

Multifaceted approach to environmental
audits that includes external audits

Environmental education for employees toraise environmental awareness

The NTN group not only obtains ISO 14001 certification, but alsoemphasizes the audit of actions it takes to this end. For thisreason, the group is developing a multifaceted structure forenvironmental audits that, in addition to external audits, includes“internal audits” and “cross-audits,” which are done between
operating sites.
In fiscal 2009, internal audits were performed at all operatingsites, with cross-audits conducted between eight sites. Crossaudits in particular can lead to improved environmental
management, since these audits provide opportunities for mutual
learning of best practices, not simply detection of observableissues.
For external audits, the NTN group receives periodic, ongoingaudits from Japanese Standards Association. Audit results
showed four observations, including issues pertaining to
document management. However, the group was able tomaintain its environmental management registration since all
corrective measures put forth were deemed effective forpreventing any reoccurrence.

In an effort to increase environmental awareness, the NTN groupputs management, new managers, and new employees throughthe necessary environmental education programs.
During Environment Month in June of fiscal 2009, allemployees were given a “personal energy conservation pledgecard” to fill out and carry at all times. The NTN group also
instituted “Car Free Day” from being driven to work one day a
week.
On the other hand, since households generate some 15% ofJapan’s carbon emissions, reducing levels of CO2 emitted not
only by industry but from the household is another important task.
For this reason, in fiscal 2007, the NTN group started distributing“Household Eco-Account Books” to employees to makehouseholds more aware of the importance of reducing energy
consumption. In fiscal 2009, approximately 2,500 households
participated.

Environment Month in fiscal 2009

Personal Energy Conservation Pledge
Make a habit of turning unnecessary lights off
Avoid using elevators whenever possible
Skip the car when shopping nearby
Name:

Eco Taro

Energy conservation pledge card

ISO 14001 Ongoing audit

Environment

Operating sites with ISO 14001 certification
Date ofcertification

Operating site
RegionPlant

Company

Multi-site certification

Year

Month

1999 11

Operating site

Registration
Registration No.

Registrationbody

JSAE176

JSA

RegionCompanyJapan

JSAE1058

JSA

111994

LRQA112115LRQA

Macomb Plant 2000 ６

111998LRQA

2000 ６111999LRQA

Hamilton Plant

NTN DRIVESHAFT, INC.

1999 12

A8478

Registration
body

LRQA

0112005

2008 44000717

LRQA

Canada NTN BEARING CORP. OF CANADA LTD.

1999 7287

KPMG

NTN Kugellagerfabrik(Deutschland) G.m.b.H.

1999 ６

201167-2

LRQA

Thailand

U.S.A. NTN-BOWER
CORP.

Registration
Registration No.

2000 4

France

3

2005

Month

NTK PRECISION AXLE CORP.

Germany

2000 ６
Elgin Plant
AMERICAN NTNBEARING MFG.CORP.
Schiller Park Plant 2000 ９

NTN Tado Corp.

Year

NTN USA CORP. Head Office

U.S.A.

(Operating sites included)
Head Office, Kuwana Works, Iwata Works, Okayama Works,
Nagano Works, NTN Kongo Corp., NTN Mikumo Corp.,
NTN Engineering Plastics Corp., NTN Powder Metal Corp.,
Hikari Seiki Industry Co., Ltd., NTN Casting Corp.,
NTN Omaezaki Corp., NTN Mie Corp., NTN Fukuroi Corp.,
NTN Kinan Corp.

Date ofcertification

China

NTN TRANSMISSIONS EUROPE

2003 １

19479

AFAQ

SNR ROULEMENTS*

2009 １0448-4UTAC

NTN MANUFACTURING(THAILAND) CO., LTD.

2003 331634

TÜVGuangzhou NTN-Yulon
Drivetrain co., Ltd.

2005 ４104043247

TÜVShanghai NTN Corp.

2005 ７

CH05/0489

SGS*Multi-site certification

UL

Operating sites expected to be ISO 14001 certified
Expected year/month of certificationNTN Kamiina Corp.
Japan NTN Bizen Corp.
Elemental Technology R&D Center

Expected year/month of certification
RegionOperating site

Region

Year

Month

2010

11

2010

11

2010

11

Operating site
Year

Month

NTN Hakui Corp.

2011

11

NTN Houdatsushimizu Corp.

2011

11

NTN NEI Manufacturing India Private LTD.

2010

12

Japan
India

NTN Re port 201042

Environmental Policy andManagement Structure
Environmental Accounting
Contraction in environmental preservation
costs from the recession
The NTN group has introduced environmental accounting as aquantitative tool for evaluating environmental preservation
measures by group companies and other entities.
Due to the economic recession, in fiscal 2009 we invested 761
million yen in environment-related equipment, and spent 2,001
million yen in related costs. Both figures were less than therespective 1,035 million yen and 2,900 million yen recorded infiscal 2008. The economic benefit was 484 million yen, a declineof 419 million yen from a year earlier. Moreover, the NTN groupposted recycling-related costs associated with PCB* equipment.
In terms of our environmental impact, lower production volume
led to reduced CO2 emissions and reduced waste, resulting in an
improved recycle rate. The amount of paper and styrofoam that
we purchased also declined.

two teachers from Fukuroi Junior High School in Shizuoka
Prefecture, who toured the facility to observe its environmental
management activities as part of a hands-on social welfare andenvironmental learning program. During the tour, the visitors
learned how NTN group products are inherently eco-conscious,and gained an appreciation for how wastewater treatment plants
deal with polluted water and how trash is separated at waste
storage facilities. Through real-world environmental learning
opportunities of this kind, we intend to promote moreenvironmental activities in partnership with communities in the
future.
NTN Casting Corp. holds a meeting every year to strengthenties with local residents. In fiscal 2009, the meeting for the firsttime included a plant tour, and featured an explanation of thecompany’s annual environmental plan, as well as opportunities for
input from members of the community. Any opinions and requests
received from residents are then reflected in future environmental
improvement activities.

*PCB (Polychlorinated Biphenyl): An insulating oil once frequently used in transformers,
capacitors and other electrical equipment due to its superior insulating andincombustible properties. Later revealed to be highly toxic, production of PCB was
halted in Japan in 1972.

Environmental Communication
Support for hands-on environmental learning
programs for local teens
Each operating site works to enhance interaction with local
residents, with the environment as a major theme.
The Iwata Works was visited by 29 third-year students andHands-on environmental learning program at
the Iwata Works

At operating site in Japan

Environmental Preservation Costs(Millions of yen/year)

Classification

Work areas
internal costs

Pollution prevention costs

Equipment Investment

Costs

AmountDetails

AmountDetails0

Environmental equipment (dust collectors, particulate
smoke removal devices, and wastewater treatment equipment)

100

Inspection and management of environmental equipment(dust collectors and wastewater treatment equipment)

Energy-conserving equipment (compressors, lighting,air conditioning, etc.)

172

Costs of switching to energy-saving equipment, fromhalon fire extinguishers to CO2 extinguishers, etc.
Cost of waste recycling/processing of PCB equipment,
cost of processing regular and industrial waste

Expenses to preserve
the global environment

124

Resource recycling expenses

0.01

420

0

0.8

Analysis related to green procurement

298

Labor costs related to the EMS and information disclosure(advertising and CSR reports) and the greening andbeautification of company grounds

Upstream / downstream costs
Costs of management activities0

R&D costs

637

905

R&D costs related to environmental preservation

Costs of social activities

0

16

Greening and beautification outside the company

Environmental remediation expenses

089

Cost of soil sampling

Total

761

2,001

2,762

1,035

2,900

3,935

(For reference) Total from last fiscal year

R&D equipment related to environmental preservation

Impact on environmental preservation

Grand total

Financial effect of environmental preservation activities(Millions of yen/year)

Indicator

Result for Fiscal 2009

Total CO2 emissions

43

Result for
Fiscal 2008

Item

AmountProfit from recycling saleable materials

228

Profit from saleable materials such as metallic sludge

250,000 tons

310,000 tons

Reduced costs from energy conservation

129

Reduced costs from energy conservation(air conditioning and illumination)
Benefit of installing grinding swarf
briquetting machine

Reduction of waste

Recycle rate

99.9%

99.6%

Reduced waste treatment costs
through resource conservation and recycling

128

Reduction in paper purchases

Compared to fiscal 1998 (46.8%)(43.4%)

Total

484

Reduction in styrofoam purchases

Compared to fiscal 1999 (98.7%)(90.1%)(For reference) Total from last fiscal year903

NTN Report 2010

Details

Environmental Impact ofBusiness Activities
materials (steel and non-ferrous material) by our domestic sites infiscal 2009 was 288,000 tons, a decrease of about 15% over theprevious fiscal year. Also, the amounts of energy and water usedwere less than the previous fiscal year.
The amount of industrial waste that was landfilled was reducedby roughly 159 tons over the previous fiscal year to 58 tons partly
because of the complete recycling of the brick waste generated
by the casting process. As a result of decreased production andthe energy conservation improvements carried out at each
operating site, CO2 emissions were reduced by around 20%
versus the previous fiscal year to 250,000 tons.

Environmental Impact of Business Activities
Reducing the environmental impact over a
product’s entire lifecycle
The NTN group emphasizes the importance of grasping
environmental impact over the entire lifecycle of our products. To
this end, we strive to understand the amount of raw materials,
energy, and water we use (the input) for our products and their
total environmental impact (the output), and take steps to reducethese levels.
Due to decreased production volume, the input of raw
Purchased amount of fuelElectrical consumption

Water usage(10,000 kL/year)(GWh/year)(10,000 m3/year)

800

3.0

300

2.58

2.39

562

2.12

2.0

At operating site in Japan

237

225

583

523

1.62

207
179

200

446
400

100

1.0

0

0

2006

2007

2008

2009

0

2006

(FY)

2007

2008

2009

2006

(FY)

2007

EnergyFuel (gasoline, gas)

16,200 kL

2009 (FY)

Water

Electricity
446 GWh(crude oil equivalent)

2008

Water
1,790,000m3

Purchased amount of
raw materials(10,000 ton/year)
50
40

36.7

39.8
34.0
28.8

30
20

Environment

10
0

2006

2007

2008

2009 (FY)

Production process

Raw materials

Raw materials
288,000 tons

Forging

Steel materials: 285,000 tons
Non-ferrous materials: 3,100 tons

Grinding

Heat
Treatment•

Turning

Products

Assembly•

PolishingMaterial
recycling

Thermalrecycling

Scrap metal
19,200 tons

Waste oil
4,440 tons

CO2

Disposal of industrial waste

Wastewater

Disposal of industrial waste
Total landfilled amountCO2 emissions
250,000 tons

Use ofcirculating water
130,000m3

Wastewater
1,640,000m3

58 tons

CO2 emissions

Total landfilled amount

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

40

1,500

250

34.0

35.3
31.1

30

200

25.0

923

1,000

206
163

164

2008

2009

150

711

20

198

100
500
10

217

50

58
0

0

2006

2007

2008

2009

(FY)

0

2006 2007 2008 2009 (FY)

2006

2007

(FY)

NTN Re port 201044

Environmental Targets and Results

Pursuing methodical environmental activities inthree priority fields
Making CO2 reduction our most important
issue and taking fundamental steps
The NTN group has environmental targets to achieve by fiscal
2010 in three fields: preservation of the global environment,
creating a recycling society, and maintaining and improving theenvironmental management system. These targets were set in
fiscal 1998 to enable more methodical environmental activities,
and we have taken concrete action along these lines ever since.

In fiscal 2009, we notably set “promoting energy conservation
and reducing CO2 emissions,” “participating in local environmental
activities,” and “promoting green procurement” as priority goals,
and launched full-scale initiatives in these areas.
Our total CO2 emissions in fiscal 2009 decreased to 250,000
tons, due to both reduced production in Japan and energy
conservation improvements.
Our zero emissions efforts in fiscal 2009 resulted in a recycling

Results of Environmental Management Activities in Fiscal 2009

Preservation of the global environment

PurposeFiscal 2009 Targets

Fiscal 2009 Results

Domestic

Achieve total CO2 emissions of 250,000 tons/year or less
Achieve an 8% improvement in CO2 emissions rate overfiscal 1997

Achieved total CO2 emissions of 250,000 tons/year or less
Achieved a 14% improvement in CO2 emissions rate overfiscal 1997

Overseas

Achieve a 3% increase in CO2emissions rate over fiscal 2006

Achieved a 7% improvement in CO2 emissions rate overfiscal 2006

Replace halon fire extinguishers with CO2 fire
extinguishers
47 halon units remaining at the end of fiscal 2009

Replace halon fire extinguishers with CO2 fire
extinguishers
23 halon units remained at the end of fiscal 2009

Reduce the use of substances designatedby PRTR Law*1 by 38% over fiscal 2006

Reduced the use of substances designatedby PRTR Law by 55% over fiscal 2006

Promote local greening activities (e.g., “NTN Kigyo no
mori activities (NTN corporate forest stewardship))Conducted Kigyo no mori activities in Iwata, Okayama,
Nagano and Kinan

Work toward achieving zero emissions
with a recycle rate of 99.5%

Worked toward achieving zero emissions andachieved a recycle rate of 99.9%

Reduce landfill waste to 25 tons/month or less

Reduced landfill waste to 4.9 tons/monthAchieve zero emissions with a recycle rate of 96.3%

Worked toward achieving zero emissions andachieved a recycle rate of 95.6%

Reduce paper consumption by 46.2% over fiscal 1998

Reduced paper consumption by 46.8% over fiscal 1998

Reduce Styrofoam usage by 92.4% over fiscal 1999

Reduced Styrofoam usage by 98.7% over fiscal 1999

Prepare systems to obtain ISO 14001 certification at
new sites(Joining multi-site certification in fiscal 2010)

Promoting certification for NTN Kamiina Corporation,
NTN Bizen Corporation, and Elemental Technology
R&D Center

Respond robustly to investigations of environmentallyhazardous substances

Replied to survey requests from customers (1,169/year)

Implement hazardous substance audits(Internal audits, supplier audits)

We have not implemented hazardous substance audits
at partial sites.

Conducted ongoing incoming inspections

Continuously conducted at each operating site

Encourage suppliers andvendors to implement
Domestic
environmental management
systems

Support key suppliers in obtaining certification such as
ISO 14001, achieving 90% certification or more

Supported key suppliers in obtaining certification such as
ISO 14001, achieving 92% certification

Comply withnew regulations

Comply with amended Act on the Rational Use ofEnergy and amended PRTR Law

Comply with amended Act on the Rational Use of Energy:
determine energy use in offices
Comply with amended PRTR Law: Acquired new MSDS*2

ReduceCO2 emissions

Reduce air, water,and groundpollution

Domestic

Creating a recycling society

Participate in local
Domestic
environmental activities

Domestic
Reducewaste materials
Overseas

Preserve
resources

Maintaining and improving
the environmental management system

Internal systems

Promote green
procurement

Domestic

Domestic
Overseas

Domestic

Domestic*1 PRTR Law: Pollutant Release and Transfer Register*2 MSDS: Material Safety Data Sheet

45

Evaluation

NTN Report 2010

Achieved

In progress

Not achieved

1

2

rate in Japan of 99.9%, exceeding our target of 99.5%. However,
our overseas recycling rate was 0.7 of a percentage point lower
than our target of 96.3%.

European Union’s RoHS Directive* and ELV Directive* . However,since audits have not implemented for hazardous substances atpartial sites, we intend to correct this oversight in fiscal 2010.

Ongoing acceptance of incoming inspections ofenvironmentally hazardous substances*1 RoHS Directive: This directive prohibits the use of designated hazardous
substances in electrical and electronic devices.
*2 ELV Directive: This directive aims to limit hazardous substances from vehicles by
mandating recyclable materials.

The NTN group continued to conduct incoming inspections ofenvironmentally hazardous substances in response to the

Fiscal 2010 Environmental Targets

Preservation of the global environment

PurposeFiscal 2010 Targets
Domestic

Achieve total CO2 emissions of 290,000 tons/year or less(Target emissions coefficient for power suppliers)
Achieve a 20% improvement in CO2 emissions rate over fiscal 1997

Overseas

Achieve a 10% improvement in CO2 emissions rate over fiscal 2006

ReduceCO2 emissions

Completely phase out halon fire extinguishers by fiscal year-end
Reduce air, water,and groundpollution

Domestic
Reduce the use of substances designated by PRTR Law
by 45% over fiscal 2006

Participate in local
Domestic
environmental activities

Promote local greening activities
Establish Kigyo no mori plan for the surrounding Kuwana area
(Commence activities from second half of fiscal 2010)

Reducewaste materials

Environment

Turbo chiller for air conditioning system(NTN Kongo Corp.)

Creating a recycling society

Work toward achieving zero emissions with a recycle rate of 99.7%
Domestic
Reduce landfill waste to 10 tons/month or lessOverseas

Achieve zero emissions with a recycle rate of 98%

Reduce paper consumption by 48% over fiscal 1998
Preserve resources

Domestic
Reduced Styrofoam usage by 98.8% over fiscal 1999

Solar power generator(Elemental Technology R&D Center)

Maintaining and improving
the environmental management system

Internal systems

Domestic
Overseas

Establish system for obtaining global (all operating sites) ISO
14001 certification (NTN Houdatsushimizu, NTN Hakui, NNMI)
Formulate and promote plan for alternatives to phthalate esters

Implement hazardous substance audits at all sites
Promote green
procurement

Domestic
Continue conducting incoming inspections

Zero complaints of environmentally hazardous substances
Encourage suppliers andvendors to implement
Domestic
environmental management
systems

Support key suppliers in obtaining certification such as ISO
14001, achieving 95% certification or more

Comply withnew regulations

Track usage of substances designated by the amended PRTR Law
Respond robustly to the amended Soil Contamination
Countermeasures Act

Domestic

NTN Re port 201046

Measures Against Global Warming

We took advantage of geographic features to refurbish plants
in ways that better conserve energy
Promoting large-scale energy conservation
improvements at our plants
Leveraging regional features to promoteenergy conservation improvements
Most energy consumed in NTN group plants is by facility
requirements such as compressors, air conditioning, and lighting.
As such, reducing CO2 emissions at our plants requires largescale energy conservation improvements. For this reason, theNTN group utilized various national-level subsidies and othersources to carry out this major refurbishment work on its plants.
In fiscal 2009, the Nagano Works performed construction work
to improve energy conservation through a grant from the New
Energy and Industrial Technology Development Organization(NEDO). Specific improvements included the introduction of ahigh-efficiency turbo chiller, optimal cooling water pump flow
controls, and optimal free-cooling controls.
Of these innovations, freecooling takes advantage of thecool climate characteristic of
Nagano Prefecture, using the cool
air for air conditioning. With thischange, we can expect to reduce
CO2 emissions by 600 tons
annually, and save some 22
High-efficiency turbo chiller
million yen in annual energy costs. (Nagano Works)

With production volume now expected to rise, we set a target of
290,000 tons for fiscal 2010. This figure represents an evenstricter target than the 317,000 tons originally targeted for theyear back in 2008.
From a medium-term viewpoint, we have also set a target of
275,000 tons for fiscal 2012, the final commitment year forcountries under the “Kyoto Protocol.”Utilization of Natural Energy
Active utilization of natural energy
As part of efforts to lower its CO2 emissions, the NTN group
actively utilizes generated power from wind, solar and otherrenewable forms of energy. In fiscal 2009, we introduced a windturbine at NTN Houdatsushimizu
Corp.that began operating in
October. Meanwhile, the solar
and wind generators installed at
Elemental Technology R&D
Center in fiscal 2008 are being
used to recharge electricvehicles.
Wind power generator(NTN Houdatsushimizu Corporation)

CO2 emission rate (original 10 operating sites)(tons/millions of yen)
2.00

CO2 Reduction Targets

1.78 1.77
1.70

New CO2 reduction targets set for fiscal 2010
In 2008, the NTN group set a company-wide target to limit total
CO2 emissions from all domestic sites to 317,000 tons in 2010 (a10% reduction from fiscal 2007).
In fiscal 2009, we met our target of 250,000 tons, reflecting
lower production volume and CO2 reduction of roughly 11,000
tons due to large-scale energy conservation improvements
conducted at major works through the preceding fiscal year.

1.58

1.64
1.54

1.50

1.48 1.47 1.47

1.44

1.50 1.53
1.42

1.38

Target01997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
(FY)
<Calculated based on a constant CO2 emissions factor of 0.381kg/kWh>Total CO2 emissions

Natural energy output(10,000 tons/year)

Total output (kW)

50.0

700

597

610

600

33.9

34.0

35.3

500

31.1

29.0

30.0

27.5

400

25.0

332
304

300
20.0

214
190

200
10.0
100

Target
0

47

555

555

Wind
Solar
Total natural energy

40.0

Target

10

61

20

75
55

51

28

42

55

24

2006

2007

2008

2009

0

2005

2006

NTN Report 2010

2007

2008

2009

2010

2012

(FY)

2004

2005

(FY)

support to private-sector entities seeking to use the port to
reduce carbon emissions associated with the transport ofcontainer freight. Assistance funds are then supplied tocompanies that qualify based on their CO2 reduction rate.

Reducing the impact of logistics
on the environment
Encouraging a modal shift and fewer
containers to reduce CO2 emissions
99.8% of the NTN group’s product output is shipped by truck,
and all of this is left to logistics companies. Our yearly volume of
product transport for fiscal 2009 was approximately 72 million
1
ton-km* , which means that we are a “Designated Consigner”(shipping 30 million ton-km or more of cargo a year) under theamended Act on the Rational Use of Energy of 2006. In themedium- to long-term, we are required to improve our averageannual energy use rate by 1%.
Prior to the legal amendment, the NTN group had set a target:
Reduce CO2 emissions from logistics (per distance driven) by
12% over fiscal 1998 levels by fiscal 2010. To this end, NTN has
worked to raise awareness of eco-driving at logistics companies,
2
encouraging them to adopt the use of digital tachographs* andto switch to low-pollution vehicles.
In addition to these efforts, in fiscal 2009, the target that we
set was a 1% reduction over fiscal 2008 (12,300 tons), and weworked to make a modal shift to rail and marine shipments and to
modify the way that containers for export are stacked to reduce
the amount of cargo. The downturn in the economy also reduced
shipments, resulting in a total reduction of 10,600 tons, which
was a 14% reduction from fiscal 2008.
*1 ton-km: Cargo weight (in tons) multiplied by the distance transported (in kilometers).
*2 Digital tachograph: A measuring device that records driving information, enablingusers to assess vehicle operating status, improvements in fuel economy and otherdata.

In a bid to reduce CO2 emitted from the transport of containers
from the Kuwana Export Disribution Center, NTN has shifted theport it uses from Nagoya Port to Yokkaichi Port. This shift has
shortened the transport distance in Japan (from 20 kilometers to
12 kilometers), and reduced CO2 emissions from cargo transport
by 14.1 tons in fiscal 2009.
For this initiative, NTN has been recognized by Yokkaichi Port
Authority as eligible for the authority’s “Yokkaichi Port Green
Logistics Promotion Assistance Program.” This program provides

NagoyaPort

YokkaichiPort

Ise Bay

Utilizing Green Power
Using green power for the “NTN Report”
In addition to the sale of wind power, Japan Wind Development
Co., Ltd., an NTN customer, sells renewable energy certificates.
These certificates serve as guarantees of environmental added
value, such as energy savings and reductions in CO2 enabled byrenewable energy, and can be traded (sold) for this value. Japan
Wind Development holds conferences on how to effectively utilize
these renewable energy certificates in which NTN has been
participating.
For the publication of our fiscal 2009 CSR Report, wepurchased green power to cover the electricity consumed in theprinting and binding
process, for which
Japan Wind
Development issued
renewable energy
certificates. Green
power is also being
used for the fiscal 2010
Rokkashomura in Aomori Prefecture
NTN Report.

Environment

Shifting port usage to Yokkaichi Port to
reduce CO2 emissions

KuwanaExport Distribution
CenterTargetResults

CO2 emissions from truck transport（kg/km）
0.600

0.583
0.583

0.568

0.568

0.561

0.554 0.554
0.560

0.550

0.554
0.548
0.539

0.542

0.536

0.535
0.531

0.524

0.521
0.513
0.495

0.500

0

1998

2002 2003 2004 2005 2006 2007 2008 2009 2010

(FY)

Green power certificate

NTN Re port 201048

Efforts to Reduce Waste

Promoting zero emissions to realize a recycling society

Zero Emissions

Proper Processing of PCB Devices

Achieved zero emissions with a domestic
recycle rate of 99.9%

Properly discarding of PCB devices

The NTN group defines zero emissions as 1% or less of total
waste going to landfill, and works steadily to improve its recycling
rate. In fiscal 2009, we worked towards the goal of zero
emissions by targeting a recycle rate of 99.5% for our domestic
group companies and 96.3% for our overseas group companies.
Our domestic group companies were able to reach the target,achieving a 99.9% recycle rate, but our overseas groupcompanies achieved a recycle rate of 95.6%.
Domestically, we worked not only to increase our recycle rate
but also to reduce the amount of landfill waste, working todecrease this waste to 25 tons/month or less. We ultimately
achieved a level of 4.9 tons/month, far below the target.

Japanese law calls for the proper storage and management ofequipment and devices containing polychlorinated biphenol(PCB), and the completion of any processing for the disposal ofthese products by the end of 2016. For its part, the NTN groupproperly disposed of 59 such units in fiscal 2009. PCB was
frequently used as an insulating oil in capacitors and transformers.
Devices stored at the former Takarazuka Works, NTN Kongo
Corp., and the NTN Head Office were targeted in this latest
disposal and processing. In the future, we intend to work withother operating sites to systematically process and dispose ofdevices containing PCB.

Achieving recycling of discarded brick waste
In fiscal 2009, NTN Casting Corp. achieved a 100% recycle rate
for its brick waste, which it had previously discarded. While thecompany has for years promoted the recycling of waste sand andslag generated from the casting process, the recycling of theheat-resistant bricks used in the smelting furnaces for casting had
emerged as an issue. With the skill now developed to separate
brick waste, thus enabling collection by waste specialists, thewaste can now be put through stone crushers and pulverized foruse as road paving materials.

Hauling of PCB devices (former Takarazuka Works)

Initiatives to Prevent Air Pollution
Elimination of halon fire extinguishers
The NTN group is planning for the complete elimination of halonbased fire extinguishers by the end of 2010. Halon fire
extinguishers are most frequently used at electrical facilities but
contain CFCs, which can destroy the ozone layer. For this reason,
we have been executing plans drawn up in 1998 to completely
abolish the use of halon fire extinguishers, to be replaced with
CO2 extinguishers. Only 23 halon fire extinguishers remained at
the end of fiscal 2009.

Stone crusher

Number of remaining halon fire extinguishers

Recycle rate and Landfill waste(tons/year)
8,000

94.0

96.0

94.4

96.3

98.7

99.6

98.5

99.9

(%)

(number/year)

100

400

364
Recycle rate

Landfill waste
75

6,000

300

235
4,000

2,741

711

49

2002

25

100

0

0

2003

NTN Report 2010

2004

2005

2006

86

923
217

0

200

1,969

1,722

2,000

50

2,843

2007

2008

58

2009

(FY)

2006

2007

2008

23

Target
0

2009

2010

(FY)

Managing Environmentally
Hazardous Substances
Ensuring thorough and proper management by working
with suppliers to strengthen reporting and inspections
Green Procurement and Customer Audits
Developing internal auditing systems andaccepting customer audits*REACH: This regulation deals with the Registration, Evaluation, Authorization, andregistration of Chemicals.

Our Response to REACH
Sharing data on substances of very highconcern with suppliers
REACH is an EU regulation that came into effect in June 2007
that requires manufacturers and importers to register and evaluate
the safety of chemicals in any product used in the EU.

Reducing Substances Designated by the PRTR Law
Fulfillment beyond the targets
The NTN group works to reduce the amount of designatedchemicals that we emit and transfer into the environment—
substances that we are required by the PRTR Law to track andreport. Specifically, our fiscal 2009 goal was to achieve a 38%
reduction over the fiscal 2006 level in the use of thesesubstances, and our fiscal 2010 target is a 45% reduction. In
fiscal 2009, we were able to meet our target with a robust 55%
reduction.
Due to November 2008 amendments to the PRTR Law, thenumber of substances that we must track and manage will
increase from fiscal 2010. Because of this impending change, in
fiscal 2009 we took steps to clarify the volume of such
substances that we use.

Environment

The NTN group has established a “Green Procurement Standard”
and is working with suppliers to preserve the environment andimprove the environmental performance of products.
Promoting green procurement was a priority for ourenvironmental activities policy in fiscal 2009. Particularly to comply
with restrictions, laws, and regulations related to environmentallyhazardous substances such as the European Union’s (EU) RoHS
Directive, ELV Directive, and REACH*, we have created analyticalsystems for incoming parts and materials, and specialized internal
auditing systems for environmentally hazardous substances.
On the other hand, we also respond positively to requests forcustomer audits. In fiscal 2009, eight operating sites received
such audits related to the management of environmentallyhazardous substances. Every site passed.
One of the customers, Canon Inc., in a follow-up from two
years ago, again conducted what it calls “Canon Green
Procurement Activity Certification.” Canon performs environmental
audits of all suppliers every two years, granting certification to
those suppliers with systems for managing environmentallyhazardous substances that meet its desired criteria. Canon, as arule, conducts business only with those suppliers that receive thiscertification. The audit included both verification of substancemanagement status companywide and audits of specific sites,
and resulted in NTN having its certification renewed for anothertwo years.

In a follow up to 2008, in December 2009 the European
Chemicals Agency announced more additions to a list of 15
substances of very high concern (SVHCs) that are carcinogenic
and tend to bioaccumulate.
NTN investigated the documentation related to thesesubstances at companies that supply us with materials andcomponents. This investigation confirmed the presence ofphthalate esters, a substance announced as SVHCs in 2008, inrubber components. Suppliers have also responded that theirproducts currently contain none of the SVHCs additions
announced in December 2009 (as of June 2010). Regarding therubber components containing phthalate esters, we intend topromote the use of substitutes from the standpoint of proper risk
management.
NTN’s customers are found across a wide range of industries.
For this reason, NTN is a member of the Joint Article
Management Promotion-consortium (JAMP), an organization that
promotes a uniform investigation format applicable acrossindustries. Membership in JAMP has allowed NTN to develop aframework for responding smoothly to investigations bycustomers of our possible use of any hazardous substances.

Usage of substances designatedby the PRTR Law(tons/year)
120

114.3

114.2

100

80

69.1

60

51.7

40

20

0

Customer audits

2006

2007

2008

2009

(FY)

NTN Re port 201050

Environmental Contribution
Through Products
Promoting R&D into products that contribute to lower
environmental impact
Reducing environmental impact from the development stages
NTN places high priority in product R&D on reducing environmental impact, and strives to research and develop products driven byenvironmentally friendly technologies. The major themes of our R&D are to increase product life, and reduce weight and torque in our
primary products, particularly bearings and constant velocity joints.

NTN high-load capacity tapered roller bearings
win Encouragement Award“High-load capacity tapered roller bearings” developed by NTN
received the Encouragement Award presented at the “2009 CHO
MONODZUKURI Innovative Components Awards” sponsored by the
Conference for the Promotion of MONODZUKURI and the Nikkan
Kogyo Shimbun Ltd. These awards focus on parts and materials
that are a source of competitiveness in the field of “Monozukuri”(“manufacturing”). High-load capacity tapered roller bearings areproducts in which we increased the number of rollers to their utmost
by adopting a special cage, thus
boosting the bearing’s load carrying
capacity. The result of this morecompact size is a product that
contributes to better fuel economy invehicles, making it viable in a wide
range of global markets.

51

Product development throughmeticulous adjustments madetogether with on-site crew
Automotive Engineering Department,
Automotive Business Headquarters

Takashi Ueno
The key development point was to create a specialized retainerthat would allow us to increase the number of roller bearings
while maintaining strength. This required us at the design stage
to devise a number of ways to achieve post-assembly precision.
When it came to mass production, we took great pains to be on
the ground at operating sites to check the manufacturing
process, management methods and inspections for the retainer.
This was truly a product developed through meticulous
adjustments made in close cooperation with our on-site crew.

Low friction hub
bearings for realizing
energy savings

Low-torque thrustneedle roller bearings
reduce torque by half

Highly greased ballbearings with ability toprevent grease leakage

NTN has developed “low friction hub
bearings”, products that canconsiderably reduce the axle frictionof a car when it is moving in astraight line. The new product isdesigned to have two different radiior curvatures for the inner and outer
races along which the balls roll. This
allows the axle unit not only to offer
reduced friction during straight-line
vehicle operation, but also helps toassure durability. This innovation,
coupled with unit assembly
improvements in combination with alow-torque seal, has contributed tolowering straight-driving friction by amaximum 40% from conventional
products. Also, this invention is
expected to improve fuel efficiency
by up to 1.5%, thus making it
specifically environment friendly.

NTN has developed “low-torquethrust bearings” for automotivetransmissions that reduce rotational
torque by 50% compared toconventional products. In thrustneedle roller bearings, the rolling
distance of the rolling elements
differ for the inner and outercircumference of the bearing.
Reducing this gap helps to control
slippage loss from the rolling
elements and the raceway. The
result is a reduction in bothrotational torque and loss within thetransmission process, contributing
to better fuel efficiency for
automobiles.

NTN has developed “highly
greased ball bearings” withenhanced greasing and sealing
properties. After analyzing the
behavior of grease as bearings
rotate, we adopted a speciallyshaped bearing cage that better
controls grease flow. This
innovation has made possible anapproximately 30% increase in thevolume of grease that can besealed into bearings, effectively
doubling the life of the grease.
Furthermore, when the load on the
bearing is light, these bearings,
which are smaller than conventional
bearing types, enable longer-lasting
lubricated bearing life, leading to
the downsizing and weight
reduction of equipment.

NTN Report 2010

Third-Party Opinions

Third-Party Opinions
NTN Report 2010 Third-Party Opinions
Katsuhiko Kokubu
Integration of the Annual Report and CSR Report
The most important characteristic of this year’s report is that it combines the previously
separate CSR Report and Annual Report. President Mori starts off the report with an
explanation of NTN’s policies on business activities and CSR activities, which facilitates
understanding of the NTN Group’s activities. Unified disclosure of financial performanceand social and environmental performance is a worldwide trend, and more integrated
disclosure of this information is likely to become important in the coming years.
Reinforcement of CSR Activities
NTN has declared that CSR is the foundation that underpins corporate management
and is steadily developing its CSR mechanisms and activities. A new topic in this year’s
report is the development of a CSR database. Since it is necessary to adopt a group-

Katsuhiko Kokubu

wide approach to CSR activities, a database is likely to be an effective platform for

Biographical Information

information sharing. Reflecting CSR performance information in a database should also

Katsuhiko Kokubu is a professor atfurther enhance CSR management at NTN.

the Graduate School of Business
Administration, Kobe University.
He specializes in environmental

Identification of Key Areas

management, environmental

NTN’s report contains feature articles that disclose a number of social and environmental

accounting, and CSR management

activities in detail. Individual activities are highly important, since these can add up

and serves as chairman of Material
Flow Cost Accounting (MFCA)
Forum Japan, chairman of ISO/TC

approach involves identifying material issues and deepening activities to address those

207 Working Group 8, and a director

issues each year. Since each of the activity fields covered in the feature articles isEnvironment

to produce tremendous results. A key concept in CSR is materiality, and one CSRof the Institute for Environmental
Management Accounting, and amaterial, I hope that NTN will treat them as continuing activities included in the scope ofmember of the executive board

information disclosure, rather than only as subject matter for feature articles.

of the Society for Environmental
Economics and Policy Studies, theProactive Environmental Response

Sustainable Management Forumof Japan, the Japan Corporate

NTN vigorously engages in environmental activities and produces remarkable results. For

Social Accounting and Reporting

instance, the company establishes and strives to achieve challenging targets for total

Association, and the Japan Cost

CO2 emissions reduction. Environmental problems are simultaneously an opportunity

Accounting Association. His
published books include Material

and a risk for NTN, which numbers companies in the automotive industry among its

Flow Cost Accounting (Nikkei

important customers. I believe that the question of how to assess the environment as

Publishing Inc.) and Environmental

a risk will become an important perspective in environmental assessment in annual

Management and Accounting(Yuhikaku Publishing Co., Ltd.).

reports. Also, it may be useful to adopt resource productivity or environmental efficiency
indicators to express the environmental direction NTN should pursue.
Involvement in Stakeholder Dialogue
One important aspect of CSR activities is listening to the views of stakeholders. Since
NTN vigorously engages in activities that affect various stakeholders, as indicated in thisreport, it will likely be necessary to engage in stakeholder dialogue to further strengthen
these activities. In particular, it may be possible to discover new issues simply by
discussing how the employees feel about NTN’s CSR activities and what they hope toaccomplish. I expect NTN to increase its corporate capabilities and further contribute tosociety through its business activities by enhancing CSR activities.

NTN Re port 201052

Financial Review
Net Sales

Sales by Business Segment

Net Sales by Region(Billions of Yen)

(Billions of Yen)

(Billions of Yen)

600

600

700

500

500

600

400

400

300

300

200

200

100

100

500
400
300

0

2005 2006 2007 2008 2009 2010
(Years ended March 31)

0

200
100
0

2005 2006 2007 2008 2009 2010
(Years ended March 31)
Constant-Velocity Joints
Bearings
Precision Equipment and Other Products■ Scope of Consolidation■ Sales and Earnings

The scope of consolidation as of March 31, 2010, consisted of NTN
Corporation and 48 consolidated subsidiaries (12 domestic and 36
overseas subsidiaries). A total of 10 affiliates (all overseas affiliates)
were accounted for by the equity method. The following changes tothe scope of consolidation and application of the equity method weremade during the fiscal year under review.

• Sales Performance◆ Consolidation(2 companies removed)
NTN-NIDEC (THAILAND) Co., Ltd.
NTN-NIDEC (Zhejiang) Corporation■ Summary of Fiscal 2009
NTN’s operating environment in fiscal 2009, the year ended March
31, 2010, was severe overall. Although the domestic automobile
industry appeared to be steadily picking up, recovery was delayed insome areas of the manufacturing industry mainly due to prolonged
inventory adjustments, and the unemployment rate was also high.
Overseas, signs of recovery began to appear centered on emerging
markets such as China and India, and the Americas and European
markets gradually recovered, partly due to the benefits of economic
stimulus measures. Nevertheless, unemployment rates remained
high, as in Japan, and for this and other reasons conditions
continued to remain severe. In this environment, the NTN Group is
promoting measures that include increasing sales to the industrial
machinery sector and reducing costs, aiming to achieve business
operations that do not rely on business scale, which is an objective of
the new two-year medium-term management plan, “NTN 2010 for
The Next Step,” which started in April 2009.
Net sales: ¥452.7 billion, a year-on-year decrease of ¥74.4
billion (-14.0%)
Operating income: ¥1.4 billion (operating margin of 0.3%),
in the black over the full year
Interest-bearing debt: ¥231.6 billion, a decrease of ¥44.4 billion
from March 31, 2009
Capital expenditures: ¥21.5 billion, a year-on-year decrease of¥28.1 billion (-57.0%)
Dividend: Full-year dividend of ¥8 per share(interim dividend of ¥4 per share and year-end
dividend of ¥4 per share)

53

NTN Report 20102005 2006 2007 2008 2009 2010
(Years ended March 31)
Japan
EuropeAmericas
Asia and Other Areas

Consolidated net sales for the fiscal year ended March 31, 2010,
amounted to ¥452,746 million, a decrease of ¥74,354 million(14.1%) from the previous fiscal year. Overseas sales totaled¥296,382 million, a decrease of ¥35,870 million (10.8%) year on
year. Overseas sales accounted for 65.5% of net sales overall (theAmericas 19.9%; Europe 28.1%; and Asia and other areas 17.5%),
an increase of 2.5 percentage points from the previous fiscal year.

Sales by Business Segment
Bearings
In applications for general industrial machinery, sales decreased ineach region year on year despite some signs of brightness, especially
increases in sales of bearings used for rolling stock and aircraftmachinery, and for construction machinery in China and the Asia
region. These decreases were mainly due to a drop in worldwide
demand for bearings, and the impact of unfavorable foreignexchange rates. In automotive applications, sales increased in China
and the Asia region, assisted by the recovery of demand at
customers and the start of volume production of new products.
However, overall sales declined mainly due to the impact of
unfavorable foreign exchange rates and a decrease in demand inJapan. As a result, segment sales for the fiscal year under review fell
16.5% year on year to ¥314,283 million.
Constant-Velocity Joints (CVJs)
Sales of CVJs in Europe and China increased, mainly due to thecontributions from recovery of customer demand and the start ofvolume production of new products. Overall sales, however,decreased due to the impact of unfavorable foreign exchange rates
and a decline in demand in other regions. As a result, net sales
decreased 7.1% from a year earlier to ¥115,656 million.
Precision equipment and other products
In the precision equipment and other products segment, sales were
impacted by customers’ curbs on capital investment. For this andother reasons, segment net sales for the fiscal year under review
decreased 13.2% from a year earlier to ¥22,807 million.

Sales by Region
Japan
Sales in both general industrial machinery and automotive
applications dropped mainly due to declines in overall demand,
although sales of large bearings for maintenance and repair

Operating Income/Operating Margin（％）(Billions of Yen)

50

10

40

8

Net Income (Loss)/
Ratio of Net Income (Loss) to Sales（％）(Billions of Yen)

30

6

20

4

Capital Expenditures and Depreciation(Billions of Yen)

60

50

40
30

6

20

4

10

2

0

0

30

20
10

0

2

2005 2006 2007 2008 2009 2010
Left

(Years ended March 31)
Operating income

Right

Operating margin

0

10
-10

2005 2006 2007 2008 2009 2010-20(Years ended March 31)
Left
Right

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

increased. As a result, net sales in the region decreased 19.8% froma year earlier to ¥156,364 million.
Americas
Sales in both general industrial machinery and automotive applications
fell due to declines in overall demand, including for bearings forconstruction machinery, reduced production by automakers, andunfavorable foreign exchange rates. As a result, net sales in the region
decreased 17.6% from a year earlier to ¥90,017 million.
EuropeSales in both general industrial machinery and automotive
applications fell due to unfavorable foreign exchange rates anddeclines in overall demand, especially for bearings for agricultural
machinery, although sales of CVJs increased mainly due to thecontributions from recovery of customer demand for automotive
applications and the start of volume production of new products. As
a result, net sales in the region decreased 10.3% year on year to¥127,068 million.

(Years ended March 31)
Capital expenditures
Depreciation¥1,399 million, a decrease of ¥8,080 million (85.2%) compared withthe previous fiscal year. The operating margin declined 1.5
percentage points to 0.3%.
Other expenses amounted to a net expense of ¥3,237 million.
Major contributors to other income included ¥591 million in interestand dividend income, ¥1,132 million in amortization of negative
goodwill and ¥723 million in gain on sales of subsidiaries’ shares,
which were offset by ¥3,965 million in interest expense, ¥120 million
in losses in equity in earnings of affiliates, ¥142 million in businessreorganization expenses, ¥350 million in loss on impairment of fixed
assets, ¥1,183 million in loss on liquidation of affiliates, and ¥238
million in loss on devaluation of shares in affiliates.
As a result, the Company reported a loss before income taxes
and minority interests of ¥1,838 million, down ¥8,266 million fromthe previous year, with a consolidated net loss of ¥2,015 million,
down ¥6,970 million. Net loss per share was ¥4.00 for the fiscal
year under review.
The year-end dividend for the fiscal year under review totaled ¥4
per share. Together with the interim dividend of ¥4 per share, thedividend for the full fiscal year amounted to ¥8 per share.

■ R&D and Capital Expenditures• R&D Costs

Cost of sales amounted to ¥387,743 million, with the percentage of
cost to overall sales rising 1.1 percentage points to 85.6%. This was
mainly due to decreased sales and unfavorable foreign exchange rates.
Selling, general and administrative (SG&A) expenses amounted to¥63,604 million, with the percentage of cost to overall sales rising 0.3
percentage points to 14.0%.

In the fiscal year under review, NTN concentrated business resourcesin product development in the fields of intelligent in-wheels in
response to structural changes (electrification) of vehicles, modular
products for electric vehicles, products for the environmental market(wind power systems and rolling stock), where demand is expected
to steadily increase, and the fields of construction machinery, aircraft
and industrial machinery such as machine tools. As a result, R&D
costs for the fiscal year under review totaled ¥14,688 million (down¥2,714 million from the previous fiscal year), representing 3.2% ofconsolidated net sales. By segment, R&D costs for bearings were
¥10,410 million (down ¥1,600 million year on year); CVJ costs were
¥3,538 million (down ¥963 million); and precision equipment andother products came to ¥740 million (down ¥151 million).

• Earnings• Capital Expenditures

With earnings for the fiscal year under review, the main decrease
factors were cost levels, losses on exchange rate changes anddecreased business scale, offset by the increase factors ofdecreased business expenses, reduced labor costs, and decreased
proportional costs. As a result, operating income amounted toCapital expenditures for the fiscal year under review amounted to¥21,504 million (down ¥28,090 million from the previous fiscal year).
The main focus of expenditures was on increasing production capacity,labor savings and rationalization, maintenance and upgrading ofexisting facilities, improving safety, and R&D for new products.

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

NTN Re port 2010

Financial Section

Asia and other areas
Sales in automotive applications increased in both China and otherareas in Asia, mainly due to the contributions from recovery ofcustomer demand and the start of volume production of new
products. However, sales in general industrial machinery applications
decreased in both China and other areas in Asia mainly due to a
decline in sales for fluid dynamic bearings caused by the dissolutionof a joint venture and to the impact of unfavorable foreign exchange
rates. As a result, sales in this region decreased 2.5% year on year to¥79,297 million.

2005 2006 2007 2008 2009 201054

Financial Review

Inventories/Inventory Turnover Ratio

Interest-Bearing Debt

(Billions of Yen)

(Billions of Yen)

(Times)

150

6

300

250

4

100

200

150

2

50

100

50

0

2005 2006 2007 2008 2009 201000

2005 2006 2007 2008 2009 2010

(Years ended March 31)
Left
Right

(Years ended March 31)

Inventories
Inventory turnover ratio

In the bearings segment, capital expenditures totaled ¥17,872
million (down ¥21,454 million from the previous fiscal year).
Expenditures included new facilities and production equipment at NTN
HOUDATSUSHIMIZU CORP., increases in production equipment andexpansion of facilities at the Company’s Kuwana Works and at
AMERICAN NTN BEARING MFG. Corporation, and increases in
production equipment at S.N.R. ROULEMENTS.
In the CVJ segment, capital expenditures totaled ¥3,247 million(down ¥6,369 million from the previous fiscal year). In the precisionequipment and other products segment, capital expenditures totaled¥385 million (down ¥267 million from the previous fiscal year).
All expenditures were funded from internal funds and short-termloans. Depreciation for the fiscal year under review amounted to¥40,703 million (down ¥5,056 million from the previous fiscal year).

■ Financial Position and Cash Flows

Inventories decreased ¥13.8 billion year on
year. Interest-bearing debt decreased ¥44.4
billion year on year.
Total current assets at the fiscal year-end amounted to ¥288,726
million, an increase of ¥10,572 million, or 3.8%, from the end of theprevious fiscal year. Major factors included a ¥20,552 million increase intrade receivables and a ¥13,803 million decrease in inventories.
Property, plant and equipment, net amounted to ¥260,566 million, adecrease of ¥27,852 million, or 9.7%, from the end of the previous
fiscal year. Investments and others assets amounted to ¥69,510 million,
an increase of ¥8,469 million, or 13.9%, from the end of the previous
fiscal year. This mainly reflected an increase of ¥8,284 million in
investment securities.
As a result, total assets at March 31, 2010, amounted to ¥618,802
million, a decrease of ¥8,811 million, or 1.4%, from the end of theprevious fiscal year.
Current liabilities at the fiscal year-end were ¥265,873 million, adecrease of ¥18,473 million, or 6.5%, year on year. Major factors
included a ¥50,986 million decrease in short-term bank loans, a¥17,602 million increase in trade payables, and a ¥14,978 million
increase in the current portion of long-term debt. Long-term liabilities
decreased 8.4% or ¥12,666 million from the end of the previous fiscal
year, to ¥138,378 million, due primarily to a decrease in long-term debtof ¥7,007 million.
Total net assets at the end of the fiscal year amounted to ¥214,551
million, an increase of¥22,328 million, or 11.6%, from the previous fiscal
year-end. The primary reasons were a ¥12,007 million increase in funds

55

NTN Report 2010

due to an issue of shares (62 million shares) and an increase of ¥12,007
million in capital surplus.
The shareholders’ equity ratio was 32.2% (rising 4.0 percentage
points from a year earlier). Total net assets per share, based on thenumber of shares outstanding at the end of the fiscal year, were¥374.19 per share (a decrease of ¥2.58 per share from a year ago).
Interest-bearing debt amounted to ¥231,639 million, a decrease of¥44,357 million, or 16.1%, from the end of the previous fiscal year.
Taking into account the ¥3,051 million decrease from currency
adjustments, interest-bearing debt declined ¥41,306 million. The ratio
of interest-bearing debt to total assets was 37.4% (down 6.6
percentage points).
Net working capital was ¥22,853 million, an increase of ¥29,045
million from the end of the previous fiscal year. The current ratio was
108.6% (an improvement of 10.8 percentage points from a year earlier).
The inventory turnover ratio for the fiscal year under review was 3.57
times (down 0.18 times year on year), while the turnover ratio of total
assets was 0.73 (down 0.11 from the end of the previous fiscal year).
Net cash provided by operating activities was ¥43,970 million, a
year-on-year increase of ¥22,595 million, or 105.7%. This mainlyreflected inflows of ¥40,703 million in depreciation and amortization; a¥18,566 million increase in trade receivables; and a ¥11,165 million
decrease in inventories; which outweighed a ¥23,391 million increase intrade receivables.
Net cash used in investing activities decreased ¥37,357 million, or
59.4% year on year, to ¥25,559 million. This was due mainly to outlaysof ¥25,401 million for purchases of property, plant and equipment.
Net cash used by financing activities was ¥18,562 million, in
contrast to ¥44,551 million provided by financing activities in theprevious year. This was due mainly to inflows of ¥23,884 million fromissue of shares and ¥7,303 million from a net increase in long-termloans, which were outweighed by outflows of ¥45,447 million from a net
decrease in short-term loans.
Factoring in the ¥1,914 million increase due to the effect of
exchange rate changes, cash and cash equivalents at the end of the
fiscal year under review amounted to ¥32,759 million, an increase of¥1,763 million, or 5.7%, from the end of the previous fiscal year.
Free cash flow, the difference between net cash provided byoperating activities and net cash used in investing activities, amounted
to ¥18,411 million. The proportion of net cash provided by operating
activities to net sales was 9.7%.

Risk Factors

Business results and the financial position of the NTN Group are
subject to the following risks. It should be noted that forward-looking
statements contained in the following reflect judgments of the NTNGroup as of June 28, 2010.

ready to engage in measures to contain damage as much as
possible, risks cannot be completely eliminated. Businessperformance and the financial status of the NTN Group may beaffected by a natural disaster or by accidents.

1) Economy6) Dependence on Specific Industries

The NTN Group operates global production and sales networks, andsupplies customers in various industrial sectors. Business results andthe financial position of the NTN Group operations may be affectedby the economic conditions in specific countries and businessconditions in industries to which our customers belong.

The NTN Group’s Bearings Division derives approximately half of its
sales revenues from the automotive industry, which also accounts formore than half of sales of components that the Constant-velocity
Joints Division produces for automotive power transmission to thedrive axle. Dependence on the automotive industry is therefore high.
Although the NTN Group works to increase sales of bearings andprecision equipment products to the industrial machinery sector andimplements policies to achieve a balanced sales structure, a rapid
shift in demand in the automotive industry could potentially affect the
NTN Group’s business results and financial position.

2) Foreign Exchange Fluctuations
Overseas sales of the NTN Group account for over 50% ofconsolidated sales. This percentage is expected to increase further
due to continued acceleration in the global business development of
the NTN Group.
Overseas subsidiaries’ foreign currency-denominated businessresults and financial positions are converted to yen for the preparationof 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 expansion of
local procurement, effects of exchange rate fluctuations on businessresults 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 NTN Group works
continuously to reduce costs while developing new products of highquality and high added value, business results and the NTN Group’s
financial position may be affected by downward pressure on market
prices.

7) Product Defects
To ensure product quality, the NTN Group works to satisfy
customers’ requirements concerning product functions andspecifications, and strives to provide appropriate quality and productsafety by enforcing quality assurance globally. However, a substantial
product defect leading to a serious accident, claim for damages, or
product recall could entail huge product warranty costs andpotentially affect business 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 notpossible.

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 patentapplications to protect its rights. However, business performance andthe financial position of the NTN Group may be affected if a legal
challenge is initiated against its intellectual property or if its intellectual
property is infringed by a third party.

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

Financial Section

9) Risks Associated with Global Operations4) Rise in Raw Materials Prices

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 in emerging
economiese. Political instability in emerging economies

5) Disasters and Accidents
Production plants and facilities of the NTN Group and its transaction
counterparts are exposed to the risk of damage from natural
disasters such as earthquakes, floods, and fires. Although the NTNGroup has put into place crisis management systems and stands

NTN Re port 201056

Consolidated Balance Sheets
March 31, 2010 and 2009

Thousands of
U.S. dollars (Note 1)

Millions of yen

2010

2009

2010

Cash and cash equivalents (Note 12) ..............................................................

¥ 32,759¥ 30,996$ 352,096

Short-term investments (Note 12) ....................................................................

1,874

2,053

20,142

Notes ...........................................................................................................

6,668

6,899

71,668

Accounts .....................................................................................................

93,99973,043

1,010,307

Allowance for doubtful accounts ..................................................................

(359)

(186)

(3,858)100,308

79,756

1,078,117

126,664

140,467

1,361,393

AssetsCurrent assets:

Trade receivables (Note 12):Inventories (Note 3) .........................................................................................
Deferred income taxes (Note 19) .....................................................................

6,226

4,454

66,917

Other current assets (Note 12).........................................................................

20,895

20,428

224,581

Total current assets ............................................................................................

288,726

278,154

3,103,246

Land ...............................................................................................................

29,995

29,119322,388

Buildings and structures ..................................................................................

154,511

147,371

1,660,694

Machinery, equipment and vehicles .................................................................

620,212621,582

6,666,079

Property, plant and equipment, at cost (Notes 4, 6 and 18):

Construction in progress .................................................................................

6,583

18,19770,755

811,301

816,269

8,719,916

Less accumulated depreciation .......................................................................

(550,735)(527,851)(5,919,336)

Property, plant and equipment, net .....................................................................

260,566

288,4182,800,580

Investment securities (Notes 5 and 12) ............................................................

29,93021,646

321,690

Investments in unconsolidated subsidiaries and affiliates (Note 12) ..................

10,976

10,527

117,971

Deferred income taxes (Note 19) .....................................................................

23,12922,600248,592

Investments and other assets:

Other assets....................................................................................................

5,475

6,268

58,845

Total investments and other assets .....................................................................

69,51061,041

747,098

Total assets (Note 22) .........................................................................................

¥ 618,802¥ 627,613$ 6,650,924

See accompanying notes to the consolidated financial statements.

57

NTN Report 2010

Thousands of
U.S. dollars (Note 1)

Millions of yen

2010

2009

2010

Liabilities and net assets
Current liabilities:
Short-term bank loans (Notes 6 and 12) ..........................................................

¥ 110,407

Current portion of long-term debt (Notes 6 and 12) .........................................

26,914¥ 161,393 $ 1,186,662
11,936289,273

Notes ...........................................................................................................

10,476

10,007

112,597

Accounts ....................................................................................................

79,73162,598856,954

90,20772,605969,551

Accrued income taxes (Notes 12 and 19) ........................................................

2,637

2,389

28,343

Deferred income taxes (Note 19) .....................................................................

300

254

3,224

Trade payables (Note 12):

Other current liabilities .....................................................................................

35,40835,769380,567

Total current liabilities.......................................................................................

265,873284,3462,857,620

Long-term debt (Notes 6 and 12) ....................................................................

95,701

102,708

1,028,601

Accrued retirement benefits for employees (Note 7) .........................................

30,25832,278325,215

Reserve for product defect compensation .......................................................

1,339

1,540

14,392

Negative goodwill ............................................................................................

37

1,157

398

Deferred income taxes (Note 19) .....................................................................

3,968

3,867

42,648Long-term liabilities:

Other long-term liabilities .................................................................................

7,075

9,494

76,042

Total long-term liabilities ..................................................................................

138,378

151,044

1,487,296

Contingent liabilities (Note 9)
Net assets:
Shareholders’ equity (Note 8):
Common stock:
Authorized–1,800,000,000 shares
Issued –532,463,527 shares in 2010 and
54,34742,340584,125

67,41855,411

724,613Retained earnings (Note 23) .........................................................................

100,247

105,525

1,077,461

Treasury stock, at cost: 773,007 shares in 2010 and 750,862 shares in 2009 ....

(737)

(728)

(7,921)

Total shareholders’ equity ................................................................................

221,275

202,548

2,378,278

Net unrealized holding gain (loss) on securities (Note 5)................................

3,629

(405)

39,005

Unrealized loss from hedging instruments (Note 13) .....................................

(66)

–

(709)

Translation adjustments ...............................................................................

(25,886)(25,167)(278,225)

Total valuation and translation adjustments ......................................................

(22,323)(25,572)(239,929)

Financial Section

470,463,527 shares in 2009 .....................................................................
Capital surplus .............................................................................................

Valuation and translation adjustments:

Minority interests ............................................................................................

15,59915,247

167,659

Total net assets ..................................................................................................

214,551

192,223

2,306,008

Total liabilities and net assets .............................................................................

¥ 618,802¥ 627,613 $ 6,650,924

NTN Re port 201058

Consolidated Statements of Operations
Years ended March 31, 2010 and 2009

Thousands of
U.S. dollars (Note 1)

Millions of yen

2010

2009

2010

Net sales (Note 22) .............................................................................................

¥ 452,746¥ 527,100$ 4,866,144

Cost of sales (Note 14) .......................................................................................

387,743445,253

4,167,488

Gross profit ..................................................................................................

65,003

81,847

698,656

Selling, general and administrative expenses (Note 14) .......................................

63,60472,368683,619

Operating income (Note 22) .........................................................................

1,399

9,479

15,037

Other income (expenses):
Interest and dividend income...........................................................................

591

1,059

6,352

Interest expense ..............................................................................................

(3,965)(5,310)(42,616)

Equity in (losses) earnings of affiliates ..............................................................

(120)

564

(1,290)Gain on sales of investment securities (Note 5) ................................................

–

122

–

Amortization of negative goodwill ....................................................................

1,132

1,239

12,167

Gain on sales of investments in subsidiaries ....................................................

723

–

7,771

Refund of prior year customs duties ................................................................

–

360

–

Reorganization expenses (Note 16) .................................................................

(142)(1,112)(1,526)

Loss on impairment of fixed assets (Note 4) ....................................................

(350)(3,064)(3,762)

Loss on liquidation of subsidiaries (Note 17) ....................................................

(1,183)(498)(12,715)

Loss on valuation of investments in subsidiaries and affiliates ..........................

(238)

–

(2,558)Loss on valuation of investment securities (Note 5) ..........................................

–(13,921)–

Provision of reserve for product defect compensation (Note 15) ......................

–

(600)

–

Other, net ........................................................................................................

315

1,578

3,385

(3,237)(19,583)(34,792)(1,838)(10,104)(19,755)

Loss before income taxes and minority interests ..........................................
Income taxes (Note 19):
Current ............................................................................................................

3,677

3,241

39,520

Deferred ..........................................................................................................

(5,763)(4,663)(61,941)(2,086)(1,422)(22,421)248(8,682)

2,666

Income (loss) before minority interests ..........................................................
Minority interests ................................................................................................

(2,263)(303)(24,323)

Net loss .......................................................................................................

¥ (2,015)¥ (8,985)$ (21,657)

See accompanying notes to the consolidated financial statements.

59

NTN Report 2010

Consolidated Statements of Changes in Net Assets
Years ended March 31, 2010 and 2009

Number ofshares in
issue

Balance at March 31, 2008 .. 470,463,527
Effect of changes inaccounting policies applied toforeign subsidiaries ............
–Cash dividends paid .............
–Net loss ................................
–
Effect resulting fromchanges of fiscal year end of
consolidated subsidiaries ...
–Increase due to merger ofan unconsolidated
subsidiary ..........................
–
Actuarial differences ofoverseas subsidiaries .........
–
Purchases oftreasury stock ...................
–
Sales of treasury stock ........
–
Other changes ......................
–
Balance at March 31, 2009 .. 470,463,527
Issuance of new shares ........ 62,000,000
Cash dividends paid .............
–Net loss ................................
–
Actuarial differences ofoverseas subsidiaries .........
–
Purchases of treasury stock..
–
Sales of treasury stock ........
–
Other changes ......................
–
Balance at March 31, 2010... 532,463,527

Commonstock

CapitalsurplusRetainedearnings¥42,340¥55,411¥125,049¥(723)¥(1,939)

¥ –

–
–
–

–
–
–

482
(8,917)(8,985)

–
–
–

–
–
–

–

–

(36)

–

–

–

207

–

–

–
–
–
42,34012,007––––––¥54,347

Commonstock

Minority
interests

Total net
assets¥(10,794)¥7,057¥216,401

–
–
–

–
–
–

–
–
–

482
(8,917)(8,985)

–

–

–

–

(36)

–

–

–

–

–

207

(2,275)

–

–

–

–

–

(2,275)–––55,411
12,007–––––
105,525–(4,006)(2,015)

(281)
276
–
(728)
–
–
–

–
–
1,534
(405)
–
–
–

–
–
–
–
–
–
–

–
–
(14,373)(25,167)
–
–
–

–
–
8,190
15,247
–
–
–

(281)
276
(4,649)192,223
24,014(4,006)(2,015)––––¥67,418

743–––¥100,247

–
(14)
5
–
¥(737)–––
4,034¥3,629

–
–
–
(66)
¥(66)

–
–
–
(719)
¥(25,886)

–
–
–
352
¥15,599

743
(14)
5
3,601
¥214,551

Thousands of U.S. dollars (Note 1)
Net unrealized
Treasury
holding (loss) Unrealized loss
stock,
gain onfrom hedging Translation
at costsecurities
instruments adjustments

Minority
interests

Total net
assetsCapitalsurplusRetainedearnings$455,073
129,052––$595,561 $1,134,189
129,052––(43,057)–(21,657)$(7,825)–––$(4,353)
–
–
–

–
–
–
–
$584,125

–
7,986
–
–
–
–
–
–
$724,613 $1,077,461

–
(150)
54
–
$(7,921)–––43,358$39,005$ ––––$(270,497)–––$163,876 $2,066,024–
258,104–(43,057)–(21,657)

–
–
–
–
–
–
(709)
(7,728)$(709) $(278,225)

–
7,986
–
(150)
–
54
3,783
38,704$167,659 $2,306,008

NTN Re port 2010

Financial Section

Balance at March 31, 2009 ..
Issuance of new shares ........
Cash dividends paid .............
Net loss ................................
Actuarial differences ofoverseas subsidiaries .........
Purchases of treasury stock .
Sales of treasury stock ........
Other changes ......................
Balance at March 31, 2010...

Millions of yen
Net unrealized
Treasury
holding (loss) Unrealized loss
stock,
gain onfrom hedging Translation
at costsecurities
instruments adjustments

60Consolidated Statements of Cash Flows
Years ended March 31, 2010 and 2009

Thousands of
U.S. dollars (Note 1)

Millions of yen

Cash flows from operating activities:
Loss before income taxes and minority interests .......................................................
Adjustments for:
Depreciation and amortization .................................................................................
Amortization of negative goodwill..............................................................................
Increase (decrease) in allowance for doubtful accounts ............................................
Decrease in allowance for directors’ bonuses ...........................................................
(Decrease) increase in accrued retirement benefits for employees .............................
(Decrease) increase in reserve for product defect compensation ...............................
Decrease in other current and long-term liabilities resulting from amendment of pension plans ........
Interest and dividend income ....................................................................................
Interest expense .......................................................................................................
Translation adjustments and foreign exchange loss, net ............................................
Equity in losses (earnings) of affiliates .......................................................................
Gain on sales of investments in subsidiaries (Note 21) ..............................................
Loss on impairment of fixed assets ...........................................................................
Loss on valuation of investments in subsidiaries and affiliates ...................................
Loss on valuation of investment securities ................................................................
(Increase) decrease in trade receivables ....................................................................
Decrease (increase) in inventories .............................................................................
Increase (decrease) in trade payables .......................................................................
Other ........................................................................................................................
Subtotal....................................................................................................................
Interest and dividend income received ......................................................................
Interest paid .............................................................................................................
Income taxes paid ...................................................................................................
Net cash provided by operating activities ..................................................................
Cash flows from investing activities:
Decrease (increase) in short-term investments ..........................................................
Purchases of property, plant and equipment .............................................................
Purchases of other assets ........................................................................................
Proceeds from sales of property, plant and equipment..............................................
Purchases of investment securities ..........................................................................
Proceeds from sales of investment securities ...........................................................
Purchase of investments in subsidiaries ....................................................................
Purchase of investments in subsidiaries resulting in change in scope of consolidation (Note 21) .....
Proceeds from sales of investments in subsidiaries resulting in change inscope of consolidation (Note 21) ...........................................................................
Other ........................................................................................................................
Net cash used in investing activities ..........................................................................
Cash flows from financing activities:(Decrease) increase in short-term bank loans, net .....................................................
Proceeds from long-term debt ..................................................................................
Repayment of long-term debt, including current portion ...........................................
Redemption of convertible bonds with subscription rights to shares .........................
Proceeds from issuance of common stock assigned to minority shareholders ofconsolidated subsidiaries ......................................................................................
Proceeds from issuance of common stock ..............................................................
Cash dividends paid .................................................................................................
Repayments of lease obligations...............................................................................
Other ........................................................................................................................
Net cash (used in) provided by financing activities .....................................................
Effect of exchange rate changes on cash and cash equivalents ................................
Net increase (decrease) in cash and cash equivalents ...............................................
Cash and cash equivalents at beginning of the year..................................................
Increase due to merger of a unconsolidated subsidiary .............................................
Cash and cash equivalents at end of the year ...........................................................
See accompanying notes to the consolidated financial statements.

61

NTN Report 2010

2010

2009

2010

¥ (1,838)¥ (10,104)$ (19,755)

40,703(1,132)26(11)(1,620)(200)(1,978)
(591)
3,965
229
120
(723)
350
238
–
(23,391)
11,165
18,566
6,942
50,8201,136(4,303)(3,683)¥ 43,970

45,759(1,239)
(201)
(164)
74
161
(2,184)(1,059)
5,310
758
(564)
–
3,064
–
13,92145,255(14,338)(49,891)(767)
33,791
1,823(5,699)(8,540)¥ 21,375

437,479(12,167)
279(118)(17,412)(2,150)(21,260)(6,352)
42,6162,461
1,290(7,771)
3,762
2,558
–
(251,408)
120,002
199,549
74,614546,217
12,210(46,249)(39,586)$ 472,592¥ 85(25,401)(541)
25(1,900)–––¥ (1,393)(54,273)(609)
117(2,304)192(1,751)(2,988)$914(273,012)(5,815)
269(20,421)
–
–
–

2,421
(248)
(25,559)–93(62,916)

26,021(2,666)(274,710)(45,447)
19,527(12,224)–

45,29245,545(12,339)(24,519)(488,467)
209,877(131,384)––
23,884(4,006)(150)(146)(18,562)25–(8,917)–(536)
44,551–
256,707(43,057)(1,612)(1,570)(199,506)

1,914
1,763
30,996–¥ 32,759(4,704)(1,694)32,536154¥ 30,996

20,573
18,949333,147–$ 352,096

Notes to Consolidated Financial Statements
March 31, 2010

1. Basis of Preparation(d) Allowance for doubtful accounts

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.

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.

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 reclassifications of previously reported amounts have been
made to the consolidated financial statements for the year ended
March 31, 2009 to conform them to the 2010 presentation. Such
reclassifications had no effect on consolidated net assets and net loss.
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 ¥93.04 = U.S.$1.00, the exchange rate prevailing on March
31, 2010. 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 assets and liabilities of the initiallyconsolidated subsidiaries are valued at fair value as of their respective
dates of acquisition.
The financial statements of certain consolidated subsidiaries whose
fiscal year end is December 31 have been included in consolidationon the basis of a full fiscal year closing on March 31 for consolidation
purposes.

(b) Foreign currency translation

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 arereadily 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.

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 withany 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-marketable securities
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.
Effective April 1, 2008, the Company and its domestic consolidated
subsidiaries adopted the “Accounting Standard for Measurement of
Inventories” (Accounting Standards Board of Japan (“ASBJ”) Statement
No. 9 issued on July 5, 2006). This standard requires that inventories
held for sale in the ordinary course of business be measured at thelower of cost or net selling value, which is defined as the selling priceless additional estimated manufacturing costs and estimated direct
selling expenses. The replacement cost may be used in place ofthe net selling value, if appropriate. The effect of the adoption of thisstandard was immaterial to operating income and loss before income
taxes and minority interests for the year ended March 31, 2009.

(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 overseas consolidated subsidiaries to which the straight-line
method is principally applied.
The principal estimated useful lives are as follows:
Buildings and structures
Machinery, equipment and vehicles

10 to 50 years
5 to 12 years

Contributions granted by national and municipal governments are
deducted directly from the acquisition costs of the related fixed assets
as stipulated in the Corporation Tax Law of Japan. The property, plantand equipment accounts on the consolidated balance sheets at March
31, 2010 and 2009 were reduced by the following amounts:
Thousands of
U.S. dollars

Millions of yen

Land .......................
Buildings and structures...
Machinery, equipment
and vehicles ................

Financial Section

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.

(e) Short-term investments and investment securities

2010
¥ 721
501

2009
¥ 721
175

2010
$ 7,749
5,385

561

439

6,030

Effective April 1, 2008, the Company and its domestic consolidated
subsidiaries have changed the useful lives of machinery from 10 to
12 years tEffective April 1, 2008, the Company and its domestic
consolidated subsidiaries have changed the useful lives of machineryfrom 10 to 12 years to 9 to 12 years as allowed under the revisions of
the Corporation Tax Law. The effect of this change was to increase
operating income by ¥851 million and to decrease loss before income
taxes and minority interests by the same amount for the year ended
March 31, 2009 from the corresponding amounts which would havebeen recorded under the previous method.

NTN Re port 201062

(h) Accrued retirement benefits for employees(k) Goodwill and negative goodwill

Accrued retirement benefits for employees have been provided
principally at an amount calculated based on the retirement benefit
obligation and the fair value of the pension plan assets, as adjusted
for net unrecognized actuarial gain or loss and unrecognized priorservice cost. The estimated benefit is attributed to each period by thestraight-line method over the estimated years of service of the eligible
employees.

Goodwill and negative goodwill are amortized over a period of 3 years
by the straight-line method.

Prior service cost is amortized in the year in which the gain or loss
is recognized primarily by the straight-line method over a period of
principally 15 years, which is within the estimated average remaining
years of service of the eligible employees.
Net unrecognized actuarial gain or loss is amortized commencing
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.
Effective the year ended March 31, 2010, the Company and its
domestic consolidated subsidiaries have adopted “Partial Amendments
to Accounting Standard for Retirement Benefits (Part3)” (ASBJ
Statement No. 19 issued on July 31, 2008). The effect of the adoptionof this standard was nil to the unrecognized portion of unfunded
retirement benefit obligation at March 31, 2010 and consolidated
operating income and loss before income taxes and minority interests
for the year then ended.

(i) Reserve for product defect compensation
Reserve for product defect compensation is provided at an estimatedamount in order to cover the anticipated compensation.

(j) Leases
For lease transactions involving the transfer of ownership, 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 straight-line
method with a residual value of zero.
Formerly, finance lease transactions not involving the transfer ofownership were accounted for as operating leases. However, effective
the year ended March 31, 2009, the Company and its domestic
consolidated subsidiaries have adopted “Accounting Standard forLease Transactions” (ASBJ Statement No. 13 originally issued by
the First Committee of the Business Accounting Council on June 17,1993 and revised on March 30, 2007) and “Guidance on AccountingStandard for Lease Transactions” (ASBJ Guidance No. 16 originallyissued by the Accounting System Committee of the Japanese Instituteof Certified Public Accountants on January 18, 1994 and revised on
March 30, 2007). Such transactions are accounted for as ordinary
sale and purchase transactions. The effect of the adoption of thesestandards was nil to operating income and loss before income taxes
and minority interests for the year ended March 31, 2009.

(l) Research and development costs and computer software
Research and development costs are charged to income as incurred.
Expenditures relating to computer software developed for internal
use are charged to income when incurred, except if the software
is expected to contribute to the generation of income or to future
cost savings. Such expenditures are capitalized as assets and areamortized by the straight-line method over their respective estimateduseful lives, generally a 5-year period.

(m) New shares issuance costs
New shares issuance costs are charged to income as incurred.

(n) 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.

(o) 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. An interest-rate swap which meets certain conditions isaccounted for as if the interest rates applied to the interest-rate swap
had originally applied to the underlying debt.

(p) Distribution of retained earnings
Under the Corporation Law of Japan and the Company’s Articles ofIncorporation, the distribution of retained earnings with respect to agiven financial period is made by resolution of the shareholders at a
general meeting held subsequent to the close of the financial period.
The distribution of retained earnings with respect to the interim financial
period is made by resolution of the Board of Directors. The accounts
for the period do not reflect such distributions. (Refer to Note 23.)(q) Accounting standard for overseas subsidiaries
Effective the year ended March 31, 2009, the Company and its
overseas consolidated subsidiaries have adopted “Practical Solution
on Unification of Accounting Policies Applied to Foreign Subsidiaries
for the Consolidated Financial Statements” (ASBJ Practical Issues
Task Force No. 18 issued on May 17, 2006) and have made necessary
adjustments in the consolidation process. The effect of the adoptionof this standard was immaterial to operating income and loss before
income taxes and minority interest for the year ended March 31, 2009.

The Company and its domestic consolidated subsidiaries continue
to account for finance lease transactions not involving the transfer ofownership that commenced prior to April 1, 2008 as operating leases.

3. Inventories
Inventories at March 31, 2010 and 2009 consisted of the following:
Millions of yen

Finished goods ...........................................................................................................................
Work in process .........................................................................................................................
Raw materials and supplies ........................................................................................................

63

NTN Report 2010

2010
¥68,923
36,66821,073¥126,664

2009¥76,419
41,18522,863¥140,467

Thousands of
U.S. dollars

2010$740,789
394,110226,494$1,361,393

4. 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 have written 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 a related loss on impairment of fixed assets of ¥350 million ($3,762 thousand) and ¥3,064
million in the accompanying consolidated statements of operations for the years ended March 31, 2010 and 2009, respectively:
Thousands of
U.S. dollars

Millions of yen
Usage

Classification

Location

Production equipment
Production equipment
Production equipment
Production equipment
Production equipment
Production buildings and structures
Production equipment and otherMachinery and equipment
Machinery and equipment
Machinery and equipment
Machinery and equipment
Machinery and equipment
Buildings and structures
Equipment and vehicles

China .........................................
Shizuoka Prefecture ...................
France .......................................
Hyogo Prefecture and others .....
India ..........................................
Hyogo Prefecture .......................
Hyogo Prefecture .......................

2010
¥160
96
94
–
–
–
–
¥350

2009
¥ –
–
521
1,212
462
847
22
¥3,0642010$1,720
1,032
1,010
–
–
–
–
$3,762

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.
Loss on impairment of fixed assets in the amount of ¥1,033 million for the year ended March 31, 2009 which was included in the above table wasrelated to the loss resulting from the closure of TAKARAZUKA Works in Hyogo Prefecture.

5. Securities(a) Information regarding marketable securities classified as other securities at March 31, 2010 and 2009 is summarized as follows:
Millions of yen

2010

Securities whose carrying value exceeds
their acquisition costs:
Equity securities .....................................
Subtotal .................................................
Securities whose carrying value does notexceed their acquisition costs:
Equity securities .....................................
Other .....................................................
Subtotal .................................................
Total .......................................................

2009

Acquisition
costs

Carrying
value

Unrealized
gain (loss)

Acquisition
costs

Carrying
value

Unrealized
gain (loss)¥13,099
13,099¥21,388
21,388¥8,2898,289¥2,1602,160¥4,601
4,601¥2,441
2,441

6,547
7,044
13,591¥26,690

4,324
7,025
11,349¥32,737(2,223)(19)(2,242)¥6,047

16,85942
16,901¥19,061

13,762
23
13,785¥18,386(3,097)(19)(3,116)¥(675)

Thousands of U.S. dollars

2010
Carrying
value

Unrealized
gain (loss)$140,789
140,789$229,880
229,880$89,091
89,09170,36775,709146,076$286,865

46,47475,505
121,979$351,859(23,893)(204)(24,097)$64,994

Financial Section

Securities whose carrying value exceeds
their acquisition costs:
Equity securities .....................................
Subtotal .................................................
Securities whose carrying value does notexceed their acquisition costs:
Equity securities .....................................
Other .....................................................
Subtotal .................................................
Total .......................................................

Acquisition
costs

Impairment losses are recorded for securities whose fair value has declined by 50% or more, or whose fair value has declined by 30% or more, butless than 50%, if the decline is deemed to be irrecoverable.
The Company has recognized an impairment loss on devaluation of investment securities of ¥13,921 million for the year ended March 31, 2009. In
addition, no impairment losses were recognized for those investment securities whose fair values had declined by 30% or more, but less than 50%
as of March 31, 2009 because they were determined to be recoverable.

NTN Re port 201064

(b) The carrying value of non-marketable securities classified as other securities at March 31, 2010 and 2009 is summarized as follows:
Thousands of
U.S. dollars

Millions of yen

Investment securities:
Unlisted equity securities ........................................................................................................
Unlisted foreign bonds ............................................................................................................
Unlisted domestic bonds ........................................................................................................

2010

2009

2010

¥677
2,516
1,000
¥4,193

¥742
2,516
–
¥3,258$7,276
27,043
10,748$45,067(c) Sales of investment securities for the year ended March 31, 2009 are summarized as follows:
Millions of yen

Sales ..........................................................................................................................................
Aggregate gain ...........................................................................................................................

¥ 192
122

6. Short-Term Bank Loans and Long-Term Debt
Short-term bank loans principally represent short-term notes with average annual interest rates of 0.86% and 1.57% at March 31, 2010 and 2009,
respectively.
Long-term debt at March 31, 2010 and 2009 consisted of the following:Thousands of
U.S. dollars

Millions of yen

Loans from banks and other financial institutions, due through 2018,at an average annual interest rate of 2.3% ..................................................................................
2.70% unsecured bonds due 2009 ............................................................................................
0.76% unsecured bonds due 2010 ............................................................................................
1.66% unsecured bonds due 2013 ............................................................................................
Lease obligations due through 2018 ...........................................................................................
Less current portion....................................................................................................................

2010

2009

2010

¥91,232–
20,00010,000
1,383
122,615(26,914)¥95,701¥74,603
10,00020,00010,00041
114,644(11,936)¥102,708$980,567–
214,961
107,481
14,865
1,317,874(289,273)$1,028,601

Assets pledged as collateral for short-term bank loans of ¥600 million ($6,449 thousand) at March 31, 2010 were as follows:
Thousands of
U.S. dollars

Millions of yen

2010
Land .....................................................................................................................................................................
Buildings and structures .......................................................................................................................................

¥298
328
¥626

$3,203
3,525$6,728Year ending March 31,

Millions of yen

Thousands of
U.S. dollars

2011.....................................................................................................................................................................
2012.....................................................................................................................................................................
2013.....................................................................................................................................................................
2014.....................................................................................................................................................................
2015.....................................................................................................................................................................
2016 and thereafter ..............................................................................................................................................

¥26,914
19,693
13,61947,943
11,7072,739¥122,615$289,273
211,662
146,378
515,294
125,828
29,439$1,317,874

The aggregate annual maturities of long-term debt subsequent to March 31, 2010 are summarized as follows:

7. Accrued 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 determinedby reference to their basic rates of pay, length of service, and the conditions under which termination occurs. They also have defined contribution
pension plans and advance payment plan. Certain overseas consolidated subsidiaries also have defined benefit pension plans.

65

NTN Report 2010

The following table sets forth the funded and accrued status and the amounts recognized in the accompanying consolidated balance sheets at
March 31, 2010 and 2009 for the Company’s and the consolidated subsidiaries’ defined benefit pension plans:
Thousands of
U.S. dollars

Millions of yen

Retirement benefit obligation .....................................................................................................
Plan assets at fair value .............................................................................................................
Unfunded retirement benefit obligation .......................................................................................
Unrecognized actuarial loss ........................................................................................................
Unrecognized prior service cost ..................................................................................................
Net retirement benefit obligation .................................................................................................
Prepaid pension cost ..................................................................................................................
Accrued retirement benefits for employees .................................................................................

2010¥(99,147)
55,695(43,452)
14,204(985)(30,233)
25¥(30,258)

2009¥(102,168)
49,514(52,654)
21,499(1,100)(32,255)
23¥(32,278)2010$(1,065,638)
598,613(467,025)
152,666(10,587)(324,946)
269$(325,215)

The components of retirement benefit expenses for the years ended March 31, 2010 and 2009 are outlined as follows:
Thousands of
U.S. dollars

Millions of yen

Service cost................................................................................................................................
Interest cost ...............................................................................................................................
Expected return on plan assets ..................................................................................................
Amortization:
Actuarial loss ..........................................................................................................................
Prior service cost ....................................................................................................................
Retirement benefit expenses ......................................................................................................
Contributions to defined contribution pension plans....................................................................
Retirement benefit expenses.......................................................................................................

2010¥2,832
2,949(1,402)2009¥3,186
3,128(1,817)

2010$30,439
31,696(15,069)

2,070
(169)
6,280
777
¥7,057

1,287
(162)
5,622
806
¥6,42822,248(1,816)67,4988,351$75,849

The assumptions used in accounting for the defined benefit pension plans for the years ended March 31, 2010 and 2009 are a discount rate
principally of 2.6% and an expected rate of return on plan assets principally of 2.5%.

8. Shareholders’ Equity(a) The Corporation Law of Japan (the “Law”) provides that an amount equal to 10% of the amount to be disbursed as distributions of capitalsurplus (other than the capital reserve) and retained earnings (other than the legal reserve) be transferred to the capital reserve and the legal
reserve, respectively, until the sum of the capital reserve and the legal reserve equals 25% of the capital stock account. Such distributions can bemade at any time by resolution of the shareholders, or by the Board of Directors if certain conditions are met.
Retained earnings include the legal reserve provided in accordance with the provisions of the Law. The legal reserve of the Company included inretained earnings amounted to ¥8,639 million ($92,853 thousand) at March 31, 2010 and 2009.
(b) Movements in issued treasury stock during the years ended March 31, 2010 and 2009 are summarized as follows:
Number of shares
Thousands

2010
March 31, 2009

Treasury stock ................................................................................................

750,862

Increase

Decrease

35,089March 31, 2010

12,944

773,007

2009
March 31, 2008

1,059,883

603,901

Decrease

March 31, 2009

912,922750,862

Millions of yen

Thousands of
U.S. dollars

Financial Section

Treasury stock ................................................................................................

Increase

9. Contingent Liabilities
The contingent liabilities of the Company at March 31, 2010 were as follows:2010
Keep-well agreement with an affiliate, NTN de Mexico, S.A. for its loans from financial institutions ........................

¥ 154$ 1,655

NTN Re port 201066

10. Finance Leases without Covenants Transferring Ownership of Properties to Lessees
Lessees’ accounting
The following pro forma amounts represent the acquisition costs, accumulated depreciation and net book value of property leased to the Company
and its consolidated subsidiaries at March 31, 2010 and 2009, which would have been reflected in the accompanying consolidated balance sheets
if finance leases other than those which transfer the ownership of the leased property to the Company and its consolidated subsidiaries (which are
currently accounted for as operating leases) had been capitalized:
Millions of yen

2010

Buildings and structures .................................
Machinery, equipment and vehicles ................
Other assets ...................................................

2009

Acquisition
costs

Accumulated
depreciation

Net bookvalue

Acquisition
costs

Accumulated
depreciation

Net bookvalue¥2,639250
14¥2,903¥2,144178
11¥2,333

¥495
72
3
¥570

¥2,647291
19¥2,957¥2,032170
14¥2,216

¥615
121
5
¥741

Thousands of U.S. dollars

2010

Buildings and structures .................................
Machinery, equipment and vehicles ................
Other assets ...................................................

Acquisition
costs

Accumulated
depreciation

Net book
value$28,3642,687
150$31,201$23,044
1,913
118$25,075$5,320774
32$6,126

Lease payments relating to finance leases accounted for as operating leases in the accompanying consolidated financial statements amounted to¥171 million ($1,838 thousand) and ¥184 million for the years ended March 31, 2010 and 2009, respectively. Depreciation of the leased assets
computed by the straight-line method over the respective lease terms amounted to ¥171 million ($1,838 thousand) and ¥184 million for the years
ended March 31, 2010 and 2009, respectively.
Future minimum lease payments subsequent to March 31, 2010 for finance leases accounted for as operating leases are summarized as follows:Year ending March 31,

Millions of yen

Thousands of
U.S. dollars

¥146
424
¥570

$1,5694,557$6,1262011....................................................................................................................................................................
2012 and thereafter .............................................................................................................................................
Total ....................................................................................................................................................................

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, 2010 and 2009.

11. Operating Leases
Future minimum lease payments subsequent to March 31, 2010 for non-cancelable operating leases were as follows:Year ending March 31,

2011....................................................................................................................................................................
2012 and thereafter .............................................................................................................................................
Total ....................................................................................................................................................................

Millions of yen

Thousands of
U.S. dollars

¥134
1,746
¥1,880$1,44018,766$20,206

12. Financial Instruments – Fair Value
Effective the year ended March 31, 2010, the Company adopted the “Accounting Standard for Financial Instruments” (ASBJ Statement No.10
originally issued on January 11, 1999 and revised on March 10, 2008) and “Guidance on Disclosures about Fair Value of Financial Instruments”(ASBJ Guidance No.19 issued on March 10, 2008). These accounting standards require the Company to disclose the fair values of all financial
instruments.

Overview(a) Policy for financial instruments
The Company and its subsidiaries (collectively, the “Group”) raise necessary funds in accordance with management plans mainly by bankborrowings and corporate bonds in support of operations related to the manufacture and sale bearings, constant-velocity joints and precision
mechanical equipment. The Group utilizes bank borrowings for short-term operating funds, and bank borrowings and corporate bonds for longterm 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 not hold them for speculative purposes.

(b) Types of financial instruments and related risks
Trade receivables, notes and accounts receivable, 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 of stocks of the companies with which the Group has business relationships and they are exposed to fluctuation
risk of market prices.
Trade payables, notes and accounts payable, are due within one year. Certain trade payables resulting from the import of raw materials is denominatedin 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 the range of accounts receivable which are denominated in the same currencies.

67

NTN Report 2010

Loans and corporate bonds are mainly utilized for business operations of the Group. Short-term loans are mainly utilized for financing of operating
activities. Long-term loans and corporate bonds are mainly utilized for capital investments and financing. These have maturity dates of less than
8 years, at the longest, subsequent to March 31, 2010. Certain loans are exposed to fluctuation risk of interest rates due to floating rates and thisrisk is hedged by interest rate swap agreements.
The Group has a policy to utilize derivative transactions involving forward foreign currency exchange contracts, currency option agreements,
currency swap agreements, interest swap agreements and interest option agreements for the purpose of avoiding future fluctuation risk of foreign
currencies trade receivables and payables and mitigating future fluctuation risk of interest rate of loans and corporate bonds. The Group utilized
forward foreign currency exchange contracts and interest rate swap agreements for the year ended March 31, 2010. Refer to “(o) Derivative
financial instruments and hedging activities” in Note 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 and tries 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 convertible deposits with high credit ratings, up to a limited amount, which isapproved by the Group.
The Group believes credit risk of derivative transactions is almost nil because counter parties are financial institutions with high credit ratings.
(ii) Monitoring of market risks (the risks arising from fluctuations in foreign 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 Group utilizes forward foreign currency exchange contracts for forecasted exporttransactions with a maximum period of 6 months.
The Group utilizes interest rate swap agreements to mitigate fluctuation risk of interest rates.
The Group continuously reviews securities holdings by monitoring periodically the market value and financial condition of securities’ issuers(companies with business relationships with the Group) and by evaluating those relationships.
The Group has established policies which include maximum upper limits and reporting obligations for derivative transactions and comply fully withthese guidelines. Derivative transactions are entered into by the Company’s Financial HQ. and certain consolidated subsidiaries. The Company
carries out mutual supervision and monitoring of the derivative transactions in accordance with management policies and its consolidated
subsidiaries apply the same approach. Each derivative transaction of the Company is reported to the director responsible when entered into. The
consolidated subsidiaries are required to report the status of their open derivatives positions to the Company on a monthly basis and are also
required to consult with the Company when they enter into derivative transactions other than forward foreign currency exchange contracts.
(iii) Monitoring of liquidity risk (the risk that the Group may not be able to meet its obligations on scheduled due dates)
The Group manages liquidity risk with the responsible section preparing and updating cash flow plans and keeping necessary funds based onreports of each section.
Syndicated loans have certain financial covenants that represent a liquidity risk from an early repayment request by financial institutions.
(vi) 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, fair value
is reasonably estimated. Since various assumptions and factors are reflected in estimating the fair value, different assumptions and factors could
result in different fair value. In addition, the notional amounts of derivatives in Note 13 “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 sheet as of March 31, 2010 and unrealized gains (losses) are shown in thefollowing table. The table does not include financial instruments for which it is extremely difficult to determine the fair value. (Please refer to Note 2
below).
Millions of yen

Thousands of U.S. dollars
Financial Section

2010
Carrying value

Fair value

Difference

Carrying value

Fair value

Difference¥32,759
1,874
100,667
25,737¥32,759
1,874
100,667
25,740¥ –––3$352,096
20,142
1,081,975
276,623$352,096
20,142
1,081,975
276,655

$ –
–
–
32

304
¥161,341
90,207
110,407
26,732
2,637
94,500¥324,483¥(269)

304¥161,344
90,207
110,407
26,744
2,637
95,851¥325,846¥(269)

–
¥3
–
–
12
–
1,351
¥1,363¥ –

3,268$1,734,104
969,551
1,186,662
287,317
28,343
1,015,692$3,487,565$(2,891)

3,268$1,734,136
969,551
1,186,662
287,446
28,343
1,030,213$3,502,215$(2,891)

–
$32
–
–
129
–
14,521$14,650
$ –

(1)
(2)
(3)
(4)
(5)

Cash and cash equivalents.......................
Short-term investments ............................
Trade receivables ....................................
Investment securities ................................
Short-term loans receivable included
in other current assets ..............................
Total Assets ....................................................
(6) Trade payables .........................................
(7) Short-term bank loans..............................
(8) Current portion of long-term debt .............
(9) Accrued income taxes..............................
(10) Long-term debt ........................................
Total Liabilities ................................................
Derivatives(*) ...................................................

* Assets and liabilities arising from derivatives are shown at net value with the amount in parentheses representing net liability position.
Note 1: Methods to determine the fair value of financial instruments and other matters related to securities and derivative transactions(1) Cash and cash equivalents, (2) Short-term investments, (3) Trade receivables and (5) Short-term loans receivable included in other current assets
Since these items are settled in a short time period, their carrying value approximates fair value.
(4) Investment securities
The fair value of stocks is based on quoted market prices.

NTN Re port 201068

(6) Trade payables, (7) Short-term bank loans and (9) Accrued income taxes
Since these items are settled in a short time period, their carrying value approximates fair value.
(8) Current portion of long-term debts and (10) Long-term debts
Long-term debts are composed of long-term loans and corporate bonds. The fair market value of corporate bonds is based on quoted market prices. The fair value of long-term debt isbased on the present value of the total of principal and interest discounted by the interest rate to be applied assuming new loans under the similar conditions to existing loans are made.
Floating interest rates for certain long-term loans were hedged by interest rate swap agreements and accounted for as loans with fixed interest rates. The fair value of those long-term loans
is based on the present value of the total of principals, interests and net cash flows of swap agreements discounted by the interest rates to be applied assuming new loans under similar
conditions are made.
Derivatives Transactions
Please refer to Note 13 “Derivative Financial Instruments and Hedging Activities” section of Notes to Consolidated Financial Statements.
Note 2: Financial instruments for which it is extremely difficult to determine the fair value were as follows:

Thousands of
U.S. dollars

Millions of yen

2010
Unlisted stocks Stocks of subsidiaries and affiliates ..............................................................................................
Other ....................................................................................................................................................................
Unlisted foreign bonds ..........................................................................................................................................
Unlisted domestic bonds ......................................................................................................................................
Total .....................................................................................................................................................................

¥10,976
677
2,516
1,000
¥15,169$117,971
7,276
27,042
10,748$163,037

Because no quoted market price is available and it is extremely difficult to determine the fair value, the above financial instruments are not includedin the preceding table.
Note 3: Redemption schedule for receivables and marketable securities with maturities at March 31, 2010 is as follows:

Millions of yen

2010
Withinone year

Cash and cash equivalents .................................................................................
Short-term investments ......................................................................................
Trade receivables ................................................................................................
Short-term loans receivable included in other current assets...............................
Total ...................................................................................................................

¥32,759
1,874
100,667304¥135,604

More than one year More than five years
and within five years and within ten years

¥ –
–
–
–
¥ –

More thanten years

¥ –
–
–
–
¥ –

¥ –
–
–
–
¥ –

Thousands of U.S. dollars

2010
Withinone year

Cash and cash equivalents ................................................................................. $352,096
Short-term investments ......................................................................................
20,142
Trade receivables ................................................................................................ 1,081,975
Short-term loans receivable included in other current assets...............................
3,268
Total ................................................................................................................... $1,457,481

More than one year More than five years
and within five years and within ten years

$ –
–
–
–
$ –

More thanten years

$ –
–
–
–
$ –

$ –
–
–
–
$ –

Note 4: The redemption schedule for long-term debt is disclosed in Note 6 “Short-Term Bank Loans and Long-Term Debt” section of Notes to Consolidated Financial Statements.

13. 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, 2010 issummarized as follows:

Currency-related transactions
Millions of yen

2010
Classification

Over-the-counter transactions

Transaction

Notional amount

Forward foreign currencyexchange contracts Selling:
U.S. Dollars...................................................................
EURO ...........................................................................
Thai Baht ......................................................................
Canadian Dollars...........................................................
Great Britain Pounds.....................................................
Total .................................................................................

¥10,963
5,586
1,763
378
154
¥18,844

Fair value

Valuation gain
(loss)¥(230)
166
(81)
(14)
0
¥(159)¥(230)
166
(81)
(14)
0
¥(159)

Thousands of U.S. dollars

2010Classification

Over-the-counter transactions

Transaction

Notional amount

Fair value

Valuation gain
(loss)

Forward foreign currencyexchange contracts Selling:
U.S. Dollars...................................................................
EURO ...........................................................................
Thai Baht ......................................................................
Canadian Dollars...........................................................
Great Britain Pounds.....................................................
Total .................................................................................

$117,831
60,03918,9494,063
1,655$202,537$(2,472)
1,784
(871)
(150)
0
$(1,709)$(2,472)
1,784
(871)
(150)
0
$(1,709)

The fair value of forward foreign currency exchange contracts are computed using prices provided by counter party financial institutions. The
amount of contract more than one year has not been presented because it is nil.

69

NTN Report 2010

(b) Derivative transactions to which hedge accounting is applied
The estimated fair value of the derivatives positions outstanding which qualify for deferral hedge accounting at March 31, 2010 is summarized asfollows:

Currency-related transactions
Millions of yen

Thousands of U.S. dollars

2010
Method ofhedge accounting

Deferral hedge

Transaction

Major hedged item

Forward foreign currency
exchange contracts
Investment in affiliates
Buy:EURO ......................................................................
Total ................................................................................

Notional amount

Fair value¥ 5,909¥ 5,909¥ (110)¥ (110)

Notional amount

Fair value$ 63,510$ 63,510$ (1,182)$ (1,182)

The fair value of forward foreign currency exchange contracts are computed using prices provided by counter party financial institutions.
The amount of contract more than one year has not been presented because it is nil.

Interest-rate related transactions
Millions of yen

2010

Method of hedge accounting

Swap rates applied tounderlying debt

Transaction

Contractual value
More than one
Notional amountyear

Interest rate swaps
Receive / floating and pay / fixed..........................................
Total .....................................................................................

¥ 20,000¥ 20,000Fair value¥ 20,000¥ 20,000(*)(*)

Thousands of U.S. dollars

2010

Method of hedge accounting

Swap rates applied tounderlying debt

Transaction

Contract value
More than one
Notional amountyear

Interest rate swaps
Receive / floating and pay / fixed..........................................
Total .....................................................................................

$ 214,961$ 214,961

Fair value$ 214,961$ 214,961(*)(*)* Because interest rate swap agreements are accounted applying swap rates to underlying long-term debt, their fair value is included in that oflong-term debt disclosed in Note 12.

14. Research and Development Costs
Research and development costs included in cost of sales and selling, general and administrative expenses totalled ¥14,688 million ($157,868
thousand) and ¥17,402 million for the years ended March 31, 2010 and 2009, respectively.

15. Provision of Reserve for Product Defect Compensation
The Company encountered some quality-control issues related to certain products and provided a reserve of ¥600 million for the year ended March
31, 2009, which was presented as a component of other expenses in the accompanying consolidated statement of operations for the year.

16. Reorganization Expenses

Millions of yen

Loss on disposal of fixed assets .................................................................................................
Relocation expenses of equipment .............................................................................................
Other ..........................................................................................................................................

2010
¥ 131
11
–
¥ 142

2009
¥ 364
162
586
¥ 1,112Financial Section

Reorganization expenses for the years ended March 31, 2010 and 2009 consisted of the following:Thousands of
U.S. dollars

2010$ 1,408118–$ 1,526

Reorganization expenses for the year ended March 31, 2009 have included certain losses of ¥925 million in the aggregate resulting from theclosure of TAKARAZUKA Works.

17. Loss on Liquidation of Subsidiaries
On December 25, 2009, the Company’s Board of Directors’ meeting approved the liquidation of a consolidated subsidiary, NTN-BCA CORP. The
Company has recorded related losses as loss on liquidation of a subsidiary of ¥1,183 million ($12,715 thousand) in the consolidated statement ofoperations for the year ended March 31, 2010.

NTN Re port 201070

18. Closure of TAKARAZUKA Works
Upon the completion of the transfer of manufacturing activities at TAKARAZUKA Works to other factories, the Company ceased the operationof the TAKARAZUKA Works at the end of March 2009 and closed it in July 2009. Although the Company had planned to sell the site after soil
improvement work, the Company did not recognize any gain or loss on this land for the year ended March 31, 2010, because the Company could
not estimate them reasonably.

19. Income Taxes
Income taxes applicable to the Company and its domestic subsidiaries comprise corporate tax, inhabitants’ taxes and enterprise tax which, inthe aggregate, resulted in a statutory tax rate of 40.0% for the years ended March 31, 2010 and 2009. Overseas subsidiaries are subject to theincome taxes of the respective countries in which they operate.
The details of the differences between the statutory tax rate and effective tax rate for the years ended March 31, 2010 and 2009 are omitted
because the Company and consolidated subsidiaries recorded loss before income taxes and minority interests for the years.
The tax effects of temporary differences which gave rise to significant portions of the deferred tax assets and liabilities at March 31, 2010 and 2009are presented below:
Thousands of
U.S. dollars

Millions of yen

2010

2009

2010

Deferred tax assets:
Accrued retirement benefits for employees .............................................................................
Inventories .............................................................................................................................
Tax loss carryforwards ............................................................................................................
Reserve for product defect compensation ..............................................................................
Accrued expenses .................................................................................................................
Unrealized holding loss on securities .......................................................................................
Foreign tax credit ....................................................................................................................
Accrued expenses for a defined contribution pension plan......................................................
Other .....................................................................................................................................
Gross deferred tax assets ..................................................................................................
Less: valuation allowance ...................................................................................................
Total deferred tax assets .....................................................................................................

¥ 13,829
1,009
16,785
536
3,027
–
1,892
2,080
6,245
45,403(8,253)37,150¥ 14,605
2,117
10,518
616
2,539
265
–
2,862
4,685
38,207(5,892)32,315$ 148,635
10,845
180,406
5,761
32,534–
20,33522,356
67,123487,995(88,704)
399,291

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 .......................................................................................................

(8,423)(2,414)
(393)
(117)
(716)
(12,063)¥ 25,087(8,144)
–
(400)
(227)
(611)
(9,382)¥ 22,933(90,531)(25,946)(4,224)(1,258)(7,695)(129,654)$ 269,637

20. Amounts per Share
Amounts per share at March 31, 2010 and 2009 and for the years then ended were as follows:yen

Net assets ..................................................................................................................................
Net loss:
Basic ......................................................................................................................................
Cash dividends .......................................................................................................................

U.S. dollars

2010¥ 374.19

2009¥ 376.77

2010$ 4.02

4.00
8.00

19.14
13.00

0.04
0.09

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 the weightedaverage number of shares of common stock outstanding during the year. Diluted net income per share has not been presented because there are
no dilutive potential of shares of common stock for the year ended March 31, 2010, and the Company and consolidated subsidiaries recorded a
net loss for the years ended March 31, 2010 and 2009.
Cash dividends per share represent the cash dividends proposed by the Board of Directors as applicable to the respective years together with theinterim cash dividends paid.

71

NTN Report 2010

21. Supplementary Cash Flow Information
The assets and liabilities of NTN-NIDEC (THAILAND) CO.,LTD. and NTN-NIDEC (ZHEJIANG) CORPORATION at the time they were excluded fromthe scope of consolidation during the year ended March 31, 2010 because of the Company’s sales of investments in these subsidiaries, related
sales value and proceeds from sales of investments are summarized as follows:
Thousands of
U.S. dollars

Millions of yen

2010
Current assets ......................................................................................................................................................
Fixed assets .........................................................................................................................................................
Current liabilities ...................................................................................................................................................
Long-term liabilities ...............................................................................................................................................
Minority interests ..................................................................................................................................................
Gain on sales of investments in subsidiaries ........................................................................................................
Sales value of investments in subsidiaries .............................................................................................................
Cash and cash equivalents of sold subsidiaries ....................................................................................................
Proceeds from sales of investments in subsidiaries ...............................................................................................

¥ 4,157
4,288(4,923)(2)(1,408)
723
2,835
(414)
¥ 2,421$ 44,680
46,088(52,913)(22)(15,133)
7,771
30,471(4,450)$ 26,021

The assets and liabilities of S.N.R. ROULEMENTS and its eight subsidiaries (which were initially consolidated during the year ended March 31,2009) and the relationship between the acquisition costs and the net cash flow from such acquisition are summarized as follows:
Millions of yen

Current assets ...................................................................................................................................................................................
Fixed assets ......................................................................................................................................................................................
Current liabilities ................................................................................................................................................................................
Long-term liabilities ............................................................................................................................................................................
Negative goodwill ..............................................................................................................................................................................
Minority interests ...............................................................................................................................................................................
Total acquisition cost of investments in subsidiaries ...........................................................................................................................
Previous years’ acquisition cost of investments in subsidiaries ...........................................................................................................
Acquisition cost of investments in subsidiaries during the year ...........................................................................................................
Cash and cash equivalents of acquired subsidiaries ..........................................................................................................................
Expenditure for acquisition of investments in subsidiaries ..................................................................................................................

2009¥ 53,119
31,755(49,648)(8,512)(111)(13,056)
13,547(9,437)
4,110(1,122)¥ 2,988

22. Segment Information
The Company and its consolidated subsidiaries are primarily engaged in the manufacture and sale of bearings, constant-velocity joints andprecision equipment. As more than 90% of the consolidated net sales and operating income for the years ended March 31, 2010 and 2009 weremade and more than 90% of the consolidated total assets were held in the machinery and equipment parts segment, the disclosure of businesssegment information has been omitted.

(a) Geographic segment information
Segment information by geographic area for the years ended March 31, 2010 and 2009 is summarized as follows:
Millions of yen

2010
Japan

External sales .......................... ¥ 166,818
Intersegment sales ...................
84,736
Net sales .................................. 251,554
Operating expenses ................. 263,213
Operating (loss) income ............ ¥ (11,659)
Total assets .............................. ¥ 430,145

America

Europe¥ 86,819
2,187
89,00688,299¥ 707¥ 107,569¥ 134,247
2,749
136,996
132,889¥ 4,107¥ 115,776

Total

Eliminations or
corporate

Consolidated¥ 64,862
5,104
69,96662,800¥ 7,166¥ 63,325¥ 452,746
94,776
547,522547,201¥ 321¥ 716,815¥–(94,776)(94,776)(95,854)¥ 1,078¥ (98,013)¥ 452,746–
452,746
451,347¥ 1,399¥ 618,802

Asia andother areas

Total

Eliminations or
corporate

Consolidated¥ 64,377
6,221
70,59865,239¥ 5,359¥ 65,848¥ 527,100
112,125
639,225
633,094¥ 6,131¥ 725,597¥–(112,125)(112,125)(115,473)¥ 3,348¥ (97,984)¥ 527,100–
527,100
517,621¥ 9,479¥ 627,613

Financial Section

Asia andother areas

Millions of yen

2009
Japan

External sales .......................... ¥ 210,266
Intersegment sales ................... 101,618
Net sales .................................. 311,884
Operating expenses ................. 313,541
Operating (loss) income ............ ¥ (1,657)
Total assets .............................. ¥ 430,046

America

Europe¥ 103,242
1,678
104,920
105,068¥ (148)¥ 109,123¥ 149,215
2,608
151,823
149,246¥ 2,577¥ 120,580

NTN Re port 201072

Thousands of U.S. dollars

2010
Japan

External sales ..........................$ 1,792,971
Intersegment sales ................... 910,748
Net sales .................................. 2,703,719
Operating expenses ................. 2,829,031
Operating (loss) income ............ $ (125,312)
Total assets ..............................$ 4,623,226

America

Europe$ 933,136
23,506956,642
949,043$ 7,599$ 1,156,159$ 1,442,896
29,546
1,472,442
1,428,300$ 44,142$ 1,244,368

Asia andother areas$ 697,141
54,858751,999
674,978$ 77,021$ 680,621

Total

Eliminations or
corporate

Consolidated$ 4,866,144
1,018,658
5,884,802
5,881,352$ 3,450$ 7,704,374$–(1,018,658)(1,018,658)(1,030,245)$ 11,587$ (1,053,450)$ 4,866,144–
4,866,144
4,851,107$ 15,037$ 6,650,924

As described in Note 2(g), effective April 1, 2008, the Company and its domestic consolidated subsidiaries have changed the useful lives ofmachinery from 10 to 12 years to 9 to 12 years as allowed under the revisions of the Corporation Tax Law.
The effect of this change was to decrease operating expenses and operating loss in the “Japan” segment by ¥851 million for the year ended March
31, 2009 from the corresponding amounts which would have been recorded under the previous method.

(b) Overseas sales
Overseas sales, which include export sales of the Company and its domestic consolidated subsidiaries and sales (other than exports to Japan) of
the overseas consolidated subsidiaries, for the years ended March 31, 2010 and 2009 are summarized as follows:
Millions of yen
2010

Overseas sales .......................................................................................................
Consolidated net sales ...........................................................................................
Overseas sales as a percentage of consolidated net sales ......................................

America

EuropeAsia andother areas¥ 90,017¥ 127,068¥ 79,297

19.9%

28.1%

17.5%

Total

¥ 296,382
452,746
65.5%

Millions of yen
2009
America

Overseas sales ....................................................................................................... ¥ 109,289
Consolidated net sales ...........................................................................................
Overseas sales as a percentage of consolidated net sales ......................................
20.7%

EuropeAsia andother areas¥ 141,674¥ 81,289

26.9%

15.4%

Total

¥ 332,252
527,100
63.0%

Thousands of U.S. dollars
2010

Overseas sales .......................................................................................................
Consolidated net sales ...........................................................................................

America

EuropeAsia andother areas$ 967,509$ 1,365,735$ 852,289

Total$ 3,185,533
4,866,144

23. Subsequent Events(a) Cash dividends
The following distribution of retained earnings of the Company, which has not been reflected in the accompanying consolidated financial statements
for the year ended March 31, 2010, was approved at the annual general meeting of the shareholders held on June 25, 2010:

Year-end cash dividends (¥4.0 (U.S.$0.04) per share) ..............................................................................................

Millions of yen

Thousands of
U.S. dollars¥ 2,127$ 22,861(b) Establishment of a significant subsidiary
On May 11, 2010, the Board of Directors’ meeting of the Company approved the establishment of a subsidiary, NTN do Brasil Produção de
Semi-Eixos Ltda., in São Paulo, Brazil to respond to growing demand for automotive products in developing countries. It will manufacture andsell products related to constant-velocity joints. Its establishment date was on May 21, 2010. The investment amount for the Company and its
overseas consolidated subsidiary, NTN TRANSMISSIONS EUROPE was 35,420 thousand Brazilian real in aggregate. It is jointly owned by theCompany and NTN TRANSMISSIONS EUROPE and ownership ratios are 70% and 30%, respectively.

(c) Sales of Investments in Securities
At the Board of Directors’ meeting of the Company held on June 23, 2010, it was resolved that the Company would sell certain investments insecurities during the two year period from August 2010. The Company expects a gain on these sales of investments in securities of approximately¥3,000 million ($32,244 thousand).

73

NTN Report 2010

Report of Independent Auditors

Report of Independent Auditors

The Board of Directors
NTN Corporation
We have audited the accompanying consolidated balance sheets of NTN Corporation and consolidated
subsidiaries as of March 31, 2010 and 2009, and the related consolidated statements of operations, changes
in net assets, and cash flows for the years then ended, all expressed in yen. These financial statements are
the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated
financial position of NTN Corporation and consolidated subsidiaries at March 31, 2010 and 2009, and theconsolidated results of their operations and their cash flows for the years then ended in conformity withaccounting principles generally accepted in Japan.
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended
March 31, 2010 are presented solely for convenience. Our audit also included the translation of yen amounts
Financial Section

into U.S. dollar amounts and, in our opinion, such translation has been made on the basis described in Note 1.

Osaka, Japan
June 28, 2010

NTN Re port 201074

NTN Group Investment Holdings
As of March 31, 2010

Consolidated Subsidiaries

Paid-in Capital

Holding as percentage (%)

Consolidated Subsidiaries¥480,000,000
NTN BEARING SERVICE CO., LTD. ..............................................................
NTN KONGO CORP. ....................................................................................
¥1,000,000,000
NTN ENGINEERING PLASTICS CORP. .........................................................
¥100,000,000
NTN POWDER METAL CORP. ......................................................................
¥400,000,000
NTN MIKUMO COMPANY LTD. ....................................................................
¥450,000,000
NTN CASTING CORP. ..................................................................................
¥450,000,000
NTN KINAN CORP. .......................................................................................
¥450,000,000
NTN MIE CORP. ...........................................................................................
¥3,000,000,000
NTN OMAEZAKI CORP. ................................................................................
¥266,000,000
NTN KAMIINA CORP. ...................................................................................
¥725,000,000
NTN FUKUROI CORP. ..................................................................................
¥1,500,000,000
NTN HOUDATSUSHIMIZU CORP. ................................................................
¥1,250,000,000
NTN USA CORP. . .........................................................................................
US.$118,620,000
NTN BEARING CORP.OF AMERICA .............................................................
US.$24,700,000
NTN DRIVESHAFT, INC. ...............................................................................
US.$54,580,000
AMERICAN NTN BEARING MFG.CORP. ......................................................
US.$24,330,000
NTN-BOWER CORP. ....................................................................................
US.$67,000,000
NTN-BCA CORP. ..........................................................................................
US.$16,000,000
NTK PRECISION AXLE CORP. ......................................................................
US.$15,000,000
NTN BEARING CORP.OF CANADA LTD. ......................................................
CAN.$20,100,000
NTN SUDAMERICANA, S.A. .........................................................................
US.$700,000
NTN WÄLZLAGER (EUROPA) G.m.b.H. ........................................................
EURO14,500,000
NTN KUGELLAGERFABRIK (DEUTSCHLAND) G.m.b.H. ..............................
EURO18,500,000
NTE Gardelegen G.m.b.H. ............................................................................
EURO1,500,000
NTN BEARINGS (UK) LTD. . ..........................................................................
STG.£2,600,000
NTN FRANCE ...............................................................................................
EURO3,700,000
NTN Transmissions Europe ...........................................................................
EURO71,727,792
NTN TRANSMISSINONS EUROPE CREZANCY ...........................................
EURO2,537,000
S.N.R. ROULEMENTS ..................................................................................
EURO10,065,000
NTN BEARING-SINGAPORE (PTE) LTD. .......................................................
S.$36,000,000
NTN CHINA LTD. ..........................................................................................
HK.$2,500,000
NTN BEARING-THAILAND CO., LTD. ...........................................................
BAHT780,000,000
NTN MANUFACTURING (THAILAND) CO., LTD. ........................................... BAHT1,311,000,000
NTN Manufacturing India Private LTD. ..........................................................
INR925,000,000
NTN BEARING-MALAYSIA SDN.BHD. ..........................................................
M.$10,000,000
NTN KOREA CO., LTD. ................................................................................
WON500,000,000
NTN (CHINA) INVESTMENT CORPORATION ................................................
US.$40,000,000
SHANGHAI NTN CORP. ...............................................................................
US.$67,900,000
GUANGZHOU NTN-YULON DRIVETRAIN CO., LTD. ....................................
US.$12,500,000
CHANGZHOU NTN-GUANGYANG CORP. ....................................................
US.$28,440,000

100
100
100
100
100
100
100
100
97.4
80
100
100
100
100
100
100
100
100
60
100
100
100
100
100
100
99.999
100
100
51
100
100
100
99.999
86.49
60
100
100
95
60
100

Affiliated Companies Accounted for by the Equity Method
TUNG PEI INDUSTRIAL CO., LTD. ...............................................................
NT.$1,257,232,620
NT.$160,000,000
TAIWAY LTD. ................................................................................................
UNIDRIVE PTY. LTD. .....................................................................................
A.$5,000,000
BEIJING NTN-SEOHAN DRIVESHAFT CO., LTD. .........................................
US.$6,000,000
ASAHI FORGE OF AMERICA CORP. ............................................................
US.$7,100,000
IFA-Antriebstechnik G.m.b.H. .......................................................................
EURO50,000
Seohan-NTN Driveshaft USA CORP. .............................................................
US.$6,000,000
Nanjing Puzhen NTN Railway Bearing Co., Ltd. ............................................
US.$6,600,000
Seohan-NTN Bearing CO., LTD. ............................................................
WON10,000,000,000

27.35
36.25
40
40
28.2
25
49
40
49

(100)
(100)
(100)
(100)
(100)
(60)

(0.04)(0.006)(100)(0.969)(99.999)(99.999)(0.01)(60)(38.55)(12)(6.67)(28.2)(40)

1. Of the above consolidated subsidiaries, NTN USA CORP., NTN DRIVESHAFT, INC., NTN-BOWER CORP., NTN TRANSMISSIONS EUROPE, and SHANGHAI NTN CORP. are specified
subsidiaries.
2. Figures in curved brackets under “Holding as percentage” indicate the percentage of indirectly owned holdings, and are included in the total holding.

75

NTN Report 2010

NTN’s Global Network
As of March 31, 2010

JAPAN

THE AMERICASHead Office
3-17, 1-chome, Kyomachibori, Nishi-ku,
Osaka 550-0003, Japan
Phone: +81-6-6443-5001

NTN Powder Metal Corp.
101 Katsutaba, Kanieshinden, Kanie-cho,Ama-gun, Aichi 497-8541, Japan
Phone: +81-567-95-3913

Sales
Automotive Business Headquarters
Industrial Business Headquarters
6th Floor, TOC Bldg., 22-17, 7-chome,
Nishi-Gotanda, Shinagawa-ku,
Tokyo 141-0031, Japan
Phone: +81-3-5487-2826

NTN Mikumo Company Ltd.
750-1 Onoe, Matsusaka-shi,Mie 515-2109, Japan
Phone: +81-598-56-3311

Precision Equipment Division
6th Floor, TOC Bldg., 22-17, 7-chome,
Nishi-Gotanda, Shinagawa-ku,
Tokyo 141-0031, Japan
Phone: +81-3-5487-2867
Fluid Dynamic Bearing Division
101 Katsutaba, Kanieshinden, Kanie-cho,Ama-gun, Aichi 497-8541, Japan
Phone: +81-567-95-5005
NTN Bearing Service Co., Ltd.
1-13, 3-chome, Shibakoen, Minato-ku,
Tokyo 108-0074, Japan
Phone: +81-3-5776-6001

NTN Casting Corp.
475-1, Nadabun-cho, Izumo-shi,
Shimane 691-0003, Japan
Phone: +81-853-63-3108
NTN Kinan Corp.
2504-1 Ikuma, Kamitonda-cho, Nishimuro-gun,
Wakayama 649-2103, Japan
Phone: +81-739-47-1801
Hikari Seiki Industry Co., Ltd.
8 Motohigashikata, Sanmaiden-cho, Tenri-shi,
Nara 632-0046, Japan
Phone: +81-743-66-0285

Holding Company
NTN USA Corp.
1600 E. Bishop Court, P.O. Box 7604,
Mount Prospect, IL 60056-7604, U.S.A.
Phone: +1-847-298-7500
Sales
NTN Bearing Corp. of America
1600 E. Bishop Court, P.O. Box 7604,
Mount Prospect, IL 60056-7604, U.S.A.
Phone: +1-847-298-7500
NTN Bearing Corp. of Canada Ltd.
305 Courtneypark Drive West, Mississauga,
Ontario, L5W 1Y4, Canada
Phone: +1-905-564-2700
NTN-Sudamericana, S.A.
World Trade Center Panama
Calle 53 Este, Urbanización Marbella Piso
NO.16, Oficina 1601 Apartado Postal
832-0487, Panamá, Rep.de Panamá
Phone: +507-269-4777

NTN Mie Corp.
3601-25 Mizono, Tado-cho, Kuwana-shi,Mie 511-0118, Japan
Phone: +81-594-48-6711

NTN de Mexico, S.A.
Emilio cárdenas No.158 Apdo.124,
C.P. 54030, Tlalnepantla, Edo de México,
MéxicoPhone: +52-55-5390-1133

Manufacturing
Kuwana Works
2454 Aza-Tsuchijima, Oaza-Higashikata,
Kuwana-shi, Mie 511-8678, Japan
Phone: +81-594-24-1811

NTN Omaezaki Corp.
4681-3, Sakura, Omaezaki-shi,
Shizuoka 437-1604, Japan
Phone: +81-537-86-2480

NTN do Brasil Ltda.
Av. Moema, 94-9° Andar-conj, 92a94 CEP
04077-020-Indianópolis-São Paulo-SP, -Brasil
Phone: +55-11-5051-0600

Iwata Works
1578 Higashi-Kaizuka, Iwata-shi,
Shizuoka 438-8510, Japan
Phone: +81-538-37-8000

NTN Kamiina Corp.
522-2 Oaza-Nakasone, Minowa-machi,
Kamiina-gun, Nagano 399-4605, Japan
Phone: +81-265-79-7877

Manufacturing
American NTN Bearing Mfg. Corp.
Elgin Plant
1500 Holmes Road, Elgin, IL 60123, U.S.A.
Phone: +1-847-741-4545

Okayama Works
500-1 Hatakeda, Bizen-shi,
Okayama 705-8510, Japan
Phone: +81-869-66-6701

NTN Fukuroi Corp.
1959 Midori, Fukuroi-shi,
Shizuoka 437-0005, Japan
Phone: +81-538-30-1800

Schiller Park Plant
9515 Winona Avenue, Schiller Park, IL 60176,
U.S.A.
Phone: +1-847-671-5450

Nagano Works
14017-11 Oaza-Nakaminowa, Minowa-machi,
Kamiina-gun, Nagano 399-4601, Japan
Phone: +81-265-79-8888

NTN Hakui Corp.
32 Mitsuya-machi, Hakui-shi,Ishikawa 925-0024, Japan
Phone: +81-767-22-8910

Fluid Dynamic Bearing Unit Plant
101 Katsutaba, Kanieshinden, Kanie-cho,Ama-gun, Aichi 497-8541, Japan
Phone: +81-567-95-5005

NTN Houdatsushimizu Corp.
1-1 Futakuti-ho, Houdatsushimizu-cho,Hakui-gun, Ishikawa 929-1421, Japan
Phone: +81-767-22-5111

NTN-Bower Corp.
Macomb Plant
711 North Bower Road, Macomb, IL
61455-2511 U.S.A.
Phone: +1-309-833-4541

NTN Kongo Corp.
3-13, 1-chome, Kidonishi-cho,
Kawachinagano-shi, Osaka 586-0009, Japan
Phone: +81-721-53-1317

NTN Bizen Corp.
2139-2 Yamaguchi, Akaiwa-shi,
Okayama 701-2225, Japan
Phone: +81-869-57-3101

NTN Engineering Plastics Corp.
970 Oaza Ano, Toin-cho, Inabe-gun,Mie 511-0243, Japan
Phone: +81-594-76-7221

NTN Tado Corp.
1077 Yui, Tado-cho, Kuwana-shi,Mie 511-0101, Japan
Phone: +81-594-48-2383

NTN Driveshaft, Inc.
8251 South International Drive Columbus,
IN 47201 U.S.A.
Phone: +1-812-342-7000
NTK Precision Axle Corp.
741 South County Rd 200 West, Frankfort
IN 46041, U.S.A.
Phone: +1-765-656-1000

Corporate InformationNTN Shika Corp.
5-58-2 Horimatsu, Shika-machi, Hakui-gun,Ishikawa 925-0157, Japan
Phone: +81-767-38-8110

Hamilton Plant
2086 Military Street South, Hamilton, AL 35570,
U.S.A.
Phone: +1-205-921-2173

Asahi Forge of America Corp.
5030 Corporate Way Richmond, Kentucky
40475 U.S.A.
Phone: +1-859-626-4100

NTN Re port 201076

NTN’s Global Networak
As of March 31, 2010

THE AMERICASNTN Bearing Mfg. Canada(A Div. of NTN Bearing Corp. of
Canada Ltd.)
6740 Kitimat Road, Mississauga,
Ontario, L5N 1M6, Canada
Phone: +1-905-826-5500
Seohan-NTN Driveshaft USA Corp.
264 Teague Court, Auburn, AL 36832, U.S.A.
Phone: +1-334-321-3200

EUROPESales
NTN Wälzlager (Europa) GmbH
Max-Planck-Strasse 23, 40699 Erkrath,
F.R. Germany
Phone: +49-211-2508-0

Sales
NTN Bearing-Singapore (Pte) Ltd.
No.9 Clementi Loop Singapore 129812
Phone: +65-6469-8066

NTN Bearing Thailand Co., Ltd.
12th Floor, Panjathani Tower, 127/15
Nonsee Road, Chongnonsee Yannawa,
Bangkok 10120, Thailand
Phone: +66-2-681-0401
NTN Bearing‐Malaysia Sdn. Bhd.
No.2, Jalan Arkitek U 1/22,Section U1, Hicom
Glenmarie Industrial Park,40150 Shah Alam,
Selangor Darul Ehsan, Malaysia
Phone: +60-3-55696088
NTN Korea Co., Ltd.
10th Floor, Press Center, 25, Taepyeong-Ro
1-GA, Jung-Gu, Seoul 100-745, Korea
Phone: +82-2-720-3665

NTN Bearings (UK) Ltd.
Wellington Crescent, Fradley Park,
Lichfield, Staffordshire, WS13 8RZ, U.K.
Phone: +44-1543-445000

NTN-CBC (Australia) Pty. Ltd.
3, The Crescent, Kingsgrove, NSW 2208,
Australia
Phone: +61-2-99479200

NTN France S.A.
Z.L.Sabliére BP 338
Schweighouse Sur Moder 67507
Haguenau Cedex, France
Phone: +33-3-88-53-22-22

Manufacturing
NTN Manufacturing (Thailand) Co., Ltd.
111/2 Moo 4,Tambol Pluakdaeng,
Amphur Pluakdaeng, Rayong 21140, Thailand
Phone: +66-38-955-185

SNR ROULEMENTS
1, rue des Usines BP2017, 74010 Annecy,
FrancePhone: +33-4-50-65-30-00

Tung Pei Industrial Co., Ltd.
10th Floor No.142, Chung Hsiao E.Rd., Sec. 4,
Taipei, Taiwan.
Phone: +886-2-27417321
Taoyuan Plant
600 Sec. 1, Chieh-Shou Road, Pa-te City,
Taoyuan Hsien, Taiwan
Phone: +886-3-361-3151
Chungli Plant
No.7 Songjiang N. Rd., Jhongli City, Taoyuan
County 320, Taiwan
Phone: +886-3-452-6801

SNR Wälzlager GmbH
Düesseldorf Branch
Max-Plank-Str. 23, 40699 Erkrath,
F.R. Germany
Phone: +49-211-2508-0
SNR Italia
Via Riccardo Lombardi, 19/4 20153 Milan, Italy
Phone: +39-02-47-99-86-00
SNR Rodamientos Iberica S.A.
Calle Barberán N゜6, 28035 Madrid, Spain
Phone: +34-91-671-89-13

Taiway Ltd.
14, Kwang Fu Road, Hsinchu IND. Park,
Hukou 303, Hsianchu, Taiwan
Phone: +886-3-598-3601

Manufacturing
NTN Kugellagerfabrik (Deutschland) GmbHNTN Strasse 1-3, 40822 Mettmann,
F.R. Germany
Phone: +49-2104-1409-0

Unidrive Pty. Ltd.
45-49 McNaughton Road, Clayton,
Victoria 3168, Australia
P.O.Box 146 Clayton, Victoria 3168, Australia
Phone: +61-3-9542-4100

NTN Transmissions Europe
Z.A. des Trémelières Communauté Urbaine duMans 72704 Allonnes Cedex, France
Phone: +33-2-43-83-90-00

NTN NEI Manufacturing India Pvt. Ltd.
Plot No. 131, Sector-7, HSIIDC Growth Centre,
Bawal Distt. Rewari, Haryana 123501 India
Phone: +91-1284-264124

NTN Transmissions Europe Crézancy
Route de Paris, 02650 Crézancy, France
Phone: +33-3-23-71-50-00

Seohan-NTN Bearing Co., Ltd.
1084-4 Yongmyeong-Ri, Geoncheon-Eup,
Gyeongju-Si, Gyeongsangbuk-Do, Korea
780-903

IFA-Antriebstechnik Gmbh
Buschstüeck Str. 6 39638 Gardelegen, F.R.
Germany
Phone: +49-3907-777-0

77

ASIA AND OTHER AREAS

NTN Report 2010

CHINA
Sales
NTN (CHINA) Investment Corp.
Shanghai Head Office
Rm 2201, Shanghai Maxdo Centre, 8 Xingyi
Road, Changning District, Shanghai 200336,
China
Phone: +86-21-5208-1005
Beijing Branch
Unit 08, EF Floor, West Tower, LG Twin Tower,
12 Jian Guo Men Wai Yi, Chaoyang District,
Beijing, China 100022
Phone: +86-10-6568-3069
Guangzhou Branch
Rm 7306, 233 Tianhe North Road, Guangzhou
City, Guangdong Province, China 510613
Phone: +86-20-3877-2943

NTN China Ltd.
Hong Kong Office
Room 1914-15, Park-In Commercial Centre,
56 Dundas Street, Mongkok, Kowloon, Hong
Kong
Phone: +852-2385-5097
Manufacturing
Shanghai NTN Corp.
No.1666, Nanle Road, Songjiang Industrial
Zone, Songjiang, Shanghai, China 201611
Phone: +86-21-5774-8666

Guangzhou NTN-Yulon Drivetrain Co., Ltd.
No.11 Jun Da Road, East District ofGuangzhou Economic and Technological
Development Zone, Guangzhou, Guangdong
Province, China 510530
Phone: +86-20-8226-6458
NTN-RAB (Changzhou) Corp.
No.200 Chuangxin Road (ELECTRONIC
INDUSTRRIAL PARK), Changzhou, 213031
China
Phone: +86-519-8302-8880
Beijing NTN-Seohan Driveshaft Co., Ltd.
No.3 Zhengfu Road Opto-mechatronics
Industrial Park, Beijing, China 101111
Phone: +86-10-6950-7324
Shanghai Tung Pei Enterprise Co., Ltd.
No. 601, Rongle RD.(E), Songjiang Industrial
Zone,Shanghai, China 201613
Phone: +86-21-57744698
Nanjing Puzhen NTN Railway Bearing Co.,Ltd.
5 Longhu Alley, Puzhen Town, Pukou District,Nanjing City, Jiangsu, China 210031
Phone: +86-25-8584-7197

Investor Information
As of March 31, 2010

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

Investor Relations
Phone: +81-6-6449-3528
Fax: +81-6-6443-3226
E-mail: irmanager@ntn.co.jp

Shareholders by Category
Financial Instruments Firms 2.40%

Foreign Owners 17.24%

Financial Institutions
50.20%

Individuals
15.17%NTN on the Internet
NTN’s Website offers a variety of corporate
and product information, including the latest
annual report and financial results.
http://www.ntn.co.jp

Common Stock (As of March 31, 2010)
Authorized
1,800,000,000 shares
Issued and outstanding 532,463,527 shares

Other Corporations
14.97%

Tokyo Stock Price Range
Stock Price (Yen)

Nikkei Stock Average (Yen)

1,250

30,0001,000

25,000750

20,000500

15,000250

10,000

Number of Shareholders (As of March 31, 2010)
29,431

Transfer Agent for Common Stock
Mitsubishi UFJ Trust Banking Corporation
4-5, 1-chome, Marunouchi, Chiyoda-ku,
Tokyo 100-8212, Japan

Stock Exchange Listings
First Section of Tokyo Stock Exchange (#6472)
First Section of Osaka Securities Exchange (#6472)

0Independent Accountants

High
Low

Ernst & Young ShinNihon LLC

General Meeting of Shareholders
The General Meeting of Shareholders washeld on June 25, 2010 in Osaka

Stock Price Range in Fiscal 2009
High: ¥408
Low: ¥337

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
08
09
10
Closing
Opening

Opening
Closing

5,000

Nikkei stock averageMonthly Volume Traded (Million Shares)

100
80
60
Corporate Information

40
20
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
08
09
10

NTN Re port 201078

NTN Corporation
3-17, 1-chome, Kyomachibori,
Nishi-ku, Osaka 550-0003, Japan
http://www.ntn.co.jp
This NTN Report is printed andbound with electricity generated
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Printed in Japan

This report was printed with anenvironment-friendly printing
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Soy inks have excellent
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