NTN Report2012
for the year ended
March 31, 2012

Profile

Bearings are “eco-products:” they reduce energy
consumption by supporting rotating parts—andthus lessening friction—in all kinds of machinery.
NTN is a precision equipment manufacturer that develops business worldwide with its mainstay product of bearings.
Ever since its foundation in 1918, NTN has been coming out with new products in a wide range offields including automobiles, construction machinery, aerospace, rolling stock, wind turbine, and medical equipment.

NTN products are at work in rapidly
developing growth markets

Contributing to the spread of renewable energy
to help protect the environment

Corporate Philosophy

Industrial
Machinery Market

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

Developing products thatbring high performance
to a range of machinery

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

High precision means
high rotational speed forstate-of-the-art machinery

Support for
key components ofindustrial machinery robots

High-quality products
contribute to a range of
agricultural machinery

OutlineNet Sales by Business (consolidated)

Corporate name: NTN Corporation
Trademark:
Date founded: March 1918
Head Office:3-17, 1-chome, Kyomachibori, Nishi-ku, Osaka 550-0003, Japan
Representative: Yasunobu Suzuki, Chairman and CEO
Shigeyoshi Takagi, President
Number of employees:
Consolidated: 20,789 (as of March 31, 2012)
Non-consolidated: 5,457 (as of March 31, 2012)
Fiscal term: March
Capitalization: 54.3 billion yen (as of March 31, 2012)
Net Sales:
Consolidated: 543.5 billion yen (as of March 31, 2012)
Non-consolidated: 339.2 billion yen (as of March 31, 2012)

Industrial
Machinery Market

Forward Looking Statements

1

Automotive
Market63%

20%(106.6 billion yen)·Construction
machinery·Gear boxes·Agricultural
machinery·Aerospace·Office equipment·Machine tools·Wind turbine·Rolling stock·Medical equipment·Hydrodynamic·Precision equipment
OthersFiscal year
ended
March 31, 2012543.5
(billion yen)This report contains forecasts and projections regarding NTN’s future plans, strategies, and business results.
Please understand that actual business results may vary from the projections made herein by the Company.

(342.9 billion yen)
·Axle bearings·Constant-velocity joints·Needle roller bearings
OthersAftermarket &Distributor Market

17%(94.0 billion yen)
·Equipment repair·Automotive repair parts(auto parts)
OthersWith the world’s No. 1 share of axle bearings, we earn customers’
trust with our unquestionable technological strength
Contents

Automotive Market

Meeting the needs for environmental
friendliness, safety, and comfort withcompact, light, high-performance products

With the world’s No. 2 shareof constant-velocity joints,
we meet increasing demandin growth markets

Helping spread the use ofenvironmentally friendly EVs

Profile ........................................... 1
Financial Highlights ..................... 3
To Our Stakeholders ................... 5
Interview with the
Top Management ........................ 6
Corporate Governance ............. 11
At a Glance ................................ 17
Industrial Machinery Market .... 19
Aftermarket &Distributor Market ..................... 21
Automotive Market ................... 23
Research andDevelopment System ............... 25

1
2

FeatureGrowth Strategy
in the Industrial
Machinery Market ... 27

FeatureGrowth Strategy
in the Automotive
Market ...................... 31

Social and Environmental
Responsibility ............................ 35
Third-Party Opinions ................ 59
Financial Review ....................... 60
Company andInvestor Information ................. 84

Editorial Policy
Stepping up customer support
in the industrial machinery market

Aftermarket &Distributor Market

Responding to the maintenanceneeds of end users

NTN believes the active disclosureof management plans and businessresults, as well as its basic policy forcorporate social responsibility (CSR),
CSR activities, and environmental
preservation initiatives, among otherinformation, will help garner theunderstanding and support of all
stakeholders. This “NTN Report,”
which since the fiscal year ended
March, 31 2010 has combined the“Annual Report” and the “CSR
Report,” is part of this active approach
to information disclosure.

Expand our lineup of
automotive repair parts (auto parts)

2

Financial Highlights
NTN Corporation and consolidated subsidiaries

Years ended March 31

Millions of yen (except per share amounts)

2012

2011

2010

2009

2008

¥ 543,468
20,724
16,357
5,993
54,44034,175
17,157¥ 530,056
24,56022,855
14,39929,70035,936
15,697¥ 452,746
1,399(1,838)(2,015)21,50440,702
14,687¥ 527,100
9,479(10,104)(8,985)49,59445,75917,402¥ 533,985
49,612
44,31327,43159,50439,547
15,006

Net assets/Shareholders’ equity .......................
Number of employees .......................................

¥ 693,258
212,126
20,789¥ 632,001
210,353
19,172¥ 618,802
214,551
17,959¥ 627,613
192,223
20,679¥ 629,464
216,401
18,960PER SHARE DATA
Net assets .........................................................

¥ 370.19¥ 376.05¥ 374.19¥ 376.77¥ 445.98

11.27
–
10.00

27.08
–
10.00

(4.00)–
8.00(19.14)
–
13.00

58.43
54.59
19.00

FOR THE YEAR DATA
Net sales ...........................................................
Operating income .............................................
Income (loss) before income taxes ....................
Net income (loss) ..............................................
Capital expenditures .........................................
Depreciation......................................................
R&D costs.........................................................
YEAR-END DATA
Total assets.......................................................

Net income (loss):- Basic ..............................................................
- Diluted ............................................................
Cash dividends .................................................
OTHER INFORMATION

0.9%
3.0%
28.4%

Net income (loss) /Average total assets (ROA ) ....
Net income ( loss) /Average shareholders’ equity (ROE ) ....
Shareholders’ equity ratio .................................

2.3%(0.3%)(1.1%)
32.2%

7.2%
31.6%

(1.3%)(4.3%)
28.2%

4.4%
13.1%
33.3%

U.S. dollar amounts have been converted from yen, for convenience only, using the approximate exchange rate on March 31, 2012, which was U.S.$1 = ¥82.19.

Net sales

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

600

100

500
400

Operating income
Operating margin

Net income (loss)(%)(Billions of yen)

10

30

80

8

60

6

300

10

200
100
0

2008 2009 2010 2011 2012

(Years ended March 31)

3

20

40

4

20

2

0

2008 2009 2010 2011 20120(Years ended March 31)

0−102008 2009 2010 2011 2012

(Years ended March 31)

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

Millions of yen (except per share amounts)

2007

2006

2005

2004

2003

2002

2012

¥ 483,818
46,79345,17027,014
59,34732,693
14,221¥ 434,837
37,64530,37019,55049,28428,586
14,771¥ 388,349
33,201
26,586
16,74049,67024,87014,952¥ 357,394
24,70918,181
11,032
38,092
23,97913,543¥ 342,745
20,785
6,198
2,657
25,264
23,83812,255¥ 324,339
8,140
(701)
(132)
21,08824,40011,706$ 6,612,337
252,147
199,01472,916662,368
415,805
208,748¥ 611,944
215,815
17,306¥ 561,494
183,247
14,631¥ 516,578
157,952
12,788¥ 460,341
142,487
11,885¥ 467,198
134,928
11,810¥ 462,895
138,532
11,989$ 8,434,822
2,580,922¥ 445.61¥ 396.73¥ 341.93¥ 308.27¥ 291.82¥ 299.27$ 4.50

58.34
53.74
16.00

41.94
38.55
11.00

35.83
32.94
8.50

23.54
21.87
5.50

5.70
5.51
5.00

(0.29)
–
5.50

0.14
–
0.12

4.6%
13.8%
34.2%

3.6%
11.5%
32.6%

3.4%
11.1%
30.6%

2.4%
8.0%
31.0%

0.6%
1.9%
28.9%

(0.03%)(0.1%)
29.9%

Capital expenditures/
Depreciation

Shareholders’ equity/ROE

Total assets/ROA
Total assets

ROA

900

6

300

Shareholders’ equity (%)
ROE
15

600

4

200

10

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

60

Capital expenditures
Depreciation

40
300

2

100

5

0

0

0

0

20

2008 2009 2010 2011 2012−2

(Years ended March 31)

2008 2009 2010 2011 2012−5

(Years ended March 31)

02008 2009 2010 2011 2012

(Years ended March 31)

4

To Our Stakeholders
In the fiscal year ended March 31, 2012, the Japanese
economy showed signs of a recovery from the effects of
the Great East Japan Earthquake, but tough conditions
continued, such as a slump in exports caused by the
prolonged appreciation of the yen. In terms of the global
economy, the recovery in economic conditions weakened
as a result of the effects of the flooding in Thai, the European
debt crisis and concerns about fiscal tightening in China.
Against this backdrop, the NTN Group is expanding
its business on a global scale by placing emphasis on
growth markets and, at the same time, promoting an
expansion of sales in the fields of industrial machinery,aftermarket applications. As the world’s economy
undergoes major changes in framework, we are accelerating
our strategy of “on local site with local materials by local
personnel”; in other words, a system allowing local
management by local employees using local facilities
and materials.
In June 2012, NTN and some of its former executives
were accused by the Japan Fair Trade Commission on the
grounds of violating the Japan Antimonopoly Act andindicted by the Tokyo District Public Prosecutors Office on
the same day. NTN is committed to complying with laws
and regulations, competing in a fair manner, and carryingout our business activities in an honest and ethical manner.

5

NTN would like to offer sincere apologies for any
inconvenience caused to shareholders, customers andany other person associated with NTN. NTN is taking thismatter seriously and making every effort to comply withthe applicable regulations.
NTN positions corporate social responsibility (CSR) as
the foundation of its management. We strive to fulfill our
responsibilities for quality control, information disclosure,
occupational safety and health, and community service forthe sake of our valued stakeholders: customers, suppliers,
shareholders, employees, and the citizens of regions where
we do business.
The entire NTN Group strives to reduce its environmental
impact: by developing eco-products that contribute to global
environmental protection, stepping up environmental
management systems at all sites, and reducing CO2 emissions.
We look forward to the continued support andunderstanding of our shareholders and stakeholders.
August 2012

Shigeyoshi Takagi
President

Feature: Interview with the Top Management

was the market environment and performance
Q Whatin the fiscal year ended March 31, 2012?
by negative external factors, sales
A Plagued
were up and profits were down compared tomajor measures do you plan to take
Q Whatin the fiscal year ending March 31, 2013?
will expand business in growth markets andA We
reduce costs, and we will accelerate the creation

The fiscal year ended March 31, 2012 was a year in which we
faced greater adversity than usual, including natural disasters
like the Great East Japan Earthquake and massive flooding in
Thailand, the prolonged appreciation of yen, debt crises in
Europe, and monetary restraint in China. Although the sites of
the NTN Group did not suffer damage in the earthquake andflooding, many of our customer companies, including
automobile manufacturers, were hard hit, and the result was
demand far below our original forecasts, not only in Japanbut the U.S. and China as well.
This series of negative events hurt our performance: forthe fiscal year ended March 31, 2012, net sales were 543.5
billion yen (up 2.5% over the previous fiscal year). However,operating income was 20.7 billion yen (down 15.6%) andordinary profit was 18.7 billion yen (down 11.4%). Aftercalculating a number of figures, such as a gain on fixed assets
sold of 1.2 billion yen as an extraordinary profit, a loss on
valuation of investment securities of 2.1 billion yen as an
extraordinary loss, earthquake-related expenses of 700 million
yen, and reorganization expenses of 500 million yen, net
income was 5.9 billion yen (down 58.4%).

In the fiscal year ending March 31, 2013, apprehensions about
European financial crises will slow down worldwide economic
recovery, while in Japan factors such as the strong yen andenergy shortages will keep the country in a tough businessenvironment. The NTN Group will flexibly respond to changes
in the business environment and focus on boosting profit
margins and improving business structure in order to strengthenbusiness structure.
To boost profit margins, we will accelerate our “on local sitewith local materials by local personnel” strategy, as well as
reduce costs by carrying out a fundamental review of design,materials and production processes. We also plan to achievesales expansions in industrial business and aftermarket business,thereby improving the profit ratio. We have also actively
promoted an expansion in local production, improvements in
productivity, local procurement of materials, parts and facilities,
and the import of local products to accelerate the creation of asystem that is not affected by exchange rates.
To improve our business structure, we are working to
reduce capital expenditure in a number of ways; for example,
we are revising capital expenditure so as to better respond tochanging business environments, moving our Japanesefacilities to overseas sites, and making use of less expensive
overseas facilities. We are also reducing inventory throughmeasures that include making use of systems that allow us toshorten lead time. Furthermore, with currency exchange rates
and free trade agreements (FTAs) causing major changes in
the worldwide economic framework, we are restructuring ourglobal production system and training local personnel at ourworldwide sites so that we can properly pass on NTN’s “DNA.”

the previous fiscal year.

of a system that is not affected by exchange rates.

Performance in the Fiscal Year Ended March 31, 2012

(Billions of yen)
Net sales

8.5

8.7

9.7

9.3
1.8

388.3

33.2

434.8

37.6

534.0

483.8

0.3

527.1

2006
Rapid Advance 21

Operating margin

4.6

3.8

530.1

543.5

452.7

46.8

49.6
24.6
9.5

2005

Operating income

2007

2008

2009

Growth through Creativity
and Achievements 21

20.7

1.4
2010

2011

NTN 2010 for The Next Step

Note: SNR has been included in consolidated performance since the fiscal year ended March 31, 2009.

2012(Years ended March 31)

Global Advance 2013

6

Interview with
the Top Management

We will accelerate our strategy of “on local site withlocal materials by local personnel” in growth markets.

Acceleration of Sales in China• Increase in number of sales sites and expansion of distributors• Expansion of sales to manufacturers of wind turbines,
machine tools, and construction machinery• Strengthening of production capacity• Facilitation of the NTN China Technical Center to speed up
development• Strengthening of support from Japan through theestablishment of the China Headquarters
Nanjing NTN Corporation
Start of production for industrial
machinery products

NTN-LYC
Start of production of products
for automotive products

Q What is your strategy for the Chinese market?
will increase the number of our branches andA We
distributors, as well as begin local productionof products for industrial machinery.

Demand is growing in the Chinese market, and we arestrengthening our sales force by increasing the number ofbranches and distributors, particularly in the country’s
inland regions. As of the end of March 2012, we had eight
branches and about 40 distributors, and our plan is toincrease this to 10 branches and 60 distributors (of 120
sites). In April 2012, we established the China Headquarters,
which will help us accelerate our pace of business expansion
through activities that include providing technical services
from Japan and speeding up the provision of products,
including prototypes.
In the field of industrial machinery, we are focusing on
expanding sales of products especially for wind turbines,
machine tools, and construction machinery, and we plan tostart local production of products for this field at Nanjing NTN
Corporation, which will start operations in October 2012.
In the automotive field, we teamed up with Luoyang LYC
Bearing Co., Ltd., one of China’s leading bearing manufacturers,
to form the joint venture company NTN-LYC (Luoyang)
Bearing Corporation, and we have begun producing andselling products for manufacturers in China. We will utilize
NTN-LYC’s sales network to go beyond the automotive fieldand expand our dealings with Chinese manufacturers in theindustrial machinery market and the aftermarket & distributor
market. In May 2011, we opened our NTN China TechnicalCenter, where we develop products that meet the exacting
needs of the local market.

7

NTN China
Technical Center
Shanghai
NTN Corp
Production bases
Sales sites
Technical bases

Net Sales in China(Figure shows trends in sales against 100 for the base year of the
fiscal year ended March 31, 2010)
Industrial machinery

2010

Nanjing NTN

NTN-LYC

Aftermarket & distributor

2011

2012

Automotive(Years ended March 31)

Interview with
the Top Management

is your strategy for other Asian markets
Q Whatbesides China?
will step up local integrated production of
A We
automotive products and make effective use

Net Sales in Asia Region(Figure shows trends in sales against 100 for the base year of the
fiscal year ended March 31, 2010)
Industrial machinery

Aftermarket & distributor

Automotiveof free trade agreements (FTAs).

In Asian markets outside China, we are pursuing improvements
in both sales and production.
On the sales side, in the fiscal year ended March 31, 2012,
we established sales companies in India and Indonesia.
Through these group companies, we will seek new aftermarket
customers in steel plants and mines, and focus on expanding
sales in industrial machinery fields, particularly wind turbines.
On the production side, we completed construction of thePinthong plant, our second production base in Thailand,
where we started production of constant-velocity joints in

2010

2011

2012

(Years ended March 31)

October 2012. On the site of this production base, in February
2012 we established NTPT Company Limited (NTPT), a joint
venture to carry out the production pre processes of forging
and turning. NTPT will build an integrated production system,
covering from all processes from raw materials to finishedproducts. In India, the Chennai plant, our second production
base in that country, started operation in May 2012 andproduces and sells products including constant-velocity joints
and hub bearings.
In ASEAN, countries including Korea, China, and India
have signed a free trade agreement (FTA), and we are making
the most of this agreement in a number of ways; for example,
by using raw materials made in Korea, and by exporting
half-finished products and finished products between regions
covered by the FTA.

Pinthong plant and NTPT (Image)

Expansion of Sales and Production in Asia Region• Increase of distributor network and strengthening of sales
companies• Sales expansion for plant aftermarket projects for steel, mining,etc., and wind turbines• Strengthening of production capacity• Procurement of materials and supply of half-finished products/
finished products with Thailand as a hub
Korea

To Europe
China

To Americas
India

Chennaiplant

Pinthong
plant

Thailand
Vietnam

Malaysia
Materials, parts
Half-finished products
Finished products

Indonesia

is your strategy for industrialized
Q Whatcountries in Europe and the Americas?
will focus on developing andA We
producing high-value-added products,
and we will transfer production ofmass-produced items to other regions.
In industrialized countries, we are stepping up R&D andfocusing on the production of high-value-added products, whileat the same time transferring production of mass-produced
items to other regions.
In Europe, we are increasing production capacity of
products for industrial machinery at NTN-SNR ROULEMENTS(NTN-SNR), and we are transferring production of automotive
products to Eastern Europe. Our plan is to have NTN-SNR
concentrate on high-value-added products like precision
bearings for aerospace and large bearings for wind turbines.
In the Americas, NTA Precision Axle Corp. (NTA), a joint
venture in charge of pre processes (forging, turning, heat
treatment) for hub bearings, started production in June 2011and has a local integrated production system of automotive
products. In Brazil, NTN do Brasil Produção de Semi-Eixos Ltda.

8

began mass-production of constant-velocity joints andthe company is expanding this business along withincreasingly-in-demand hub bearings.

In the automotive market, IWATA Works and OKAYAMA
Works are positioned as mother plants in Japan, and as well as
providing guidance to NTN’s worldwide plants, they specialize
in high-performance products.
To boost our compound materials business, we
strengthened ties with Nippon Kagaku Yakin Co., Ltd., inaddition to the NTN Group in September 2011, and we are
seeking a synergistic effect in the business of material
technologies such as sintered alloys and engineering plastics.
Efforts in Industrialized Countries

NTA

Q What is your strategy for Japan?
will develop and produce high-value-added
A We
products and step up the Japan factory’s role

Europe• For industrial machinery: Reinforcement of
NTN-SNR production capacity• For automotive products: Transfer production from
France to Eastern Europe

Americas• Establishment of a local integrated production
system. Shift from North America to Latin America

Japan• Provision of guidance around the world as amother plant, and production of sophisticatedfunction products• Reinforcement of production of high-value-added
products and diversification of risk

as a mother plant.

In the fiscal year ended March 31, 2012, in the Kuwana district
we increased production capacity for high-value-added
products such as precision bearings for machine tools andaerospace, and large bearings for rolling stock. As well, NTN
NOTO Corp. began production in March 2012, giving NTN
an integrated production system from pre processes tofinished products in the Noto district of Ishikawa Prefecture.
Combining this with other companies in the same district,
NTN HAKUI Corp. and NTN HOUDATSUSHIMIZU Corp., havegiven NTN increased production capacity and spread therisk for the production of bearings for industrial machinery.
And in July 2012, NTN AKAIWA Corp. in Okayama Prefecture
began mass-production of bearings for industrial machineryand automobiles.

NTN AKAIWA Corp.

Nippon Kagaku Yakin Co., Ltd.

9Q How is your EV-related business going?
are keeping a close eye on trends in the
A We
industry and aim to release EV-related products
as soon as we can.

We are positioning the EV System Division, which weestablished in April 2011, as an in-house venture group of
our organization that is working to come out with products
for next-generation EV systems as soon as possible. In October
2011, Iwata City, Shizuoka Prefecture began using converted
EVs equipped with NTN’s in-wheel motor for its official vehicles.
Road testing has begun in order to gather data on things likethe vehicles’ electricity efficiency.
NTN has also exhibited EV demo cars in various autoshows, including the Tokyo Motor Show in December 2011
and Auto China in April 2012, where the company demonstrated
these cars’ ability for “Lateral move” and “Pivot turn” thanks
to the in-wheel motor.

Tokyo Motor Show

Interview with
the Top Management

In April 2012, new road tests got underway on a two-seatercompact EV using NTN’s in-wheel motor system in Shizuoka
Prefecture. The results of these tests will allow us to use thesystem in existing products to reduce costs, as well as comeup with ideas for new products.

us about your CSR philosophy and
Q TellCSR measures?
will expand our eco-products business
A We
and work to contribute to an overallsustainable society.

NTN’s CSR-related corporate activities go beyond justeconomic contributions and encompass efforts to protect
the environment and make society a better place. We
strive to be accountable to our stakeholders and to respondto their expectations and trust. By achieving growth forour company and sustainable growth for society as awhole, we hope to maximize the corporate value of NTN
for all stakeholders.
In our environmental protection activities as well, which theentire 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. Besides helping
protect the environment through our products, we are also
conducting large-scale energy-conserving upgrades to utility
facilities, conserving energy at heat-treatment facilities byswitching fuels, and promoting effective use of natural energy
when establishing new plants by introducing solar and windturbines that are easy on the global environment.

Q What is the situation with the cartel issue?
are strengthening our compliance systems
A We
and holding regular in-house education andtraining in this matter.

We are taking these cartel charges extremely seriously:
in November 2011, we launched the Japan Antimonopoly
Act Compliance Committee in-house. With the aim ofrebuilding our systems for ensuring compliance with Japan’s
Antimonopoly Act, we are revising mechanisms for preventing
illegal acts and coming up with new regulations to ensure
these mechanisms are working. We are also holding training
sessions and other educational events to raise awarenessamong executives and employees of the importance of abiding
by laws and regulations.

In April 2012, we established the Fair Trade Monitoring
Committee to lead renewed efforts in ensuring that NTN
conducts business in a fair manner. The committee isstrengthening effective control towards ensuring legal
compliance in the sales and procurement divisions, as wellas leading and observing education and training activities.

you have a message for NTN’s
Q Do
stakeholders?
decisiveness and speed, the entire
A WithNTN Group will work together in taking
business performance to the next level.

In the fiscal year ending March 31, 2013, we believe thatfactors such as economic instability in Europe will contributeto continuing uncertainty in the business environment.
Regarding the violation of the Antimonopoly Act, it is difficultat this time to estimate its effect, in particular the impact it will
have on our business performance and our financial situation.
Against this background, it is crucial that the entire NTNGroup work together in using decisiveness and speed to takebusiness performance to the next level while keeping a close
eye on economic trends around the world.
We will also strive to not just improve business performancebut also meet stakeholder expectations for social andenvironmental responsibility. We ask you, our valued
stakeholders, for your continuing guidance and support.

10Corporate Governance

Governance System

In addition to prompt decision-making and businessexecution and strong management oversight functions, we
strive to build a system of compliance that ensures fairtrading.
Basic Approach to Corporate GovernanceA crucial part of how we run our company, our system forcorporate governance promotes efficient, solid management.
We also strive to communicate with shareholders,investors, and other stakeholders by providing information ina prompt, accurate manner. This ensures more transparent
management.
Corporate Governance Structure
Stockholder Meeting
Assigns/
Removes

Corporate
Auditors

Assigns/
Removes

AuditsBoard ofDirectors

Assigns/
RemovesAccounting
Auditors(Audit firm)

Internal Control

Fair Trade
Monitoring
Committee

Business Strategy
Committee
Executive
Committee(Other positions omitted)

Improving Our Corporate Governance Structure
NTN employs a corporate auditor-based governance system
in which three of the four corporate auditors are from outside
the company. There is a Board of Directors, which includes
two directors from outside the company for improved

Internal Control System Placement and Operation
NTN Corporation has put in place and operates an internal
control system that covers financial reporting in accordancewith the basic framework for internal control set forth in “On
the Setting of the Standards and Practice Standards forManagement Assessments and Audits Concerning Internal
Control Over Financial Reporting (Council Opinions)”
published by the Business Accounting Council.
The Internal Audit and Test Department is responsible forinternal audits, and has been established as an independent
auditing organization to audit business execution throughout
the Company.

Board of Directors:

Corporate Auditors:

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

NTN has four corporate auditors, two of who are standing auditors(with three of the four being outside auditors). The auditors are
responsible for auditing the performance of duties by members of theboard. Auditors attend board meetings and express their opinions aspart of their efforts to maintain and improve the transparency andfairness of the Company’s management supervision system. The
system is structured to enable standing auditors to participate andexpress their opinions during meetings of the Business Strategy andExecutive committees. The corporate auditors also strive to increase
the efficiency of the overall auditing process, meeting regularly tocoordinate their own corporate audits, independent public auditing
firm audits, and internal audits. There are no special business
relationships or interests between the outside auditors and NTN.

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

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

11

oversight functions, for making decisions on importantmatters and for overseeing business execution. We also
employ the Executive Officer System to ensure swift
decision-making and business execution.
On June 14, 2012, NTN and some of its former executives
were suspected of violating the Act on Prohibition of Private
Monopolization and Maintenance of Fair Trade (the AntimonopolyAct) in domestic transactions in bearings, and were indictedby the Tokyo District Public Prosecutors Office. We are taking
measures to improve our compliance system, including theestablishment of the “Fair Trade Monitoring Committee” toensure fair trading in compliance with the Antimonopoly Act
and the Act against Delay in Payment of Subcontract Proceeds(the Subcontracting Act). (See page 16.)

Fair Trade Monitoring Committee (Established April 2012)
Chaired by the NTN President, the commission exerts practicalcontrol to ensure fair trading in compliance with the Antimonopoly
Act and Subcontracting Act, and also monitors and provides
advice regarding training and educational activities. (See page 16.)

Officers (As of June 26, 2012)
Corporate GovernanceDirectors

Yasunobu Suzuki

Hitoshi Takai

Hiroshi Ohkubo

Chairman and CEO

Managing Director

Director

Shigeyoshi Takagi

Hironori Inoue

Keiji Ohashi

President

Managing Director

Director

Kenji Okada

Yoshinobu Yasuda

Hisaji Kawabata

Deputy PresidentManaging Director

Director (external)

Fukumatsu Kometani

Yoshio Kato

Akira Wada

Executive Director

Director

Director (external)

Statutory Auditors
Standing Statutory Auditors

Statutory Auditors(External)(External)

Akio Imanishi

Tadao Kagono

Mizuho Hikida(External)

Norifumi Ishii

Executive Officers

Didier SEPULCHRE DE CONDE

Executive Officers

Senior Executive Officer

Takayuki Matsuo

Takehiko Umemoto

Pete Eich

Yukiyoshi Hagimoto

Toru Tomiyama

Natsuhiko Mori

Makoto Okasaka

Yoshihiro Inami

Hidefumi Tsuji

Isao Ozako

Takashi Hosoya

Toshinori Shiratori

Kouji Kametaka

Tatsunobu Yasui

Tetsuya Sogo

Itsuji Gotou

Yoshinobu Akamatsu

Isao Koiwai

Yoshinori Terasaka

Tomoyuki Miyanomae

Tsutomu Kishi

Eiichi Ukai

Etsu Harima

Senior Executive Officer

Tetsuya Kondo
Senior Executive Officer

12Corporate Governance

CSR Management

In accordance with our Corporate Philosophy and CSR
Policy, we pursue CSR activities with the aim of
maximizing corporate value for all our stakeholders.
Corporate Philosophy and CSR Policy

Corporate
Philosophy

Basic corporate values.
Show intended direction of
corporate activities.
Corporate
Management
Policies

NTN’s Basic Policies

Employee Code of
Conduct

Business Code of
Conduct

Guideline to encourage aggressive actions

Guideline for compliance actions

CSR Promotion Structure
Chief Management
Officer

Department in charge
and the Committee Office

CSR Committee

CSR Management (CSR Dept.)

Managing departments

Corporate Planning
Department

Legal Department

General Affairs
Department

Personnel
Department

Environmental
Management Department

Quality Management
Department

Intellectual Property
Planning Department

In order to step up CSR activities to respond to the demands
and expectations for corporate social responsibility, in June
2006 we formulated our CSR Management Rules andestablished the CSR Committee. We also pursue CSR
throughout the entire NTN Group in Japan by appointing
CSR managers and persons in charge of CSR at all of oursites and at NTN Group companies in Japan.

Corporate Philosophy System

Procurement
Department

CSR Promotion Structure

NTN has the Compliance Subcommittee as an advisory
body under the CSR Committee to strengthen our compliancesystem. We have also established Help Lines offering
consultation services both inside and outside the company.

Management andcontrol Departments

NTN’s corporate philosophy is “We shall contribute tointernational society through creating new technologies anddeveloping new products.” To realize this philosophy, in June
2006 we formulated the CSR Policy, one of NTN’s Basic
Policies. All officers and employees are thoroughly educatedin both of these.
Under our CSR Policy, we clarify our corporate code of
conduct to each group of stakeholders and our responsibilities
to society as a whole.
Also in accordance with our CSR Policy, we have an
Employee Code of Conduct, which guides all employees’
CSR activities, and a Business Code of Conduct, which
details the social rules that all employees and officers mustabide by. All employees of the NTN Group in Japan are given
the CSR Guidebook and the Pocket CSR Card to constantly
remind them that CSR is a part of their everyday duties.
In the fiscal year ended March 31, 2012, we revised a
portion of Article 1 (Legal Compliance/Policy) of our CSR
Policy in order to ensure fair competition. In August 2012, weestablished five principles for preventing cartels, and thesewere put on cards for all NTN Group employees in Japan toeducate them.
We are revising our CSR Policy so that it can be applied to
fit the needs of the NTN Group’s overseas companies.

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

Compliance Subcommittee

Other Subcommittees

CSR Policy
1 Legal compliance/Policy for activities: We shall comply with laws

5 Employees: We shall value the individuality and diversity of ourand regulations, endeavor to engage in fair competition, and carry out
our business activities in an honest and ethical manner.

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

2 Customers: We shall strive to develop new technologies and new

products, as well as to provide safe and reliable products.
3 Business partners: We shall engage in fair and free competition, and at

the same time establish excellent partnerships with our business partners.
4 Stockholders/Disclosure of information: We shall work to develop

this corporation and increase stockholder return, while at the sametime communicating broadly with society and actively disclosing
information.

13

6 The environment: With ample consideration to preserving the global

environment and protecting the ecosystem, we shall work toward thecreation of a sustainable, progressing society.
7 Society: We shall make every effort to interact meaningfully with society

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

Corporate GovernanceRisk Management

We have built a system for promoting risk management
through which we strengthen control measures against
key management risks.
Risk Management Promotion System

Risk Management System
Corporate Governance

NTN has formulated a Risk Management Policy and Risk
Management Rules so that it can prevent major risks such as
information leaks and quickly deal with such risks should theyoccur. Risk is managed in an integrated manner withcoordination by the Risk Management Committee.
In efforts to manage risk and concentrate our risk
measures, in the fiscal year ended March 31, 2012, wechose key management risks that must be averted throughtop priority measures. These risks were in areas such as
disasters (earthquakes, volcano eruptions, tsunamis,
typhoons, and heavy rain), corporate secrets leakage, andcriminal actions (related to labor, environment, quality, etc.).

Board of Directors
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

Risk Management
Department(CSR Department)

Emergency Management
Department(Personnel &General Affairs Department)

Emergency
Management
CenterInformation Security Measures
In the fiscal year ended March 31, 2004, NTN formulated our
Basic Policy on Information Security. The Information
Security Guide on the NTN intranet contains items like theInformation Security Handbook and tests of employee levelof understanding on information security; the aim is tomake all employees aware of the proper ways to handle
information at NTN. Sales sites in Japan have a Classified
Information Protection Manual that details how to prevent
information leaks. And all employees who carry company
laptop computers are required to take the NTN Mobile
Information Pledge.
In the fiscal year ended March 31, 2012, we introduced
new data encryption software for laptop computers, andinstalled into all computers software that prevents the use of
USB flash memory. We are also introducing a system that
automatically puts password protection on all email attachments
and we plan to have this on all computers within the fiscal
year ending March 31, 2013.

Promoting Department

Risk Management Approach
Preventative
measures

Risk management planning

Emergency
measures
Person in charge of managing
emergency information

An incident occurs
Creation and implementation of
measures to address risk

Evaluation of measures toaddress risk
Evaluation of effectivenessof risk management

Determining the level
Establishment ofcentral task force
and response

Response by
department
in charge

Measures toprevent reoccurrence

Employee Code of Conduct

Business Code of Conduct

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

1 Compliance with laws and norms 2 Pursuit of quality and safety
3 Compliance with the Anti-Trust Law 4 Fair trade with suppliers
5 Honoring agreements 6 Refusal to engage in improper conduct 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 withindustrial laws 12 Compliance with corporate accounting principles
13 Compliance with international rules 14 Promotion of environmental
preservation 15 Positive contribution to society 16 Compliance withlabor-related laws and company work rules 17 Realization of a safe andpositive 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 harmfulsocial forces 23 Proper utilization of our information system 24 Prohibition of
insider trading 25 Self-restraint regarding entertainment and gifts
26 Lawful donations/political donations

2 We have noble ambitions and always make efforts to brainstorm andachieve the set target.
3 We accept changes, have broad vision and act voluntarily.
4 We deepen mutual understanding and enhance the vitality of our worksite.
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.

14

Corporate GovernanceComplianceAs part of efforts to boost compliance across the entire
NTN Group, we do everything possible to ensure fairtrading in compliance with competition laws in Japan andother countries.
Compliance Management System
NTN defines compliance as not only abiding by laws andregulations, but also as having a system for thoroughcompliance with all social norms and rules.
NTN has the Compliance Subcommittee as an advisory
body under the CSR Committee. This subcommittee ischarged with comprehensively promoting and managing
compliance initiatives for the entire Group.
In the fiscal year ended March 31, 2012, subcommittees
studied the following cases.
1. Establishment of an ethical review committee for clinicalresearch
We discussed the establishment of a new committee forreviewing the use of our force sensor for cerebral
aneurysm treatment for clinical research (joint researchwith Nagoya University).
2. Measures for thorough compliance with the Antimonopoly Act
Amidst the ongoing investigation of NTN by the Japan Fair
Trade Commission, we looked into ways to ensure thoroughcompliance among all employees with the Antimonopoly
Act. We established the “Antimonopoly Act Compliance
Committee” to create a system of rules and ways to boost
compliance. In April 2012, we established the “Fair Trade
Monitoring Committee” and the Fair Trade Promoting
Department to implement a range of measures among
NTN Group companies in Japan. (See page 16.)

Compliance Education
NTN conducts compliance education for all levels of
employees and management. In the fiscal year ended March
31, 2012, we strove to make employees constantly aware
and taking action on compliance so that it becomes a pillar of
our CSR. For example, all new employees and mid-career
recruits, took group training in basic CSR knowledge and
NTN’s Group CSR. Employees being promoted to managerial
positions took self-learning with company-provided
textbooks and online CSR comprehension tests.
At NTN sites and Group companies in Japan, CSR
managers and persons in charge of CSR formulate

compliance education plans and see that these are
implemented in sessions divided by level of employees
and CSR topic.
NTN also strives to reinforce compliance with the
Antimonopoly Act through educational activities. An
Antimonopoly Act compliance lecture for executives andauditors was held in December 2011, and Antimonopoly Act
compliance training was held for sales managers in January
and February 2012, and for all managers in April 2012.
The NTN intranet compliance database has case studies
in non-compliance and the latest information on complianceissues so as to raise employee awareness in this area.

Putting Regulations in PlaceNTN strives to compete fairly in abiding by worldwide
competition laws and to this end in April 2012 we established
our Fair Trade Management Rules. We have also strengthened
our compliance systems by clarifying the roles and functionsof the “Fair Trade Monitoring Committee” and Fair Trade
Promoting Department. At the same time, we systematicallyrethought and revised our existing Antimonopoly Act
Compliance Rules to bring them in line with the new Fair
Trade Management Rules.
Our helpline was created as part of our compliancemanagement system, and helpline management rules wererevised so that calls to the helpline related to competition
laws (Antimonopoly Act, Subcontractor Act) could bereported to the “Fair Trade Monitoring Committee.”Compliance · Helpline Management System
Compliance promotion

Manages the Help Line

Chief Management Officer

Chief Management Officer

Office(CSR Management
Department)

CSR Committee

Legal
Department

Personnel
Department

CSR managers
Persons in charge of CSR
Corporate
Philosophy

15

Legal
Department

Compliance Subcommittee
CSR
Management
Department

Compliance education for new employees (Japan)(Director in chargeof the Legal Department)(Director in charge of CSR)

Internal Help
Desk

External Help
Desk

Officers and employees of NTN Group companies

CSR Policy

Employee Codeof Conduct

Business Codeof Conduct

Strengthening of System to Ensure Fair Trading

Compliance System
Board of Directors
Overall management

Chief Management Officer: President(Newly established)

Fair Trade Monitoring Committee

Antimonopoly Act,
Subcontracting Act

Chairperson: President
Office: Fair Trade Promoting Department

Helpline(1) Antimonopoly Act Compliance Committee(Established in November 2011)
In November 2011, we established the “Antimonopoly Act
Compliance Committee” to strengthen awareness as weseek to rebuild internal systems aimed at compliance with
the Antimonopoly Act through systematic reviews of
mechanisms to prevent violations of the Antimonopoly Act,
reforms to related company rules, and the reeducation of
officers and employees with respect to legal and regulatorycompliance through training sessions. (Continued until endof June 2012)(2) Fair Trade Monitoring Committee (Established in April 2012)
This committee was established to ensure fair trading incompliance with the Antimonopoly Act and the Subcontracting
Act. The “Fair Trade Monitoring Committee” is chaired by
the President, with directors in charge of the sales andprocurement departments in Japan and overseas, andexternal directors and attorneys acting as committee
members. The commission exerts practical controls toensure that business transactions undertaken by the sales
and procurement departments are fair and comply with the
Antimonopoly Act and Subcontracting Act, and also
monitors and provides advice regarding the state of relevant
training and educational activities. The new committee is tobe a permanent organization under the Board of Directors
specializing in compliance with the Antimonopoly Act andthe Subcontracting Act.
(3) Fair Trade Promoting Department (Established in April 2012)
A new “Fair Trade Promoting Department” has also been
established with responsibility for the company-wide
development of the policies set out by the “Fair Trade
Monitoring Committee” and institutional decisions. The Fair
Trade Promoting Department will be a permanent department
with specialized functions in the effective operation ofsystems aimed at preventing violations of the Antimonopoly
Act and the Subcontracting Act during business activities,
consultations on compliance with laws and regulations, andhandling notification systems that can provide the leadfunction in responding to violations of laws or regulations.
Overseas, we will implement initiatives aimed atreconstructing legal compliance systems in response to theantimonopoly laws of each region.

Corporate Governance

In July 2011, the Company underwent an on-site inspection
by the Japan Fair Trade Commission into domestictransactions in bearings, on suspicion that the Company
had decided to raise sales prices in cooperation with othermanufacturers, and in April this year a search was carriedout by special investigators from the Tokyo District Public
Prosecutor’s Office and the Fair Trade Commission. On
June 14, 2012, NTN and some of its former executives
were charged by the Fair Trade Commission with violating
the Antimonopoly Act and were indicted by the Tokyo
District Public Prosecutors Office.
In November 2011, our European consolidated
subsidiaries also underwent an on-site inspection by theEuropean Commission into transactions in bearings, on
suspicion of noncompliance with the EU Competition Law.
Furthermore, in November 2011, our United States
consolidated subsidiary received a subpoena from theUnited States Department of Justice requesting thesubmission of information related to transactions inbearings. A number of civil lawsuits have been brought
against NTN’s U.S. consolidated subsidiary.
In July 2012, a consolidated subsidiary of the Company
in South Korea underwent an on-site inspection from the
Korea Fair Trade Commission on suspicion of a violation of
the Monopoly Regulation and Fair Trade Act in connection
with bearings business.
The NTN Group has worked hard to ensure compliancewith laws and regulations, including the Antimonopoly Act
and regards the above situation seriously and with thegreatest of concern. We will promote the construction ofsystems and activities to ensure adherence to the
Antimonopoly Act.

(Newly established)

Fair Trade Promoting Department

Fair Trade Promotion Officer

Business Administrating
General Manager
Fair Trade Promotion Officer

Procurement andCost Planning General Manager(Newly established)(Related to
Antimonopoly Act)
(Newly established)(Related to
Subcontracting Act)
Antimonopoly Act compliance training for managers (Japan)

16

At a Glance

Net Sales in Each Business Application as Percentage of Total Sales

Industrial Machinery
MarketPercentage of
total sales

20 %(106.6 billion yen)

Aftermarket &Distributor Market

Percentage of
total sales

17%(94.0 billion yen)

Automotive Market

Percentage of
total sales

63 %(342.9 billion yen)This business covers a
range of industrial
machinery sectors including
construction machinery,rolling stock, machine
tools, agricultural
machinery, aerospace,
office equipment, and windturbines. We are working todevelop new technologies
and expand sales for all
sizes of bearings.

Net Sales and Operating Income for Industrial Machinery Market

Through distributors, we
provide maintenancebearings for generalmachinery, and we service
the aftermarkets for mining,
paper, and steel machinery,
as well as the aftermarket
for automotive repair parts(auto parts). We provide
increasingly more bearingsof all types to customers
around the world.

Net Sales and Operating Income for the Aftermarket andDistributor Market

This market covers
automotive and automotiverelated parts. With themain products of axle
bearings, constant-velocity
joints, and needle roller
bearings, NTN provides
the world’s automotive
and automotive-relatedcompanies with newtechnologies and products.

Net Sales and Operating Income for Automotive Market

Net sales for industrial machinery market

Net Sales

Operating Income(Billions of yen)

150

114.0

119.7

100

(Billions of yen)

79.7

10

50
0

Operating
Income

106.6

99.5

4.8

3.1
2008

2009

2010

2011

2012

5
0

(Years ended
March 31)

Note: SNR has been included in consolidated performancesince the fiscal year ended March 31, 2009.

Net Sales

Net sales for aftermarket and distributor market(Billions of yen)

100

91.8
74.5

72.2

94.0

86.2

Operating
Income

19.1

17.9

50

Operating Income(Billions of yen)

20
10

0

2008

2009

2010

2011

2012

0

(Years ended
March 31)

Note: SNR has been included in consolidated performancesince the fiscal year ended March 31, 2009.

Net sales for automotive market

Net Sales

Operating Income(Billions of yen)

450

345.6

300

315.6

300.9

344.4

342.9

Operating
Income(Billions of yen)

150

10

3.5

0

0

–3.2
2008

2009

2010

2011

2012

–10

(Years ended
March 31)

Note: SNR has been included in consolidated performancesince the fiscal year ended March 31, 2009.

17

At a Glance

Reference: Net Sales by Region
Japan

Percentage of total sales

36%

Europe(Billions of yen)(Billions of yen)

250

200

220.2

200

194.8

186.6

193.4

150

100

100

2008

2009

2010

2011

2012 (Years ended

Americas0March 31)

In industrial machinery, sales were brisk in sectors including construction
machinery, machine tools, and wind turbines, resulting in a double-digit
increase. The aftermarket and distributor market also had a double-digit increase
thanks to a recovery in customer demand. The automotive market, however,saw a decrease due to factors including the Great East Japan Earthquake andflooding in Thailand.

Percentage of total sales

23%

2008

132.8

133.0

Asia and Others(Billions of yen)

120

135.8
109.3

100

118.0

90

124.6

90.0

2009

2010

2011

2012 (Years ended
March 31)

In industrial machinery, sales were brisk in sectors including agricultural machinery,
construction machinery, gearboxes, and machine tools, while in the aftermarket
and distributor market, auto parts had healthy sales. The result was a double-digit
increase in net sales, excluding currency effects. In the automotive market,
business was negatively impacted by financial crises in Europe, resulting in net
sales about the same as the previous fiscal year, excluding currency effects.
• Increase over previous fiscal year excluding currency effects: 5.3 billion yen(4% increase)(Billions of yen)

Percentage of total sales

84.4

81.3

79.3

2008

2009

2010

17%

92.7

92.4

2011

2012 (Years ended

60
30

50
0

127.1

93.7

200
150

24%

50

50
0

141.7

150

156.4

Percentage of total sales

2008

2009

2010

2011

2012 (Years ended
March 31)

In industrial machinery, sales were brisk in sectors including construction
machinery and agricultural machinery, while the automotive market also
performed well thanks to strong sales to U.S. manufacturers. Both segments
enjoyed double-digit net sales increases, excluding currency effects. The
aftermarket and distributor market also enjoyed increased net sales, excluding
currency effects.
• Increase over previous fiscal year excluding currency effects: 16.3 billion yen(13.8% increase)0

March 31)

In industrial machinery, although sales for construction machinery fell in China,business was brisk in sectors including construction machinery and machine
tools in other parts of Asia. Add to this new orders for wind turbines, andindustrial machinery enjoyed increased net sales excluding currency effects.
In the aftermarket and distributor market, excluding currency effects, sales in
China were up 1.5 times the previous fiscal year and other parts of Asia also
saw increased sales. In the automotive market, sales were up in China but
down in other parts of Asia due to factors including flooding in Thailand, resulting
in overall net sales for this segment that were about the same as the previous
fiscal year, excluding currency effects.
• Increase over previous fiscal year excluding currency effects: 3.8 billion yen(4.1% increase)18

Industrial Machinery Market
Sales Situation
Results in the Fiscal Year Ended March 31, 2012

Net Sales and Operating Income for Industrial Machinery Market

Net sales in industrial machinery were 106.6 billion yen, up
7.2 billion yen (7%) from the previous fiscal year. Although thesituation was negatively impacted by flooding in Thailand,demand rebounded in sectors including construction
machinery, machine tools, wind turbines, and agricultural
machinery in all regions. Efforts to cultivate new markets for
sectors including wind turbines and machine tools in China
and India also contributed to the net sales increase.
Thanks to the positive effects of increased net sales,
operating income was up 1.7 billion yen (56%) over theprevious fiscal year to 4.8 billion yen.

Net Sales

Overview of the Fiscal Year Ending March 31, 2013
We will expand in our existing European and Americas plants,
go onstream with the new plant in China, and establish asystem for integrated production. We will also boost oursales systems in growth markets such as India, Indonesia,
and China.

Japan

EuropeAmericas

Asia and Others

Operating Income(Billions of yen)

120

119.7
114.0

106.6
99.5

100

79.7

80

60
Operating
Income(Billions of yen)

40

10

4.8

20

5

3.1
0

2008

2009

2010

2011

2012

0

(Years ended
March 31)

Note: SNR has been included in consolidated performancesince the fiscal year ended March 31, 2009.

New Products Expanding “ULTAGE Series” with the World’s Highest Level of Performance
Major improvements to load resistance, load capacity, and sealing performanceContributing to greater reliability and more compact main shafts“ULTAGE Sealed Four row Tapered Roller Bearings” forRolling Mill Roll-necks“Space-saving and High Performance Angular Contact Ball
Bearings for Air Oil Lubrication”

Bearings for rolling mill roll-necks at iron and steel facilities require theutmost reliability as they are subjected to extreme conditions during
operation, including vibrations, shocks, and heavy loads, combinedwith the effects of cooling water, dust, and other contaminants.
To meet this need for reliability, NTN’s “ULTAGE Sealed Four
row Tapered Roller Bearings” have been given improvements tothe internal design over conventional sealed four row tapered roller
bearings. Together with a uniform bearing rolling elements contact
surface pressure for outer loads and an optimum design for ahigher load capacity, the resulting product delivers the world’s
highest level of load resistance. A more compact seal design has
also led to major improvements to sealing performance.

In addition to high-speed and high-rigidity, the main shaft bearings ofmachine tools need to be compact. Conventional main shaft bearings
use the air oil method and so are limited in how compact they can be.
As well, lubrication oil stagnates around the lubrication hole area,
resulting in unreliable supply of oil and anincrease in noise when feeding lubrication oil.
The “Space-saving and High Performance
Angular Contact Ball Bearings for Air Oil
Lubrication” solves these problems with a
new design that allows lubrication oil to be
fed directly within the bearing via a lubrication
hole on the outer ring. This contributes to amore compact main shaft, as well as aSpace-saving and High
reduction in the amount of lubrication oil
Performance Angularand air required, and ultimately greater
Contact Ball Bearings
energy efficiency.
for Air Oil Lubrication

Structure and example
of application
Spacer with lubrication hole
Lubrication hole

ULTAGE Sealed Four row Tapered Roller Bearing

19

Example of application of
conventional bearing

Materializing more compact design
and reduction in lubrication oil loss
by lubrication hole on the outer ring
Lubrication hole Spacer

O-ringExample of application of
newly developed productMain Product Lineups for the Industrial Machinery Market
Construction
machinery bearings
At work in resource mining
and civil engineering

Office equipment
bearings

Gearbox bearings

Supporting smooth operation in copiersand multifunctional printers

Supporting
industrial machinery robots

Machine tool bearings

Meeting growing demandin renewable energy andother areas

High-precision support
for high-speed-rotation
machinery

Medical equipment
bearings

At a GlanceWind turbine bearings

Rolling stock bearings
Providing safety
for the world’s
high-speed railways

Used in CT scanners
and artificial hearts

Agricultural machinery
bearings

Aerospace bearings

Contributing to food demandwith high quality products

At work in jet engines
around the world

Precision equipment

Hydrodynamic
bearings

Developing new markets withtechnologies for precise positioning

Developing hydrodynamic bearings
for hard disc drive spindle motors

A Word From an Executive
Focusing on Sectors and Regions with Promising Demand Growth
At NTN, we are focusing on the key
segments of construction machinery, rollingstock, and wind turbines. Economic
advancement in growth markets is fuelingdemand for energy and mineral resources,
creating a need for large construction
machinery to extract these; transport
continues to shift to the use of railroads; andrenewable energy is seeing increasingly
widespread use.
The scale of the manufacturing industry
is increasing, especially in growth markets,
prompting us to also focus on machine
tools and industrial robots. And with

regional jets expected to enjoy increasinguse, we are positioning aircraft as anotherkey market.
Growth markets are expected to continue
their upward trends for population and scaleof industry. We have our eyes on China, India,
and ASEAN in particular, and we are fortifying
our distribution and sales networks in theseregions. On the development side, we are
striving to meet the needs of each industrial
field, as well as accelerate the pace at which
we design using local materials and parts.
We are also strengthening and expanding
our local manufacturing systems.

Kenji Okada
Vice President

20Aftermarket & Distributor Market
Sales Situation
Results in the Fiscal Year Ended March 31, 2012
Net sales in the aftermarket and distributor market were94.0 billion yen, up 7.8 billion yen (9%) from the previous
fiscal year. While we were negatively impacted by a sluggish
economy caused by monetary restraint in China and debt
crises in Europe, brisk sales of auto parts in Europe andAmericas and a recovery in customer demand in all regions
helped increase sales.
Operating income was up 1.2 billion yen (7%) over theprevious fiscal year to 19.1 billion yen.

Overview of the Fiscal Year Ending March 31, 2013
We will expand sales routes in China, India, and Indonesia, as
well as expand sales in the new equipment repair businessmainly for the steel plant and mining industries. In North America,
we will increase sales to major distributors, and in South America
we will expand aftermarket sales to resource-based companies.

Net Sales and Operating Income in the Aftermarket andDistributor Market
Net Sales

Japan

EuropeAmericas

Asia and Others

Operating Income(Billions of yen)

100

94.0

91.8
86.2

80

74.5

72.2
Operating
Income60(Billions of yen)

30

40

17.9

19.1

20

20
10

0

2008

2009

2010

2011

2012

0

(Years ended
March 31)

Note: SNR has been included in consolidated performancesince the fiscal year ended March 31, 2009.

TOPICS NTN China Distributors’ Meeting Held in Kuwana (Mie Prefecture, Japan)

21

NTN Group business in China has up to now been centered on
the automotive market, but we plan to make industrial machinerya key segment here as well. To this end, in May 2012, 47
management members from 29 distributors in China gathered at
the Industrial Technical Center (Kuwana City, Mie Prefecture) for
the China Distributors’ Meeting.
Following explanations by NTN executives on business policy
in China, and on technologies and products for industrial machineryand the aftermarket and distributor market, participants toured
the Heat Treatment Plant, the Large Bearing Plant of KUWANA
Works, and NTN MIE Corp. plant. They also saw a demonstrationof assembly and disassembly using an NTN bearing maintenancetool kit. The visitors had high praise for the event, saying thatthey now have a renewed awareness of NTN’s competitivenessafter learning about the development system at Kuwana, NTN’s
major base of the industrial machinery business, and seeing
manufacturing firsthand.
We will continue to seek opportunities for interaction with
distributors so that we can strengthen ties and develop greater
mutual understanding, and in the process strengthen and expand
our industrial machinery business in China.

Chinese distributors at the entrance of KUWANA Works

Chinese distributors tour KUWANA Works

Main Services and Measures in the Aftermarket and Distributor Market
Strengthening of global supply system

Strategy to come out ahead in the equipment repair business• Production capacity increase• Buildup of flexible inventory systems
worldwide• Strategy of MRO: Maintenance, Repair, Overhaul

To Northeast[ China ]Beijing

Shenyang

Beijing Branch

DalianTianjin

NTN China
Technical Center

Nanjing
Chongqing

Chongqing Branch

Hangzhou

To inland
Guangzhou Branch

KunmingShanghai

Wuhan

ChengduShanghai Branch

FuzhouNanjing Branch

Hong Kong

Nanning
Guangzhou

At a Glance

To coastal andinland regions

Xian

To Northwest

Qingdao

Rolling mill equipment at steel facility

Four row Tapered Roller Bearing
for Rolling Mill Roll-necks

Hong Kong Branch

Strengthening technical service

Horizontal development of auto parts business• On-the-road technical training using specially equipped van(China and Asia)• NTN engineers lead workshops on bearing handling for distributors• Appointing dedicated sales staff and increasing number of
distributors• Share the knowledge possessed by NTN-SNR• Sales expansion of unit products such as brake disc kits
• Strengthening ties between regions through global conventions

Mobile training unit (China)

Workshop (Europe)

Brake disc unit

Axle bearing kit

Improving Products and Services in Each Market
The NTN Group strives to increase its sales
and market share in the aftermarket anddistributor market.
In the industrial machinery segment,
we offer top level repair service withspecialized staff and tools. We haveother ways in which we strive to constantly
improve customer satisfaction, such as
speedy delivery via our distribution
centers with high performance andmeticulous technical support using
dedicated service vehicles.
In the automotive market, we sell avariety of auto parts that boast a highshare in Europe, and we strive to develop
new products by making the most of thetechnologies and know-how that the
NTN Group possesses. Our sales network
goes beyond Western Europe withbases in Northern Europe, and Russia,
Central and Eastern Europe, and we arehave started to develop the markets ofSouth America.
We aim to expand business in theaftermarket and distributor market bybuilding closer relationships with partners
in Japan, China, Asia, North America,and other world regions.

Eric Malavasi (left) Patrick Désire (right)
Vice Presidents (in charge of aftermarket anddistributor market), NTN-SNR ROULEMENTS

22

Automotive Market
Sales Situation
Results in the Fiscal Year Ended March 31, 2012

Net Sales and Operating Income in Automotive Market

Net sales in the automotive market were 342.9 billion yen,down 1.5 billion yen (0.4%) from the previous fiscal year.
Although a recovery in customer demand in the Americas
and China helped increase sales, the effects of the Great East
Japan Earthquake and flooding in Thailand decreased
customer demand and led to lower net sales in Japan andother parts of Asia.
Factors including negative currency effects resulted in an
operating loss of 3.2 billion yen (compared to 3.5 billion yen
in operating income last year).

Net Sales

Overview of the Fiscal Year Ending March 31, 2013
We expect to increase sales to local manufacturers in ASEAN
and India including new orders and delivery from NTN-LYC(Luoyang) Bearing Corporation. In Europe, a recent addition
to the NTN Group, NTN Antriebstechnik GmbH（NTN-AT）,is expected to contribute to improved group performance.

Japan

EuropeAmericas

Asia and Others

Operating Income(Billions of yen)

400
350

345.6

344.4
315.6

300

342.9

300.9

250
200
Operating
Income150(Billions of yen)

100

10

50

50

3.5

0

0

2008

2009

2010

2011

–3.2
2012

–5
(Years ended
March 31)

Note: SNR has been included in consolidated performancesince the fiscal year ended March 31, 2009.

Development of “Press Cut Spline Hub Joint” Achieving Dramatic Weight Decrease
New Products and Performance Increase
NTN developed the “Press Cut Spline Hub Joint”, which allows
for lighter weight and eliminates any backlash that often occurs
in fittings.
Lower fuel consumption has become a key issue in the global
automotive industry, and one way to achieve this is to use
lightweight components for a car’s various systems. This newly
developed “Press Cut Spline Hub Joint” uses NTN’s proprietarypress-cut spline joint for the pre-spline (the smaller spline) inside
bore surface of the hub bearing, thus reducing the load required
for the fitting. By using a bolt to fasten the hub joint and CVJ
together, weight is dramatically reduced and performance increased.
This allows the newly developed product to be used on automobile

manufacturer assembly lines without having to change from thecurrent 3rd generation hub bearing and CVJ assembly process
in use today.

Construction and applications
Hub bearings

Constant-velocity joints

Press-cut joint
Fastening bolt

Press Cut Spline Hub Joint

23

Main Product Lineups
for Automotive Market
Transmission

Steering

Thrust needle
roller bearing

Seat
Constant-velocity
joints for steering*

Clutch forseat lifter*

At a Glance

Tapered roller bearings

Engine, accessories

Third generation
hub bearings*(Axle bearings)

Auto-tensioners*

Wheel applications
Needle roller
bearings forrocker arm

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

A Word From an Executive
Bi-Polar Development Strategy
The world’s automotive industry is expected
to expand with growth markets acting as thedriving forces. Companies will have to take abi-polar approach, making “highly functional
products” for industrialized countries and“low-cost products” for growth markets.
NTN is meeting the needs of growth markets
by developing and selling products, mainly
for small cars, that offer low cost and canwithstand severe environments.
While the market is expanding for EVs and
HEVs (hybrid electric vehicles), which offer
advantages like low environmental impact

and fuel efficiency, new environmental
technologies are also driving growth inexisting internal combustion engine vehicles.
We are looking to expand sales in products
for these engines with a lineup offering
technologies for low friction, lighter weight,
and electrization. In the area of electrization,
we are developing module products thatuse our proprietary ball screw and clutch
technology, and that help car manufacturers
develop vehicles that are environmentallyfriendly and fuel efficient.

Yoshio Kato
Director

24

Research and Development System

NTN conducts research and development through four
regionally independent R&D bases around the world with atheme of environmental protection and creating futuretechnologies for renewable energy.
Strengthening Self-Contained Technical Capabilities on Local Sites with a Global R&D System
NTN’s R&D includes basic research in elemental technology
and other areas, which we conduct at two R&D bases, one inJapan and one in France. The development of products andtechnological services is conducted in a locally based,
self-contained manner in order to promptly meet the needs ofcustomers in each worldwide market. Relevant information isstored in a database to be shared with NTN bases worldwide.
In May 2011, we established the NTN China Technical Centerin Shanghai in order to offer customers technical services suchas design and evaluation tests in the growing Chinese market.
This has led us to strengthen technical capabilities on local sites
in Europe and the Americas as well.

Research

Development

Share database

EuropeDesign data / Testing data / Experimental data /Production technology data /Customer-project data

Research
Development

Americas

Development

China

Development

Tribology is Key to Creation of Future Technologies in Environmental Protection andRenewable Energy.
The two pillars of our R&D are preservation of the global
Creating the Technologies of the FutureWind powersystems
Rolling stock
Construction
machinery
Electric
vehiclesAutomobiles

Preservation of the global environment,
new energy
Ultrahigh-speed&
specialenvironments

Longerworking life
(high reliability)

Morelightweight&more
compact

Space rockets,
artificial satellites
Passenger
planesMedicalequipment

Customer needs

Lower friction(lower torque)

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

Precisionequipment
Machinetools

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

environment and contribution to renewable energy. Bearings
that reduce friction, and thus energy consumption, in a variety ofmachinery are truly eco-products. Based on the expertise wehave built up in tribology* 1, we use our material technologies
including surface modification, ceramics, sintered alloys, andengineering plastics*2, and our lubrication technologies in oil andgrease, to bring customers products that are light and compact,
offer low torque and a long service life (high reliability), and canhandle high-speed and special environmental applications.
Established in April 2011, NTN’s EV System Division develops
products for EVs as the company’s in-house venture division.
In January 2012, Nippon Kagaku Yakin Co., Ltd., which
possesses technologies for powdered metals, plastic molding,and high-precision processing, became a wholly owned NTN
subsidiary. The company works closely with NTN’s Advanced
Technology R&D Center and the Composite Material Product
Division to speed up development in powdered metals andengineering plastics.
*1 Tribology: A science and technology that includes the study and applicationof mechanisms of friction, wear and lubrication.
*2 Engineering plastics: Synthetic plastics that are engineered to have a
specific function.

A Word from an Executive
Focusing on Development Towards Mass-Production of the In-Wheel
Motor System
The NTN Group has focused on developing
environmentally friendly, energy-efficient
products. With environmental regulations
getting increasingly stricter and demand for
EVs on the rise, we have commercialized
the “In-Wheel Motor System” for EVs, which
combines a speed reduction mechanism, hub
bearings, electromechanical brakes, and acontrol system. In the fiscal year ended
March 31, 2012, we showed the “Q’ mo”
concept car with in-wheel motor system at
the Tokyo Motor Show. We also provided
vehicles equipped with the in-wheel motor
system to Iwata City, the location of ourbase for EV-related products, to be used as

25

official vehicles, and demonstration tests
have begun on public roads.
We will continue to improve the productbased on testing results, and accelerate
development towards the realization ofmass-production. In this regard, we will
improve productivity and reduce costs by
utilizing technology for the high-precisionmolding of sintered alloys, a specialty of
NTN subsidiary Nippon Kagaku Yakin Co.,
Ltd. We believe that these efforts will
eventually pay off by making the in-wheel
motor system another of our key products
along with bearings, constant-velocity joints,
and hub bearings.

Yoshinobu Yasuda
Managing Director

(R&D Details) Development of State-of-the-Art Technologies and New Products

Japan• Advanced Technology R&D Center
This facility works to advance technologies for tribology, materials, surface modification,and powders, and thus boost the functionality of bearings, our base product. “Testingarea of natural energy management” has been set up to develop renewable energy related
technologies such as solar and wind power.

Advanced Technology R&D Center• Engineering Division of Automotive and Industrial Business Headquarters
These divisions focus on future market needs from a global standpoint, developing and proposing products
incorporating state-of-the-art technologies. Modules and systems incorporating bearing peripherals are a particularfocus of development.
• Composite Material Product Division
Here, NTN develops materials for sintered alloys and engineering plastics, and develops new hybrid products.

• EV System Division
Besides developing products for EVs, this group conducts demonstration tests on public roads of EVs equipped with
NTN-developed system products.
• Precision Equipment Division
Here, NTN develops a range of high-precision, highly functional products: spindles and XY tables for the semiconductor
and electronic components industry, mechatronics products such as LCD repair devices, and parts feeders used in arange of industrial fields.

(R&D Details) Variety of Evaluation Testing for R&D and User Approval

NTN-SNR
R&D Center(R&D Details) Variety of Evaluation Testing for User Approval

China• NTN China Technical Center
This facility has evaluation equipment for extra-large bearings for main shafts of windturbines, a market where increasing growth is forecast. Local engineers carry out bearing
evaluation tests in line with Chinese environmental standards, and basic evaluation onmaterials procured in China.

NTN China Technical Center(R&D Details) Variety of Evaluation Testing for User Approval• Industrial Machinery (Chicago district)
The facility conducts various evaluations for user verification of construction machineryand industrial machinery. Local specialists use the range of survey and analysis equipment
on site to conduct analysis of everything from metallic structure to lubricants.
• Automotive Products (Detroit district)
The facility conducts various evaluations for user verification of automotive products.
Vehicles that have completed user testing are taken to the NTN facilities where they
undergo inspection.

NTN Automotive Center

Focusing on R&D in Bearings for Rolling Stock, Wind Turbines, and Low-Torque Automotive Bearings
The NTN-SNR R&D Center is an R&D
base with a long history and a full range of
R&D capabilities.
In industrial machinery, the center
focuses on railway-related markets,
developing high-speed, long-life, andmaintenance-free products. It has also
begun R&D in solutions for railways through
CMS*, which integrates NTN’s expertise inbearings and mechatronics. This will also
lead to solutions for wind turbines, andcompanies, universities, and research
institutes in Europe’s wind power belt arecooperating in research. In automotive

products, we conduct ongoing research in
improvement methods so that we cancome out with light, low-torque products
for use in wheels, transmissions, andengines. We will also develop new solutions
for axle bearings and constant-velocity
joint connectors.
Since joining the NTN Group in 2009,
we have worked to create synergy between
Europe and Japan. By sharing technologies,
introducing each other to best practices, andcollaborating in research, I want to prove that
we can add 1 + 1 (Japan + Europe) and geta sum that is infinitely greater than 2.

Herve Brelaud
Vice President, NTN-SNR ROULEMENTS* Condition Monitoring System

26

Research andDevelopment System• NTN-SNR R&D Center (Annecy, France)
The Annecy region of France is a mechatronic technologies cluster with a wealth ofcollaboration between industry and academia. Research and development in sensor
technology is especially advanced, and NTN is active in this area, particularly as it pertains
to next-generation sensor development.

1FeatureGrowth Strategy in the Industrial Machinery Market

Function Improvement, and Global
Manufacturing and Sales of Large Bearings
With construction machinery, agricultural machinery, wind turbines, and other machinery getting increasingly
larger, worldwide demands for large bearings that can support rotating parts are growing. NTN considers
business expansion of large bearings as the pillar of its growth strategy in the industrial machinery market,
as the company develops new products with high added value and advanced functionality, while at the sametime increasing production capacity and sales and service networks worldwide.

Large Bearings
These are defined under JIS
standards as bearings having
an outer diameter of 180 mm
or more. NTN develops andmanufactures extra-large
bearings with a load capacityof more than 10,000 ton.

27

We manufacture large bearings
with outer diameters up to2,500 mm; these are main shaft
bearings for wind turbines.

Meeting Increasingly Advanced Needs forLarge Bearings Worldwide“Filter Seal Integrated Large Size Bearing:” Blocks penetrationof foreign matter and allows maintenance-free operation
Lubricant can be fed anddischarged (pumped)
via the mesh filter
Blocks penetrationof harmful foreign
matters

FeatureWorldwide customer needs for NTN’s industrial machinery
bearings, particularly large bearings, are expanding anddiversifying.
NTN already has the world’s leading share of large bearingsfor construction machinery such as dump trucks used inmining. The construction machinery industry is expected tosee increasing demand in growth markets and countries withresource-based economies.
In agricultural machinery, NTN supplies many large
bearings, and in the U.S. we have become the top supplier.
Amidst growing worldwide population growth, more grain isneeded, and agricultural machinery is expected to experience
increasing demand.
In wind turbines, NTN provides large bearings—some morethan 2 meters in diameter—for main shafts as well as bearingsfor gearboxes and power generators, and we have been highly
evaluated for our high reliability and durability. Interest in
renewable energy rose following the Great East Japan
Earthquake, and growth is expected in markets such as
offshore wind farms.
In the fields of rolling stock and aerospace, expectations for
NTN’s large bearings are increasing as railways take on a greaterrole in transportation and regional jets become more prevalent.
NTN considers business expansion of large bearings as
the pillar of its growth strategy for the industrial machinery
market, as the company separates itself from competitors bydeveloping new products with high added value and advanced
functionality, and strengthens its manufacturing systems inregions around the world.

One of these products is the “Integrated Rotation Sensor
Bearing”, released in October 2011. Until now, large bearings
and rotation sensors had been mounted separately within
machinery by the customer. But this product integrates thebearing and rotation sensor, and it uses a sensor wiring
layout mechanism. This reduces the number of assemblycomponents and man-hours of the customer and results in amore compact design, and it allows accurate detection ofrotation speed even when immersed in oil and under vibrating
conditions. This product is expected to prove useful inconstruction machinery, the steel industry, and wind turbines.
In January 2012, we introduced a world first, the “Filter Seal
Integrated Large Size Bearing.” This product prevents the entryof foreign matter such as sand, dust, and metallic abrasion
powder during processes such as lubricant filling, resulting
in longer periods between bearing replacement andmaintenance-free operation. This product is expected to see
widespread use in mining machinery, construction machinery,
and wind turbines subject to long periods of continuous use.

Developing High-Value-Added,
High-Functioning Products Driven by
Advanced Sensor Technology
NTN has developed high-value-added, high-functioning
products by using its wealth of advanced sensor technology,
material and material processing technologies, and design
technologies.
“Integrated Rotation Sensor Bearing:” Reduced numberof components and more compact housing size

Production Process for Large Bearings

Rotation sensor

28

1FeatureGrowth Strategy in the Industrial Machinery Market

Function Improvement, and Global Manufacturing and Sales of Large Bearings

Seeking Greater Market Share throughStronger Sales Worldwide

to go onstream in October 2012. This company carries
out integrated production of medium and large-size
bearings, from materials to finished products using local
materials. It will first ship products to meet demand from
customers in China for wind turbines, construction machinery,and steel.
In Europe, NTN-SNR is strengthening its manufacturingsystem for rolling stock bearings, and large bearings for windturbines, construction machinery, and aerospace.
In Japan, construction was completed on the plant of
NTN NOTO Corp. (Ishikawa Prefecture) in March 2012. ThisAs customers develop more advanced needs for industrial
machinery bearings such as large bearings, NTN follows
a strategy of “on local site with local materials by local
personnel” to strengthen its manufacturing systems aroundthe world.
NTN used to manufacture automotive parts at eight
production bases in China, but in September 2011 it
established a new production company for industrial machinery
bearings, Nanjing NTN Corporation. The company is expected

Estimated Electricity Generated by Wind and Solar PowerWind power

Solar power

600,000
Wind power will generate about

three times more than

500,000

solar power

400,000
300,000
200,000
100,000
0

2007

2008

2009

2010

2012

2015

Exhibition at China Wind Power 2011 in Beijing

2020 (Year)(Source: Fuji-Keizai forecast)Global Manufacturing System for Large Bearings for
Industrial Machinery
NTN has established production sites for industrial machinery bearings
around the world. In the fiscal year ended March 31, 2012, we
strengthened our manufacturing system on several fronts; for example,
establishing a new company in China and expanding and upgrading
NTN-SNR’s Argonay Plant.

1

Argonay Plant of
NTN-SNR
1NTN NOTO Corp.
Nanjing NTN 2
Corporation

Production sites

The expanded and upgraded
Argonay Plant of NTN-SNR

29

3

Focusing on Expanding Sales of Large Bearings for
Aerospace
NTN’s high-precision large bearings are hard at work in theaerospace field. Our bearings for jet engines have been highly
rated for their continuous performance subjected to 10,000 rpm
at approximately 200°C, and we have been selected as asupplier for the world’s three largest jet engine manufacturers.
We aim to increase sales in the growing market for regional jets.
NTN’s engine turbopump bearings for Japan’s H-IIA and
H-IIB rockets withstand 50,000 rpm under extreme conditions:-253°C with no lubricant. The NTN-developed spherical plain
bearings on Japan’s Hayabusa asteroid probe were instrumental
in the success of a seven-year, 6-billion-kilometer journey.
With these technologies representing our trump card, we arefocusing on expanding
sales of large bearings
for aerospace
applications. As part ofthis effort, in June
2011, we displayed
our wealth of products
at the Paris Air Show,the world’s leading
aerospace event.
Bearings for aerospace
Featureplant carries out heat treatment, grinding, and assembly,
and an integrated production system for large bearings forindustrial machinery has been established together with NTN
HOUDATSUSHIMIZU Corp., NTN HAKUI Corp., and NTN
SHIKA Corp.
To increase market share in large bearings and otherindustrial machinery bearings, NTN is fortifying its sales andservice system.
In October 2011, NTN took part in China Wind Power 2011
in Beijing, the country’s largest wind power trade show.
There in the growing Chinese wind power market, it showed
actual products including bearings for main shafts andgearboxes, and insulated bearings for wind turbines.
In the Americas and Asia, we are working aggressively ona strategy of MRO—maintenance, repair, overhaul—businessin mainly the markets for steel and mining machinery. In China
we are expanding our sales network, and by March 2014 plan
to have sales offices in 10 sites, growing from our current
eight, and to have distributors of 60 companies in 120 sites,up from the current 40 companies.
We have used the bearing diagnostics technology built up
over the years to develop the “Condition Monitoring System(CMS) for Wind Power Generators.” CMS will play a key rolein monitoring offshore wind farms, which are becoming
increasingly prevalent in recent years and are much larger
than land-based systems. NTN is doing everything it can todevelop markets for industrial machinery.

2

4

NTN-Bower Corp.
(NTN-Bower)

Production is set tostart in October 2012
at Nanjing NTN Corporation

3

NTN NOTO Corp., completed in March 20124

The second plant of NTN-Bower’s Macomb Plant isscheduled for completion in May 201330

2

FeatureGrowth Strategy in the Automotive Market

Improving Fuel Efficiency of Internal Combustion
Engines, Commercializing Next-Generation EVs
While the use of hybrids and EVs is spreading, cars with internal combustion engines using fuels like gasoline
and diesel fuel are still expected to increase in demand. To continue its growth in the automotive market, NTN
is taking a two-pronged strategy in which it conducts R&D towards improving the fuel efficiency of internal
combustion engines and also comes out with products that make possible next-generation EVs.

The Spread of Next-Generation Cars
and NTN’s Response
At NTN, we are anticipating the spread of nextgeneration cars, and we are pursuing developmentthat makes use of our proprietary technologies incontributing to making conventional cars more fuelefficient for severe environments.

One-motor EV

EVs

Hybrids(HEVs)

Light weight
Gasoline/diesel cars

31

EV module
products

Electrization
parts

Modularization

Nextgeneration
EV systems

In-wheel-motor EV

Low-torque
Make conventionalcars fuel efficient

Make internal
combustion
engines fuelefficientWorldwide, Internal Combustion Engines
Continue to Increase while the Spread of
EV Accelerates“Self-formed Seal Low Torque Deep
Groove Ball Bearing,” which reduces
rotational torque by up to 80%

Worldwide automobile production is increasing yearly. In thefiscal year ended March 31, 2012, the total number of cars*
produced was over 75 million, and demand is expected tocontinue increasing mainly in the world’s growth markets.
Numbers are gradually on the rise for both hybrid cars,
which employ both an electric motor and an internal
combustion engine (using gasoline or diesel fuel), and EVs,
which are driven by only an electric motor. Worldwide, internal
combustion engine cars are still increasing in number.
What this means is that companies must develop ways toreduce the amount of CO2 emissions given off when internal
combustion engine cars are driven. It is said that about 20%of the world’s CO2 emissions come from the operation of cars.
To reduce these emissions and curb global warming, it will
not be enough just to increase the number of EVs. It is crucial
that we make internal combustion engine cars more fuelefficient, which is why NTN is striving to do this, in addition
to commercializing next-generation EV systems.

(Illustration above is a cartransmission)* Total number of cars produced in 2011: Includes internal combustion engine cars,
hybrids, plug-in hybrids, and EVs

Automotive Market, by Power Train Type, Up to Fiscal YearEnding March 31, 2019
Internal combustion

HybridPlug-in-hybridEVs

10,000

9,000

8,000

0

2012

2013

2014

2015

2016

2017

2018

2019

(Years ended or ending March 31)(Source: IHS Automotive, current as of May 2012)

Pursuing Advancements in Products thatContribute to Making Internal Combustion
Engines Fuel EfficientOver the years, NTN has striven to respond to auto makers’
requests for a range of products—used in the engine, drive
system, chassis, and other sections—that improve the fuelefficiency of internal combustion engines. We are working
towards further advancements in these products.
For example, in May 2012, we released a new product, the“Self-formed Seal Low Torque Deep Groove Ball Bearing” fortransmissions, which employs a newly developed seal that
self-forms minute gaps between the inner ring and seal toprevent penetration of foreign objects into the bearing during
the initial stages of bearing operation and reduce rotational
torque by up to 80%.

(Substitute example)
Replacement of tapered roller
bearings for rear differential
gears to developed products

In November 2011, we released the “Deep Groove Ball
Bearing for High Thrust Loads”, which is suitable for replacing
tapered roller bearings in vehicle differentials. In this product, theinner shape of conventional deep groove ball bearings has been
modified in order to increase thrust load capacity three times,
and the use of deep groove ball bearings allows a 60% reduction
in rotational torque compared to tapered roller bearings.
Also in November 2011, we released a product for wheels:the “Hub bearing for severe environment”, which provides
highly reliable drivability on unpaved roads and in cold climates.
We modified the shape of the seal to reduce the penetrationof muddy water and improve shock resistance, and to achieve
low torque. We are aggressively marketing this new productin newly industrialized countries for its ability to improve a
car’s fuel efficiency even on unpaved roads.

“Hub bearing
for severe
environment”

32

Feature(Unit:cars)“Deep groove ball bearing for high thrustloads,” which reduces rotational torqueby 60%

2

FeatureGrowth Strategy in the Automotive Market

Improving Fuel Efficiency of Internal Combustion
Engines, Commercializing Next-Generation EVs

In-Wheel Motor and One-Motor: Developing
Two Methods for Next-Generation EV Systems
Currently the most common type of vehicle using anelectric motor is the hybrid, which combines an internal
combustion engine and an electric motor. EVs, which use
only an electric motor, are expected to gain widespread
popularity in the near future, and NTN is focusing on developing
EV technologies.
There are several methods used for EVs. Two of the mainones are the one-motor method and the in-wheel-motor
method. In the one-motor method, a motor is substituted forthe engine in an internal combustion engine car. In thein-wheel-motor method, each car wheel has a motor built
into it. This has the advantages of securing more room in the
car’s interior and giving much greater freedom of vehicle
design. And with independent control of each wheel, cars canconduct “Lateral move” and “Pivot turn.”
NTN recognized the significance of the in-wheel-motor
method and in 2003 began research and development into the
In-Wheel Motor unit, a drive system equivalent to an internal
combustion engine. In 2007, NTN began test driving of cars
equipped with this unit. Research and development continued
and in April 2011, NTN’s EV System Division was established.
Besides drive systems, this group develops and accelerates
commercialization of steering systems and control systems.

33

Opening
ceremony ofShin-Tomei
Expressway

In regards to the one-motor method, we have developed theone motor type EV Drive System, with a two-speed automatictransmission that enables the car to reach high speeds.

NTN Demonstrates “Q’mo” Electric Commuterwith In-Wheel-Motor System at Tokyo Motor
Show, and Begins World’s First Demonstration
Tests on Public RoadsIn December 2011, at the 42nd Tokyo Motor Show, NTN
gave driving demonstrations of Q’mo, a two-seater
four-wheeled electric vehicle made to show the mainfeatures of the company’s In-Wheel Motor System Concept
for next generation EVs. Visitors saw the features that makethis vehicle special, such as the ability for “Lateral move” and“Pivot turn”.
In October 2011, NTN provided the government of Iwata
City, Shizuoka Prefecture with two converted EVs (internal
combustion engine cars converted to EVs) that are being used
to conduct the world’s first demonstration tests of government
EVs on public roads. Of the two vehicles, one is equipped

A Word from the Mayor of Iwata City

A Promising Future for
NTN as Iwata Gets Readyto Send EV Products
Around the World
Osamu Watabe
Mayor of Iwata City
Iwata City mayor rides in a test vehicle
equipped with in-wheel motor system

For many years, NTN has operated a production sitehere and has built an excellent relationship with ourcity. As well, the company opened an EV-products
development site here. With the aim of making our
relationship with NTN even stronger, our municipal
government decided to join in this EV test project.
The cars provided by NTN are currently being used for
official city business, and everywhere we drive all eyes
are on the vehicles. We are proud that this represents
a technology made in Iwata. We are well aware that NTN
and its products are indispensable to the manufacturingcity of Iwata, where there is a large concentrationof transport equipment-related companies. I urge
NTN to be an Iwata-based company for thedevelopment and production of EV products, and togo outside the walls of its group companies to assist
in the training of human resources for the local
Featurewith an “in-wheel motor system” and the other is equippedwith an on-board drive system (a motor in the vehicle). By
having Iwata City use these cars as government vehicles for ayear, NTN can gather and analyze data that will help improvethe electrical efficiency of the vehicles.
NTN is also working with the Shizuoka Prefectural
government in demonstration tests of a compact, two-seater
EV equipped with in-wheel motor system. Iwata City’s
converted EV and Shizuoka Prefecture’s compact, two-seater
EV garnered attention when they were taken for a test driveat the opening ceremony of the Shin-Tomei Expressway in
April 2012.
NTN is developing a variety of systems for next-generation
EVs and conducting demonstration tests of these systems invehicles as it works to bring them to market and lead the way
in making them global standards.

manufacturing industry.

Q’mo: Sharp Turning Capabilities Demanded of an Electric Commuter
NTN developed the Q’mo, a vehicle
with In-Wheel Motor System Concept
for next generation EVs that aims tomeet society’s growing demand
for a practical electric commuter.
Installing components like themotor and speed reduction
mechanism directly into the wheels
makes the drive shaft unnecessary.
And the rotation and steering of eachof the four wheels is synchronizedby an electrical signal.
These development makepossible “Lateral move” and “Pivotturn”, things not possible withconventional cars. The result is acommuter vehicle with the ability toturn sharply, a feature that users
have been waiting for.

Vehicle motion modes
Pivot turn

Point of rotation for steering

Each of the four wheels turns in
towards to car body to enable
pivot turns.

Here’s What the Q’mo Can Do• Drive a car front first into a garage,
then pivot turn inside to drive it out
front first.
• On a narrow dead-end road, use pivot
turn to get back out.
• Use lateral move to easily parallel park.
• Since the engine and drive shaft are
unnecessary, the car interior is more
spacious.

Lateral move

All four wheels turn 90° to thecar body to enable the car tomove sideways.

• Since it emits no CO2, the Q’mo canbe operated inside buildings.

Q’mo = Q + mo(bility)
The “Q” stands for “quattro” (independent
driving and steering with four wheels) and“quest” (search and pursuit)34

Social and Environmental Responsibility

We conduct a wide range of communitybased activities around the world.

Responsibility to Customers

Responsibility to Suppliers

We are building a worldwide quality information control
system and placing importance on communication
with customers.

We introduced a new quality information
control system called “G-QUICK,” which has
globally standardized the quality information
control methods and systems that we had
previously operated independently at ourvarious worldwide sites.

p37

Responsibility to Employees

We conduct training at our
production sites so that
employees can better carryout their manufacturing duties.

At Shanghai NTN Corp., we held QC circle
leader training sessions for newly appointed
managers where they could learn how toquickly analyze and deal with problems that
occur at production sites.

p43

35

At traveling product exhibitions, NTN
engineers learn about market needs directlyfrom customers, which helps us develop
products that better need their needs.

p38

We build a strong relationshipof trust with suppliers.

At NTN Manufacturing (Thailand) Co., Ltd.
(NMT), we honored suppliers achieving
excellence in quality and delivery.

p40

Responsibility to Local Communities

We carry out community service in the regions where
we do business.

NTN HOUDATSUSHIMIZU Corp. accepted
three local high school students as interns.
After a factory tour, the students experienced
a number of production processes including
lathe turning and grinding during theirthree-day internship.

p45

NTN Driveshaft, Inc. (NDI) in the U.S. took
part in a literacy festival sponsored by the
local library. Festival visitors enjoyed NDI’s
booth where they could have their namewritten in Japanese on a bookmark and makeanimals with origami papers.

p46

Global Environmental Preservation

We strive to reduce CO2 emissions and protect forests.

OKAYAMA Works is reducing its CO2 emissions
by upgrading to energy-efficient equipment.
The company expects to reduce emissions by
1,560 tons annually through measures including
installing high-efficiency air compressors
and converting compressor cooling water
pumps to inverter types.

At NTN-SNR ROULEMENTS (NTN-SNR) in
France, some of the older cooling equipment
still used HCFC (a type of CFC), and thecompany switched to refrigerants with lessglobal warming impact.

p55

In the NTN Komorebi no Mori forest at
KUWANA Works, the company held atree-planting ceremony together with NPO
Mori no Kaze.

p56

p54

Reduction of Waste

We strive to reduce theamount of waste generated
and to make effective use ofwaste resources.

We strengthen environmental management throughcontinuing eco-education and community exchanges.

To improve the quality of our internal
environmental audits and increase thenumber of auditors, we have employees
attend training conducted by an ISO auditor
training institute. The most recent training
brought the number of certified internal
environmental auditors to 250.

p53

At KUWANA Works, the company’senvironmental preservation managers took
part in symposiums held by the local
chamber of commerce and industry andother associations, where they gave
presentations on NTN’s connection to
renewable energy through its manufactureof bearings for wind turbines.

At NTN Bearing Mfg. Canada (CMF), a water
circulation system was installed to reduce
the amount of water used for tumblers. The
company succeeded in reducing annual
water use by 1,920 kl and halving theamount of wastewater.

p57

p53

36

Social and Environmental
Responsibility

Environmental Management

Responsibility to Customers

We work with suppliers and distributors to raise ourquality worldwide.
Quality Management Policy
Formulating and Strictly Implementing Annual
Quality Management Policies
Quality management is fundamental to a “Monozukuri”
company like NTN. We thus formulated a Basic policy ofquality as a basic concept for “Monozukuri”.
We also formulate quality control policies with each new
fiscal year so that we can continue to boost quality.

Standard (IRIS), the quality standard for the European railway
industry. This achievement complements the quality
management system certification of the Association ofAmerican Railroads that we received in 1986 andunderscores our high quality as a supplier to the rail industry.
NTN has also been certified for the AS/JISQ9100 and
NADCAP* standards for aerospace quality management.
* NADCAP: Operated by the Performance Review Institute (PRI), NADCAP is a
global cooperative accreditation program for special processes inaerospace-related industries.

Basic Policy of Quality
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)

Quality Slogan : Quality is our future~Quality paves the way for our future~

Quality Management Policy in the Fiscal Year
Ended March 31, 2012
Under our most important quality theme of “Ensure global
quality,” we are working to ensure appropriate quality so as
to maintain and raise customer trust in NTN, achieveunquestionable, superior quality that contributes tocorporate profits, and dramatically reduce the number ofcomplaints and defective products.

Building a Worldwide Quality Information
Control System
In the fiscal year ended March 31, 2012, we strove to boost
quality at our production sites in Japan and other countries.
In January 2012, we introduced G-QUICK, a new quality
information control system that has globally standardized thequality information control methods and systems that we had
previously operated independently at our various worldwide
sites. This system will speed up initial response to quality
proposals at our worldwide sites, as well as streamline quality
control work. In February 2012, we put out a second, revised
edition of our Quality Control Handbook ~Basic Quality
Guidelines~, which we first published in 2008. The handbook
details our Basic policy of quality and basic actions necessary
to ensuring quality. In Japanese, English, and Chinese
editions, the handbook has been distributed at approximately
100 sites, including NTN sites for manufacturing, technology,
R&D, and distribution, as well as NTN suppliers.

Quality Management System
Achieving Necessary Certification for
Manufactured Products
In the NTN Group, 33 production sites in Japan and overseas
and two sales sites have been certified for the ISO 9001
quality management system.
We have also been working to get our sites in Japan andaround the world that produce automotive products certified
for ISO/TS16949, a quality management standard that
automotive manufacturers demand that their suppliers
achieve. In 2010, NTN NEI Manufacturing India Pvt. Ltd.
(NNMI) was certified for this standard. This means that all 21
NTN production sites that make automotive products are
now certified.
In 2010, NTN became Japan’s first bearing manufacturer
to obtain certification under the International Railroad Industry

37

Japanese, English, and Chinese editions of the
Quality Control Handbook

Working with Suppliers to Improve Quality
The NTN Group strives to improve quality by holding supplierquality improvement meetings with suppliers of our materials
and parts, and by conducting quality audits at supplier locations.
At the annual supplier quality improvement meetings, we
present lectures by outside instructors, as well as case studies,that help our suppliers acquire knowledge and know-how thatallow them to improve quality. In the fiscal year ended March
31, 2012, a meeting was held at the NTN R&D Center in IWATA
Works and was attended by 115 supplier companies, 11 morethan the previous year. In addition to presentations by supplierson their improvement activities, the event had a lecture by anoutside expert on the theme of “changing your way of thinking
in order to eliminate mistakes.” Attendees praised the meeting,calling the case studies on common problems extremely useful
to business, and expressing a desire to put what was learnedin the case studies to practical use at their own companies.
Quality audits are conducted by the suppliers themselvesusing the NTN Group’s check sheet for quality criteria, andthis allows quality progress to be assessed. In the fiscal year
ended March 31, 2012, during quality month at NTN(November) we asked our 240 suppliers in Japan to conduct
audits to ensure they are certified for and are operating incompliance with quality management system standards, andthat they are properly controlling their management
resources. Based on the audit results, NTN conducts its own
on-site audits at the locations of suppliers and offers
assistance to those with quality issues.

Enhancing Customer Satisfaction
Marketing Activities that Take the View of
Customers and Distributors
The NTN Group strives to raise customer satisfaction bydetermining their needs and then having relevant divisions
work closely together in all processes: development, design,
manufacture, and provision.
All NTN Group sales companies in Japan and around theworld have not only a sales representative for each customer
and distributor, but also a technical manager. Through thissystem, we strive to understand the exact needs and wantsof customers, and to quickly find problems and offer
customers the best ways to solve them.
NTN sales sites in Japan conduct TQM (total quality
management) activities, in which sales managers takeNTN Holds Traveling Product Exhibitions andTechnical Seminars
We continue to send engineers to customer locations to holdtraveling product exhibitions and technical seminars that givecustomers a chance to learn about the performance andfeatures of our products and technologies and speak directly
to NTN about what they need and want.
In traveling product exhibitions, NTN engineers go tocustomer locations to showcase and publicize theperformance and technologies of our products. In the fiscal
year ended March 31, 2012, they introduced products
including those for EVs. At the technical seminars, engineers
explain the technology and handling of NTN products andlisten carefully to customer questions and concerns. Throughsuch direct dialog between NTN engineers and customers,
we can better assess customer needs and thus offer
products that give customers greater satisfaction.

Traveling product exhibit (Japan)

NTN Group’s overseas companies also provide as many
chances as possible to interact with customers. The TechnicalTraining Unit (TTU) of NTN Bearing Corp. of America (NBCA) has
a special vehicle in which engineers and sales representatives
tour customer sites around the U.S. to give training on
bearing basics and bearing use (through installation
demonstrations). More and more customers are requesting

A training session of the Technical Training Unit of
NBCA in the U.S.

38

Social and Environmental
Responsibility

A supplier quality improvement meeting (Japan)

education and training, as well as take part in weekly
meetings that allow them to reflect on actions and progress.
The goal is to have each sales representative think and act
from the customer’s perspective.

Responsibility to Customers

visits by this vehicle. In the fiscal year ended March 31, 2012,
the vehicle visited 90 companies in industries such as food,truck maintenance, large transportation companies, and steel
companies, with approximately 1,000 persons joining training
sessions. The vehicle has been refurbished with the aim offurther raising the level of satisfaction among customers.

Customer Satisfaction Surveys Show 3-Point
Overall Increase
Once a year, we conduct customer satisfaction surveys on
our products and services in which customers choose one offour levels of satisfaction in six survey items including quality,
cost, and delivery. Survey results go to relevant company
divisions to be reflected in improved products and services.
In the fiscal year ended March 31, 2012, we received
survey responses from 78 companies in Japan and othercountries, five more than the previous year. Responses in thelevel of “very good” or “good” for overall assessment were up
three points to 88%, and in the quality survey item, this figure
was 79%, a two-point increase.
The NTN Group is making global quality a top priority andhas introduced G-QUICK, a new quality information control
system that will effectively allow us to boost customer
confidence and satisfaction.

distributors to a meeting of our Domestic Distributor
Association to strengthen relations. The NTN Group’s
overseas companies in various countries conducted activities
that strengthened ties with their distributors.
In China, NTN (China) Investment Corporation was
strengthening relations with its distributors in a number ofways. In the fiscal year ended March 31, 2012, the company
drove its vehicles around to distributors to hold training
sessions on bearing handling and maintenance.
To deepen knowledge and understanding of bearings
among young staff members of distributors, we held basic
technology training attended by 32 distributors, withparticipants touring the Shanghai NTN factory and learning
about production processes.

NTN’s Domestic Distributor Association (Japan)

Overall Assessment of Customer Satisfaction Surveys(Fiscal year ended March 31, 2012)

Needs a lot of improvement

Very good

19 %

0%

Basic technology training for distributors in China

Needs slight
improvement

12%

Customersatisfaction
Fiscal year
ended March
31, 2012

A Word from a Distributor
Good

69 %

Expectations for Progress and
Growth Together with NTN
Ma JunPresident, AVIC Lutong Company Limited

Overseas Group Companies Strengthen Ties
with Distributors
The NTN Group works with the distributors who sell our
products to raise customer satisfaction. When we releasenew products, we hold briefings for distributors so that they
can relay all the necessary information to their end-users. We
also regularly hold a variety of workshops for new employees
and mid-career employees to give them a deeper
understanding of our products and technologies.
In the fiscal year ended March 31, 2012, we welcomed 58

39

We are headquartered in Guangzhou City and the bearings wesell come only from NTN. We have been ordering NTN bearings
for the railway industry since 1998. As all our employees havetraining and work experience in the railway industry, they cantherefore provide quality products and service based on
specialized knowledge. We will continue to make the most of
our comprehensive sales network, which spans all over China,
and technical support capabilities to advance sales ofbearings for machine tools, aerospace, wind power systems,
and other areas as we progress and grow together with NTN.

Responsibility to Suppliers

We’re building a partnership with suppliers for
quality control and environmental protection.
Procurement Policy

Communication with SuppliersGreater Local Procurement of Materials
and Parts

Promoting Exchange Between Overseas
Group Companies and Suppliers

The NTN Group has formulated a procurement policy
focusing on global procurement, fairness, and equality. We
have also formed a project team to speed up the movement
towards local production and local procurement, and to thisend we are in the process of forming partnerships in various
regions. We will continue to select suppliers based on ourpolicy of “on local site with local materials by local personnel”
and build a relationship of trust with suppliers.
We will also work with our suppliers in conducting CSR
activities based on internationally accepted codes of conduct
and standards of behavior.

NTN holds “Responsibility to Suppliers” meetings, where we
explain our procurement policy and trends in production
volume at each of our operating sites, and urge suppliers tocooperate in manufacturing and achieve certification for ISO
quality and environmental management systems. In the fiscal
year ended March 31, 2012, we held two of these meetingsfor 58 participating companies.
We also invite suppliers to lectures given by outside
experts that we hold as part of our employee training. Since
the fiscal year ended March 31, 2007, we have shared thejoy of mutual growth with our suppliers by holding annual
commemorative cherry tree-planting activities on their premises.
The NTN Group’s overseas companies also strive tostrengthen relations with suppliers. In December 2011,
Shanghai NTN Corp. held its China Supplier Meeting where it
urged suppliers to contribute to growing business, loweringcosts, and ensuring quality. It also presented three of the 34
suppliers in attendance with first place and excellence
awards. NMT in Thailand honored 17 of its suppliers forexcellent results in quality and delivery during 2011.

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

Social and Environmental
Responsibility

Maintaining Fair and Proper Business
RelationsInternal Audits Ensure ThoroughSubcontractor BusinessApproximately 80% of NTN suppliers are covered by Japan’s
Subcontracting Act. We therefore have a responsibility to
conduct fair trading with our suppliers.
Since establishing our Voluntary Audit Manual for
Subcontractors in January 1997, production sites have been
conducting voluntary audits to ensure they are abiding by the
Subcontract Law. When necessary, NTN’s procurement
division intervenes with audits and guidance. We also require
all procurement staff to attend subcontractor businessworkshops sponsored by the Japan Fair Trade Commission
and seminars held outside NTN. In the fiscal year ended
March 31, 2012, 14 production sites in Japan held voluntary
audits, with three of these requiring intervention by NTN’s
procurement division. Production sites that had issues were
examined for progress in improvement and given guidance.
We are currently making policy that will help us ensure fairtrading by our overseas group companies as well.

Supplier Meeting at Shanghai NTN Corp.

Certificate of excellence from NMT

40

Responsibility to Shareholders

We carry out timely, appropriate information disclosureand respond to requests for tours of our overseas
factories.
Streamlined Procedures for
Shareholders to Exercise Their
Voting Rights
Boosting Attendance at General Shareholder
Meetings through Early Notice andConvenient Dates
We have taken the following steps to streamline proceduresfor shareholders to exercise their voting rights:• Swiftly mailing our general shareholder meeting notice: The
law says that shareholders must be notified two weeks
prior to a shareholder meeting, but we send our notices
seven days earlier than that.
• Scheduling meetings that avoid the dates that mostcompanies set for such gatherings: We do this because wewant as many shareholders as possible to attend, taking
into account such factors as settlement and audit schedules.
• Broadly notifying of our general shareholders meetingthrough the internet and other media: We disclose ourgeneral shareholders meeting notice and other information
through the Tokyo Stock Exchange and through our
website to reach as many shareholders and investors as
possible. And for the sake of institutional investors in Japanand other countries, we participate in the Electronic Voting
Platform, which is managed by Investor Communications
Japan (ICJ), an entity formed by the Tokyo Stock Exchange
and other bodies.
• 1 Using electronic voting via the Internet: We accept
shareholder votes via mail and the Internet through the 5:25
p.m. close of business up to the day before the generalshareholder meeting.
2 We have methods for dealing with cases in which there
are overlapping votes by mail and the Internet, or where
shareholders vote multiple times over the Internet.
• Other efforts: We present some of the business report andsettlement data as graphs, photos, and other visuals tocomplement the meeting chairperson’s explanations andmake information in shareholder meetings easier tounderstand.

Prompt, Accurate, and Fair
Information Disclosure
Fair Information Disclosure Worldwide
NTN strives to disclose information promptly, accurately, andfairly with regard for shareholders and investors. We satisfy
timely disclosure requirements under Securities Listing
Regulations by presenting information through the Company
Announcements Disclosure Service on the website of theTokyo Stock Exchange. On the NTN website, we releasetimely information including our securities, quarterly report,
business results, annual and business reports, and materials
from our results meetings. For those who register on our
website for the NTN newsletter, we send an email with thelatest news as soon as it appears on our home page.

IR Activities
Overseas Factory Tours for Analysts
and Investors
Members of NTN’s top management lead our company’s
aggressive IR efforts.
At seminars for individual investors hosted by large
securities companies, NTN top management talk about ourcompany. They also host visits to production sites in Japan.
On a regular basis, our executives convene resultsmeetings, teleconferences, one-on-one gatherings, and otherregular briefings for analysts and institutional investors. They
also respond whenever there are questions or requests frominvestors. In the fiscal year ended March 31, 2012, wereceived many requests for tours of our overseas factories,
and we hosted a number of these tours at production sites in
China, Thailand, and other countries where we are working
hard to expand business.

NTN Included in SRI Indices
NTN Continues to be Included in Numerous
SRI Indices
NTN has been included in several socially responsible
investment (SRI) indices in the stock market for its aggressive
efforts to protect the environment and contribute to society.
In September 2012, we were chosen for inclusion in the
Dow Jones Sustainability Asia Pacific Index.

General Shareholder Meeting41Responsibility to Employees

We respect the diversity and human rights of ouremployees and we strive to create a comfortableworkplace.
Occupational Safety and Health
Stepping Up Safety and Health Management
Activities at Group Companies

Feature Article

2.00

1.83

NTN

1.75

1.62

0.08

0.18

2009

2010

National average for Japanese industry

1.61

1.62

1.50
1.00
0.50
0

0.26
2008

0.58
0.24
2011

2012 (Years ended

March 31)

Severity Rate
NTN
0.15

0.110

0.10

0.100

0.05
0

National average for Japanese industry

0.090

0.090

0.110

0.002

0.002

0.006

0.011

0.018

2008

2009

2010

2011

2012 (Years ended

March 31)

To promote
employee health andprevent accidents,
employees do daily
calisthenics in theworkplace. NTN NEI
Manufacturing India
Pvt. Ltd. (NNMI) began
pre-work calisthenics
Employees do morning calisthenics at NNMI in India
in the fiscal year ended 2012. Besides getting employees inbetter shape and thus contributing to safety in the workplace,these calisthenics also refresh their mental state and makethem more efficient at their jobs.

1st Global QC Circle Convention Held
Raising Quality and Employee Motivation

On July 28 and 29, 2012, the 1st Global QC Circle Convention was held at the Industrial
Technical Center (Kuwana City, Mie Prefecture) with the goal of having employees takethe initiative in improving quality standard globally. There were 16 teams, 12 fromoverseas sites and four from Japan, taking part, with a total of 106 participants from
NTN sites and group companies in Japan and other overseas sites.
With the QC teams giving presentations on their quality improvement projects, theconvention aimed to give all sites fresh ideas that they could use at their own company
to improve quality and cost-competitiveness, with the eventual result being the provision
to customers of the highest quality of products from NTN production sites.
The QC teams’ presentations were judged and Shanghai NTN Corp. took first place
for its project to raise operating capacity on product assembly lines.

There were 16 teams, 12 from overseas
sites and four from Japan

The presentation by the first place winner
Shanghai NTN Corp.

42

Social and Environmental
Responsibility

We work to create safe work environments based on a“safety first” spirit that respects people. We have therefore
created a safety and health management system based on
the criteria of the Occupational Safety and Health Management
System (OSHMS). As of the fiscal year ended March 31,
2012, all seven operating sites of the NTN Group in Japan
had been certified for OSHMS by the Japan Industrial Safety
and Health Association, and we are working towards getting
more sites certified.
In the fiscal year ended March 31, 2012, we continued
working on themes from the previous fiscal year: (1) conduct
thorough education on safety and health, (2) eliminate
workplace accidents, (3) promote physical and mental health,and (4) improve the level of safety and health in the NTNGroup. Despite these efforts, the number of workplace
accidents totaled 50 at all NTN Group companies in Japan,
an increase of three. This number included several accidents
resulting in time off work. We will therefore focus on,
especially at companies with multiple accidents, building an
improved accident prevention system and conducting
thorough safety education activities. In the area of mental
health, we hold regular training for management members
and supervisors, while employees receive counseling fromoutside counselors during regular health check-ups. Other
ongoing mental health support for employees includes NTN’s
in-house counseling service, the “Oasis NTN (program twicea month),” and the “Mental and Physical Health CounselingService” via phone or email.

Incidence Rate

Responsibility to Employees

Human Resource Development
Training Local Employees to Lead
Manufacturing Duties at Production Sites
Of NTN’s worldwide employees, 37% are in Japan and 63%
are in other countries, a figure that will increase as we expand
our business overseas through local production andprocurement. Accordingly, we are promoting international
exchange whenever possible in the development of thehuman resources who run our local production bases aroundthe world.
In the fiscal year ended March 31, 2012, a total of 75
employees from NTN Group’s overseas companies including
Shanghai NTN Corp. and Nanjing NTN Corporation went toJapan for technical exchanges and learning.
We also have an overseas training system in which we
send Japanese employees to overseas sites for one year. In
the fiscal year ended March 31, 2012, a total of six
employees went to NTN-SNR ROULEMENTS (NTN-SNR),
the NTN China Technical Center and others. We also havedomestic and overseas training and scholarship programsfor employees.
The NTN Group’s overseas companies also held theirown in-house training. Engineers from NTA Precision Axle
Corp. (NTA) in the U.S. went to the plant of Asahi Forge
Corporation in Japan, for a training course to train in thecasting press process to gain specialized knowledge incasting. As well, NTA sent two engineers to Takao Kogyo
Co., Ltd. to train in heat processing techniques, and two new

A Word From an Employee

6-Month Casting Training
Boosted My Technical Skills
Jason Coolidge
NTA Precision Axle Corp. (NTA)

The Great East Japan Earthquake of March 2011 struck while I
was taking my training in Japan. The entire country in chaos,and people were doing everything they could to help theircommunities recover from the disaster. Amidst this frantic
situation, the Maniwa Plant of Asahi Forge in Okayama
Prefecture was happy to take on my NTA colleagues and me fora training course. For half a year starting in June 2011, the teamon the Maniwa Plant casting line gave us intensive and effective
training. We NTA employees were able to form a team andeven got to work on the line itself. The experience was much
more than just on-the-job training. I am extremely grateful toAsahi Forge for giving me this valuable opportunity.

43

casting engineers to Asahi Forge of America Corp. for casting
line work safety training.
In July 2011, Shanghai NTN Corp. held QC circle leader
training for newly appointed management members andsupervisors. With the goal of having participants acquire theanalysis skills and methods for quickly dealing with on-site
control problems, 21 supervisor assistants took training
outside the company. Under the theme of raising basic
productivity, participants set theoretical and practical goals,
planned implementation strategies, and gave final
presentations on their project.
We will continue to thoroughly train employees at ourworldwide sites so that local employees can run our
production sites.

QC circle leader training at Shanghai NTN Corp.

Fair and Appropriate Employee Evaluation
NTN’s policy is to compensate employees with bonuses thatreflect company performance and with promotions and pay
raises that reflect an individual’s performance. Employee
performance evaluation is conducted fairly and appropriately
based on our employee evaluation system.
Salary consists of a basic salary combining age
consideration and job ability, as well as various allowances.
The job ability portion is based on employee evaluation, andthis evaluation is an overall rating that combines assessments
made by multiple people making judgments from numerous
angles.

Rewards for Employee Inventions
Rewarding Employees’ Inventions
To reward our employees’ inventions, we have established a
Patent Management Rule and a Patent Reward Rule and wehave clarified how patent rights are attributed and how thevalue of the award is calculated. Rewards are also made forforeign patents and for know-how and inventions considered
to be trade secrets. There is no upper limit to actual awards.
In the fiscal year ended March 31, 2012, 239 employees(cumulative) were rewarded for obtaining rights for 104 patents.

Respect for Diversity
A Comfortable Workplace for Women, Seniors,
and the Disabled
The NTN Group strives to build a workplace where a diverse
range of employees can work: a place where all employees
can use their unique personalities and abilities to the fullest.
We continue to increase the number of women we hire, andwomen currently account for 11.2% of the NTN Group in Japan,
up 2.2 points from the fiscal year ended March 31, 2011.
The NTN Group in Japan has a system under which
retirees can be re-employed (system for re-employment of
those in their early 60s). This contributes to stable
employment for our older employees. In the fiscal year ended
March 31, 2012, there were 362 employees working under
this system (including those continuing from previous years).
And so that disabled employees have the chance tocontribute to the company just as much as everyone else,
NTN created Dream Workshops at IWATA Works, KUWANA
Works, and OKAYAMA Works in the fiscal year ended March
31, 2005. As of the fiscal year ended March 31, 2012, there
were 11 people working in these workshops, an increase of
two over the previous fiscal year.

In the fiscal year ended March 31, 2012, 79 children weretaken care of at Bear Kids Land.

Respecting Human Rights
Building a Fair and Equitable Workplace with
Respect for Human Rights
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, and managers. We participate in theactivities of regional human rights organizations and take partin a variety of human rights exhibitions and seminars. We also
have Help Lines inside and outside the company that make iteasy for employees and others to seek advice. We also havemeasures against sexual harassment and power harassment,
and we have ongoing education on these issues for new
employees and newly appointed managers.

Benefit Systems
Promoting Exchange with Employees andTheir Families

As of the end of the fiscal year ended March 31, 2012,
disabled employees accounted for 1.73% of all NTN
employees. We will continue to hire new disabled persons.

Stressing a Work-Life Balance
NTN stresses a work-life balance, particularly in helping
employees work while raising a child. NTN has a number of
support systems that it encourages employees to use. These
include the Mom-back system, under which employees canseek re-employment after temporarily resigning to raise children;
Bear Kids Land, established in the fiscal year ended March
31, 2008 as a place within the company where parents canleave their children to be taken care of while working; and theChild-raising Support Declaration system, under which
employees write a child-raising plan and schedule that isshared with the entire workplace so that support is available.

Family summer festival at DMF in Germany

44

Social and Environmental
Responsibility

Packaging bearings in a Dream Workshop

Worldwide NTN Group companies strive to further exchangewith employees and their family members through events
such as family tours and festivals. NTN Kugellagerfabrik(Deutschland) GmbH (DMF) held a family summer festival inJune 2011. Despite bad weather that forced events to moveto inside the plant, participants enjoyed a range of activities.
In September 2011, NTN (China) Investment Corporationand Shanghai NTN Corp. held an autumn festival, where the
1,900 participants were provided with fun and excitement
through activities like a company exhibit, food stalls, a flea
market, and singing and dancing.

Responsibility to Local Communities

We strive to contribute to society as we conductongoing activities that help local communities.
Efforts in Japan
Fireworks Festival in Support of Victims of
the Great East Japan Earthquake
In July 2011, the NTN Group sponsored the Kuwana Suigo
Fireworks Festival in Kuwana City, Mie Prefecture in supportof victims of the Great East Japan Earthquake of March
2011. In moral support of those stricken by the disaster,
KUWANA Works, eight nearby NTN sites, and Seibu Jido Kiki
Co., Ltd. sponsored a 15-minute display of fireworks.
At the same location was the “Global QC Circle Convention,”where employees from the NTN group’s overseas companies
wore t-shirts proclaiming “Save Japan.” While enjoying thefireworks they contributed to donations for areas affected by
the disaster.

NTN Takes Interns from Local High School
As a new company in the Noto district of Ishikawa Prefecture,
NTN HOUDATSUSHIMIZU Corp. strives to get close to thecommunity. In July 2011, the company accepted three
students from Houdatsu High School as interns.
The three-day internship began with a factory tour andcontinued as the students experienced a number of
production processes including lathe turning and grinding.
The students commented that the internship gave themfirst-hand experience on the importance and difficulty of
manufacturing work.

High school interns get on-the-job experience

Kuwana Suigo Fireworks Festival

Supporting Healthy Bodies and Minds
through Children’s Sports

Cleaning Up the Neighborhood for More Than
5 Years

On the occasion of its 50th anniversary in the fiscal year
ended March 31, 2011, IWATA Works held the “1st NTN
Young Newcomers Baseball Competition” in November
2011. With the aim of fostering the sound development ofchildren, 16 teams of players were chosen from five local
elementary schools, and the tournament saw spirited games
fought under the bright sunshine.
The winning team received the championship banner anda souvenir baseball.

In August 2011, during Ministry of Land, Infrastructure,
Transport and “Tourism’s Road Awareness Month,” NTN
Powder Metal Corp. received the “Minister of Land,
Infrastructure, Transport and Tourism Award.”
This award recognizes the company’s more than five yearsof picking up litter beside the public roads adjacent to the site
and thus contributing to road safety. Around the middle ofevery week, about 40 NTN Powder Metal Corp. employees
pick up litter beside the roads and pull up weeds, as well as
sweep up the leaves and branches that have fallen off thecompany’s tall trees beside the roads.

The 1st NTN Young Newcomers Baseball Competition

Employees pick up litter and pull up weeds beside a public road45

Efforts at NTN Overseas
Sponsorship of a Local Traditional Sports
Event (France)

Visiting an Elementary School for the
Disabled (Thailand)

In the fiscal year ended March 31, 2012, NTN-SNR
sponsored three long-running local sports events: the 32nd
Marathon of Annecy Lake, the 24th Triathlon of Annecy Lake,and the 26th Cross Country Ski Race.
NTN-SNR employees take part as staff and race participantsin these events as part of making them a success.

The CSR staff and other employees of NMT make visits insupport of a local elementary school for the disabled. Twicea year, about 30 NMT employees visit the school, where
they provide lunch and play games with the approximately
200 children.
The company and employees also donate daily
necessities like stationery, toys and games, sweets, and rice.

The 32nd Marathon of Annecy Lake

NMT employees providing lunch to elementary school students

Teaching Children Japanese and Origami (U.S.)NTN Exhibits at “Shanghai Japan Week 2011”(China)NTN ran a corporate booth at “Shanghai Japan Week 2011,”
held in September 2011 at Shanghai International Studies
University to promote the allure of Japanese culture to thewhole of China.
Under the theme “NTN bearings, supporting thecontinued development of industry in an ever-growing China,”
the booth introduced NTN’s business in China and bearings
for industrial machinery and EV related products. Many
students and females visited the booth, with many taking thisrare opportunity to touch the bearings on display. This
created interest in the NTN brand and is sure to lead to futureenquiries about career opportunities with NTN.

Literacy festival

The NTN booth at “Shanghai Japan Week”

46

Social and Environmental
Responsibility

In May 2011, NDI took part in a literacy festival sponsored
every year by the Bartholomew County Public Library. This
event features a look at English as well as other languages,
like Japanese and Chinese, and their culture. About 3,500
people visited the festival.
The NDI booth proved popular as children could have theirname written in Japanese on a bookmark and learn how tomake animals with origami papers.

Environmental Management

We strive to strengthen environmental management
by improving the quality of internal audits andconducting ongoing environmental education.
Feature Article

Promoting the Use of Natural Energy
At the Advanced Technology R&D Center, we have established the “Testing Area of Natural
Energy Management.”

At the Advanced Technology R&D Center in Kuwana City,
Mie Prefecture, we focus on innovating fundamental
technologies. To realize “world’s tops” and “world firsts,”
we constantly advance and integrate technologies fortribology, materials, surface modification, and composite
materials in order to improve bearing functions, thus
creating revolutionary manufacturing technologies thatlead to environmental protection. Since the Great East
Japan Earthquake of March 2011, natural energy hastaken on increasing importance. In addition to our efforts
in the field of bearings for wind power systems, we arelooking to contribute to other areas of natural energy andto this end in December 2011 we established the “Testing
Area of Natural Energy Management” on the site of our
Advanced Technology R&D Center.
In addition to our existing facilities for solar power
generation and wind power generation, the new labs havesun-tracking solar power equipment, a pilot plant factory,
and a small smart grid that includes a charger for EVs.
Through our experiments in the cultivation and growing ofplants using natural energy, we are working to develop a
range of energy system technologies based on NTN’s
motion control technologies, that will allow us to help
society make more effective use of natural energy.

Sun-tracking solar power generation

Pilot plant factory

Electric powerfluctuation, monitoring
We develop sun-tracking systems and install these sothat we can verify and assess their power generation
capacity and power consumption.

Verification test room

Small wind power generation systems

We use natural energy to manage and operate the pilot
plant factory, while also testing possible new methods
and technologies for cultivating plants.

Electric Vehicles (EVs)
We develop electricity control
technologies that allow more
effective use of natural energy
and verify and assess theseunder actual use conditions.
This leads to the developmentof new products andtechnologies.

We try to improve bearing selection and device
control so that we can offer even more efficient
operational conditions.

47

The power storage system is used to provide energy
for the area as well as to charge EVs

Environmental Policy andManagement Rules
Revising Rules and Manuals to Strengthen
Environmental Management
Based on the NTN Group’s Environmental Policy, the purposeof which is to reduce environmental impact and ensure ourcompany’s continuous development, we have built anenvironmental management system centered around theCompany-wide Environmental Management Committee.
In the fiscal year ended March 31, 2012, we made revisions
to the Environmental Management Manual and the Internal
Environmental Audit Manual, as well as to the detailed
regulations of Pollution control, which was created to improve
management of poisonous substances. As well, we formulated
the Calculation and Reporting Guidelines for Manufacturing
By-Products, which summarizes unified calculation methods
for the by-products generated by manufacturing activities.

Environmental Management System
Aiming for Certification Within 3 Years ofStartup of New BasesNTN is obtaining ISO 14001 certification in Japan undermulti-site certification so that it can build an environmental
management system consistent over all sites. As of the fiscal
year ended March 31, 2012, 20 of our 24 sites in Japan havebeen certified, including Nippon Kagaku Yakin Co., Ltd.,
which had achieved individual certification before it became
an NTN subsidiary in September 2011. And 15 of 18 NTN
sites outside Japan have been certified. NTN makes it a ruleto have all new sites certified within three years of the startup
of operations. Below is the certification schedule for the fiscal
year ending March 31, 2013.
Operating Sites with ISO 14001 Certification
Date ofcertification

Operating site
RegionCompany

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

Multi-site certificationJapan

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

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

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

1999

11

Registration
Registration Registration
No.
body
JSA
JSAE176(Operating sites included)
Head Office, KUWANA Works, IWATA Works, OKAYAMA Works, NAGANO Works,
NTN Kongo Corp., NTN Mikumo Corp., NTN Engineering Plastics Corp.,
NTN Powder Metal Corp., Hikari Seiki Industry Co., Ltd., NTN Casting Corp.,
NTN Omaezaki Corp., NTN Mie Corp., NTN Fukuroi Corp., NTN Kinan Corp.,
NTN Kamiina Corp., NTN Bizen Corp., Advanced Technology R&D Center

NTN Tado Corp

2005

3

JSAE1058

JSA

Nippon Kagaku Yakin Co., Ltd.

2000

8

JQAEM0956

JQA

Elgin Plant

2000

6

111994

LRQA

Schiller Park Plant

2000

9

112115LRQA

NTN-Bower
Corp.

Macomb Plant

2000

6

111998LRQA

Hamilton Plant

2000

6

111999LRQA

NTN Driveshaft, Inc.

1999

12

A8478

UL

NTN USA Corp. Head Office

2000

4

0112005LRQA

NTK Precision Axle Corp.

2008

4

4000717LRQA

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

1999

7

287

KPMG

1999

6

201167-2

LRQA

FranceNTN Transmissions Europe
NTN-SNR ROULEMENTS *

2003

1

19479

AFAQ

2009

1

0448-4

UTAC

ThailandNTN Manufacturing(Thailand) Co., Ltd.

TÜV

U.S.A

CanadaGermany

China
India

2003

3

31634

Guangzhou NTN-Yulon Drivetrain co., Ltd. 2005

4104043247

TÜVShanghai NTN Corp.

2005

7

CH05/0489

SGS

NTN NEI Manufacturing India Pvt. Ltd.

2011

6

104071903

TÜV

Social and Environmental
Responsibility

3. Observance of laws and regulations and implementation ofthorough environmental management systems

Year Month

American NTN
Bearing Mfg. Corp.

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

Plant* Multi-site certification

Operating sites expected to be ISO 14001 certified
Operating site

RegionDate of certification
Year

Month

NTN HOUDATSUSHIMIZU Corp.

2012

7

NTN SHIKA Corp.

2012

7

NTN HAKUI Corp.

2012

7

NTN NOTO Corp.

2013

7

U.S.A

NTA Precision Axle Corp.

2014

12

BrazilNTN Driveshaft do Brasil

2014

12

China

NTN-LYC (Luoyang) Bearing Corporation

2014

12

Japan

48

Environmental Management

Environmental Impact ofBusiness Activities

water we use (the input) and the products, CO2, waste, andwastewater (the output) that are generated. We then do
everything we can to reduce our impact on the environment.
In the fiscal year ended March 31, 2012, we were able toreduce the amounts of CO2 and waste emissions despite anincrease in production volume.

Reducing the Environmental Impact over a
Product’s Entire Lifecycle
The NTN Group strives to reduce the environmental impact
over the entire lifecycle of our products. To this end, we strive
to understand the amount of raw materials, energy, andAt operating site in Japan

Raw materials

EnergyRaw materials
393,000 tons

Water

INPUT

Fuel
(gasoline, gas)

Steel materials: 389,000 tons
Non-ferrous materials: 4,000 tons

(crude oil equivalent)
21,200 kL

Electricity
536 GWh

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

Purchased amount(10,000 kL/year)of fuelElectricity
consumption

39.8

34.0

38.6

39.3

2.58

28.8

2.12
1.62

2008 2009 2010 2011 2012

(Years ended March 31)

Material
recycling*1

2.07

2.12

2008 2009 2010 2011 2012

(Years ended March 31)

Production process

Scrap metal
15,263 tons

583

Water
2,200,000 m3523

CO2 emissions
283,000 tons

(Years ended March 31)

Heat
Treatment

OUTPUT

35.3

31.1

25.0

29.0

28.3

Total landfilledamountWastewater
206

923

163
217

58

204

207

179

225

164

175

198

62

2008 2009 2010 2011 20122008 2009 2010 2011 20122008 2009 2010 2011 2012

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

220

2008 2009 2010 2011 2012

(Years ended March 31)

Assembly

Products(10,000 m3/year)*1 Material recycling: To recycle for use as a raw material *2 Thermal recycling: To recycle for use as fuel

49

237

(10,000 m3/year)

Use of circulating water
50,000 m3

Wastewater
1,980,000 m3(ton/year)

Water usage

Grinding
Polishing

Wastewater

Disposal ofindustrial waste
Total landfilled amount
62 tons

CO2 emissions (10,000 ton/year)536

2008 2009 2010 2011 2012

Forging
Turning

Disposal ofindustrial waste

538

446

Thermal recycling*2
Waste oil 4,651 tons

CO2

(GWh/year)

Environmental Accounting
Aggressive Investment in R&D forEnvironmental Protection
The NTN Group uses environmental accounting toquantitatively assess its environmental protection activities.
Environmental protection costs in the fiscal year ended
March 31, 2012 consisted of 1,106 million yen in
environment-related equipment, down approximately 13%
from the previous year, and related costs of 3,023 million yen,
up approximately 23%, for a total increase of 11%. The
increase was due to R&D (EV-related business) related toenvironmental protection and aggressive investment inrenewable energy. There were also costs for things likeenergy-efficient equipment and waste recycling.
The economic benefit of environmental protection
activities was 826 million yen, about the same as the previous
year. As for impact on environmental preservation, CO2
emissions were 283,000 tons, a 7,000 tons decrease due tofactors including high-efficiency compressors at OKAYAMA
Works and improved air conditioning in the needle plant at
IWATA Works. We continued to improve on reductions in
waste, by 0.2 points, with the recycle rate reaching 99.9%.

Facilities for wind power generation in the needle plant at
IWATA Works

Inverter-type compressors in NTN MIE Corp.

Environmental Preservation Costs
Classification

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

Equipment investment
Details

Costs

114

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

263

Costs of switching to energy-saving equipment

Expenses to preserve
the global environment

58

Resource recycling expenses

0529

Upstream / downstream costs

02

Costs of management activities

0335Work areas
internal costs

7

1,041
0
0
1,106

R&D equipment related to environmental preservation

1,266

Fiscal year ended
March 31, 2012

Cost of recycling and waste reduction measures,
cost of processing regular and industrial waste
Analysis related to green procurement
Labor costs related to the EMS and information disclosure(advertising and NTN reports) and the greening andbeautification of company grounds
R&D costs related to environmental preservation
Greening and beautification outside the company
Cost of soil samplingGrand total
4,129
3,727

2,461

Financial Effect of Environmental
Preservation Activities

Impact on Environmental Preservation
Indicator

1,755
13
12
3,023

Social and Environmental
Responsibility

Environmental equipment (dust collectors, particulate smoke
removal devices, and wastewater treatment equipment)
Energy-conserving equipment (compressors, lighting,air conditioning), etc.

Pollution prevention costs

R&D costs
Costs of social activities
Environmental remediation expenses
Total
Reference: Total for fiscal year ended
March 31, 2011

AmountDetails

Costs

Fiscal year ended
March 31, 2011

Total CO2 emissions

283,000 tons

290,000 tons

Reduction of waste

Recycle rate 99.9%

99.7%

Item
Global environment preservation
expenses, effects
Resource recycling expenses,
effects
Total
Reference: Total for fiscal year
ended March 31, 2011

Amount49
777(Millions of yen/year)

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

826
821

50

Environmental Management

Environmental Targets and Results for
the Fiscal Year Ended March 31, 201216 of 24 Targets Achieved
Every year, NTN sets targets in three areas: preservation of
the global environment, creation of a recycling society, andmaintenance and improvement of the environmental
management system.

In the fiscal year ended March 31, 2012, we focused on
areas including decrease of total CO2 emissions overseas,
and in Japan preparations for certification for the ISO 50001
energy management system, confirmation of management of
poisonous materials, greening activities, and regional
environmental protection activities.

Results of Environmental Management Activities in the Fiscal Year Ended March 31, 2012
PurposePreservation of the global environment

Reduce CO2 emissions

Reduce air, water, andground pollution

Targets for the fiscal year ended March 31, 2012
· Achieve total CO2 emissions of 283,000 tons/year or lessDomestic (Target emissions coefficient for power suppliers)· Achieve an 20% improvement in CO2 emissions rate (1.42) over the
fiscal year ended March 31, 1998 (emissions coefficient: 0.381)· Total CO2 emissions: 260,000 tons/year or lessOverseas · Achieve a 5% improvement in CO2 emissions rate over the fiscal
year ended March 31, 2007
· Reduce the use of substances designated by PRTR Law
Achieve a 48% reduction in substances designated under the oldlaw over the fiscal year ended March 31, 2007
Domestic Achieve a 1% reduction in substances designated under the newlaw over the fiscal year ended March 31, 2011
· Soil purification following closure of TAKARAZUKA Works

Participate in local
environmental activities

Creating a recycling society

Reduce waste materials

Domestic · Propose a plan for greening activities in the Kansai district
Overseas · Propose a plan for environmental preservation activities in the
Hokuriku district
Domestic· Work toward achieving zero emissions with a recycle rate of 99.8%· Reduce waste generation rate by 1% over the fiscal year ended
March 31, 2011

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

Maintaining and improving the environmental management system

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

ISO 14001 certification

Domestic
Overseas

ISO 50001 certification

Domestic
Overseas · Prepare a system for certification in Japan

Strictly abide byregulations,in-house standards,
and environmentrelated rules

Promote green
procurement· Certification of new sites
Certification overseas (NNMI)
Support for certification in Japan(HOUDATSUSHIMIZU Corp., HAKUI Corp., SHIKA Corp.)

Domestic · Confirm management of poisonous materials (conduct inspection
once a month)· Worked toward achieving zero emissions and achieved a recycle
rate of 99.9%· Achieved a 0.2% increase in waste generation rate over the fiscal
year ended March 31, 2011
· Worked toward achieving zero emissions and achieved a recycle
rate of 95%· Achieved a 2% increase in paper consumption over the fiscal year
ended March 31, 2012
· Reduced water usage rate by 3% over the fiscal year ended March
31, 2011· Reduced Styrofoam usage by 99% over the fiscal year ended March
31, 2000· Certification of new sites
Certification overseas (NNMI) completed
Support for certification in Japan(HOUDATSUSHIMIZU Corp., HAKUI Corp., SHIKA Corp.)· Participated in various seminars and gathered information· Confirmed management of poisonous materials (conduct inspection
once a month)· Carried out extraordinary confirmation of management progress inJanuary· Revised Head Office regulations and formulated confirmation rules· Receive green procurement paperwork from 100% of key suppliers· Received green procurement paperwork from 80% of key suppliers· Formulate and implement plan to substitute phthalate esters· Completed substitution of phthalate esters. Currently making
proposals to customers

Domestic · Conduct audits for environmentally hazardous substances at all sites· Conduct ongoing incoming analysis of environmentally hazardous
substances· Zero complaints of environmentally hazardous substances

Evaluation

Results for the fiscal year ended March 31, 2012
· Achieved total CO2 emissions of 283,000 tons/year or less(Target emissions coefficient for power suppliers)· Achieved an 20% improvement in CO2 emissions rate (1.42) overthe fiscal year ended March 31, 1998 (emissions coefficient: 0.381)· Total CO2 emissions: 275,000 tons/year or less
· Achieved a 2% improvement in CO2 emissions rate over the fiscal
year ended March 31, 2007
· Reduced the use of substances designated by PRTR Law
Achieved a 46% reduction in substances designated under the oldlaw over the fiscal year ended March 31, 2007
Achieved a 2% increase in substances designated under the newlaw over the fiscal year ended March 31, 2011
· Started preparatory construction for soil purification following
closure of TAKARAZUKA Works (Build oil retaining wall)· Completed proposal for greening activities in Kansai district
Scheduled to start in November 2012
· Participated in Ishikawa forest conservation activities· Audits of environmentally hazardous substances completed at all sites· Currently conducting ongoing incoming analysis of environmentallyhazardous substances· Zero complaints of environmentally hazardous substances

Overseas · Distribute the Green Procurement Standard to suppliers
Encourage suppliers andvendors to implement
environmental
management systems· English version completed but not yet distributed due to need forrevisions

Domestic · Certify the environmental management systems of key suppliers
95% or more certified· Certified the environmental management systems of key suppliers 95%

Comply withnew regulations

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

· Notified authorities of compliance with the revised Act on the
Evaluation of Chemical Substances and Regulation of Their
Manufacture, etc.(June)· Completed confirmation of effect on NTN of SVHCs under REACH· Complied with CLP and China RoHS

* CLP: Classification, Labeling and Packaging

51

Achieved

Not achieved

Environmental Targets for the Fiscal Years Ending March 31, 2013 and March 31, 2014
NTN Environmental Action Policy for the Fiscal Year Ending March 31, 2013
4. Development of environmental products and1. Preservation of the global environment
equipment
2. Creating a recycling society
3. Support for development of environmentally-friendly · Products for exhaust gas power generation,
micro hydro generators, etc.
products· Replace substances restricted under REACH 5. Maintenance and improvement of environmental
management systems(substitutes for phthalate esters and dibutyltin(1) Expansion of environmental management
systems· Certification for new international standard ISO

compounds)

50001: Have system in place for certification
and aim to be certified in the fiscal year ending
March 31, 2014
(2) Thorough management of poisonous
materials· Monthly confirmation of state of poisonous
materials management (Managers conduct
confirmation once every fiscal half)(3) Promote green procurement

Company-Wide Environmental Targets for the Fiscal Year Ending March 31, 2013 and the Fiscal Year Ending March 31, 2014
PurposePreservation of the global environment

Domestic
Reduce CO2 emissions

Reduce air, water, andground pollution

Targets for the fiscal year ending March 31, 2013

Targets for the fiscal year ending March 31, 2014

· Achieve total CO2 emissions of 275,000 tons/year or less(Target emissions coefficient for power suppliers)· Achieve a 22.5% improvement in CO2 emissions rate (1.38) over the fiscal
year ended March 31, 1998 (emissions coefficient: 0.381)· Achieve total CO2 emissions of 269,000 tons/year or less(Target emissions coefficient for power suppliers)· Achieve a 25% improvement in CO2 emissions rate (1.34) over the fiscal
year ended March 31, 1998 (emissions coefficient: 0.381)· Achieve total CO2 emissions of 270,000 tons/year or lessOverseas · Achieve a 5% improvement in CO2 emissions rate over the fiscal year
ended March 31, 2007

· Achieve total CO2 emissions of 262,000 tons/year or less
· Achieve a 7% improvement in CO2 emissions rate over the fiscal year
ended March 31, 2007

· Reduce the use of substances designated by PRTR Law· Completely eliminate 2-aminoethanol· Reduce N,N-Dicyclohexylamine by 30% over the fiscal year ended March
Domestic 31, 2011

· Reduce the use of substances designated by PRTR Law· 2-aminoethanol completely eliminated (maintained this)· Reduced N,N-Dicyclohexylamine by 70% over the fiscal year ended March
31, 2011· Soil purification following closure of TAKARAZUKA Works
Participate in local
environmental activities

Domestic
Overseas · Begin greening activities in Kansai district

Domestic· Work toward achieving zero emissions with a recycle rate of 99.8%· Work toward achieving zero emissions with a recycle rate of 99.8%(continuation)· Reduce waste generation rate by 2% over the fiscal year ended March
31, 2011· Reduce waste generation rate by 3% over the fiscal year ended March
31, 2011

Overseas · Work toward achieving zero emissions with a recycle rate of 97%· Reduce paper consumption by 2% over the fiscal year ended March 31,
2011
Preserve resources

Conduct ongoing greening and other environmental protection activities· Work toward achieving zero emissions with a recycle rate of 98%· Reduce paper consumption by 3% over the fiscal year ended March 31,
2011

Domestic · Reduce water usage rate by 3% over the fiscal year ended March 31,
2011· Reduce water usage rate by 5% over the fiscal year ended March 31,
2011· Reduce Styrofoam usage by 99% over the fiscal year ended March 31,
2000 (maintenance)· Reduce Styrofoam usage by 99% over the fiscal year ended March 31,
2000 (continuation)

Maintaining and improving the environmental management system

ISO 14001 certification

Domestic · Certification in Japan (HOUDATSUSHIMIZU Corp., HAKUI Corp., SHIKA Corp.)
Overseas · Preparation for conversion to multi-site certification (NTN TADO Corp.,
Nippon Kagaku Yakin Co., Ltd.)· Certification of all worldwide sites operation as of the fiscal year ended
March 31, 2011
· Certification of new production sites within three years of startup of
operations

ISO 50001 certification

Domestic
Overseas · Prepare a system for certification in Japan· Certification of designated energy management factories in Japan· Prepare a system for certification overseas

Thorough Managementof Poisonous Materials

Domestic· Through management of poisonous materials(Monthly confirmation by person in charge, confirmation by managers
once every fiscal half)· Ongoing implementation of items on left

· Receive green procurement paperwork from 100% of key suppliers· Formulate and promote plan for alternatives to phthalate esters
Domestic · Conduct audits for environmentally hazardous substances at all sites· Conduct ongoing incoming analysis of environmentally hazardous
substances· Zero complaints of environmentally hazardous substances· Ongoing implementation of items on left

Overseas · Distribute the Green Procurement Standard to suppliers· Establish green procurement system at supplier companies

Encourage suppliers andvendors to implement
environmental
management systems

Domestic · Certification of key suppliers’ environmental management systems
Overseas At least 95% have systems (maintained this)· Certification of key suppliers’ environmental management systems
At least 95% have systems (maintained this)Comply withnew regulations

Domestic
Overseas · Respond appropriately whenever there are revisions· Respond appropriately whenever there are revisions

Promote green
procurement

Social and Environmental
Responsibility

Creating a recycling society

Reduce waste materials· Soil purification following closure of TAKARAZUKA Works

52

Environmental Management

Environmental Audits

Environmental Education

Internal Audits at All Sites, Cross-Audits at
6 Sites

Raising Environmental Awareness throughConstant Education and Training

NTN undergoes external audits by ISO 14001 certification
institutes, as well as internal environmental audits of sites(once a year) and cross-audits, which are conducted
between operating sites (every three years). This improves
the level of our environmental management system.
In the fiscal year ended March 31, 2012, all sites underwent
internal audits and six sites underwent cross-audits.
ISO audits were conducted at eight sites in July 2011,
with the three-year multi-site certification approved forrenewal. However, in March 2011, a water quality inspectionof the septic tank at NTN KINAN Corp. revealed figures
above the allowable limit. There were two matters cited in theaudit including failure to report on the inspection following
measures taken, and there were five minor infractions suchas errors in the reporting procedures. Measures were thus
taken to deal with these issues.

NTN strives to raise environmental awareness through ongoing
eco-education for all levels of employees and management.
In the fiscal year ended March 31, 2012, we held training
on basic environmental policy and environmental
management systems for new employees, and training on
medium-term environmental targets and achievements for
newly appointed managers.
NTN Engineering Plastics Corp. held training on energy
efficiency and pollutants for all levels from the president down
to assistant managers.
At Shanghai NTN Corp., eco-education is part of new
employee orientation so that things like environmental policy
and environmental targets can be learned. At NTN
Manufacturing (Thailand) Co., Ltd., all employees receive
booklets with information on environmental protection, and inJune 2011 the company held an in-house eco-exhibit as partof Safety & Environment & Energy Week. NTN do Brasil
Produção de Semi-Eixos Ltda. enlists the help of a local
NPO, which puts on a play once a year to convey theimportance of environmental protection.

Training to Increase Number of Internal
Environmental Auditors and Raise Qualityof Audits
The NTN Group in
Japan holds
internal
environmental
auditor training led
by a top instructorfrom L. MarvinJohnson &Associates, Inc.,
Internal environmental auditor training at
an institute that
KUWANA Works
trains ISO auditors.
At training held in December 2011 at KUWANA Works,
there were 22 participants from 16 sites, including three inthe Hokuriku district that were aiming for ISO 14001
certification in July 2012. Participants got an overview of ISO,acquired the skills needed by an internal environmental
auditor, and used case studies to learn practical auditing
skills and points to keep in mind in conducting audits. Theselatest training sessions brought the number of NTN internal
environmental auditors to approximately 250.
With the aim of raising the quality of audits, NTN MIKUMO
Corp. hosted 22 internal environmental auditors to watch
videos of ISO 14001 internal audit case studies and discuss
how to conduct effective audits that would solve issues
discovered in previous audits.

53

Environmental Communication
Exchange with the Community in
Environmental Protection
NTN strives to deepen ties to the community throughenvironmental protection. In November 2011, NTN KONGO
Corp. joined in a symposium sponsored by the municipal
government that imparted knowledge and skills necessary forprotecting the environment. NTN KONGO Corp. employees
gave a lecture on environmental protection activities.
In February 2012, KUWANA Works took part in anenvironmental symposium sponsored by the local chamberof commerce and industry, where the company’senvironmental protection manager was a panelist and talked
to citizens in attendance about how NTN contributes toprotecting theenvironment by providing
bearings for renewableenergy products such as
wind power systems. The
other panelists also
discussed ways to makeeffective use of
An NTN manager was a panelist at an
renewable energy.
environmental symposium in Kuwana City

Preservation of the Global Environment

NTN production bases around the world strive to makeequipment energy efficient and to protect the environment
so that we can reduce total CO2 emissions.
Reduction of Total CO2 Emissions
NTN Group Companies in Japan

2.4% Reduction in Total CO2 Emissions
Under NTN’s three-year environmental plan, which got
underway in April 2011, we are targeting total CO2 emissionsof 269,000 tons (same as fiscal year ended March 31, 1991)
by the fiscal year ending March 31, 2014, and a 25%
decrease in the CO2 emissions rate against the fiscal year
ended March 31, 1998. Towards these targets, for the fiscal
year ended March 31, 2012, we set targets of total CO2
emissions of 283,000 tons (down 2.4% over the previous
fiscal year) and a 20% decrease in the CO2 emissions rate
against the fiscal year ended March 31, 1998. Thanks toaggressive efforts including upgrading to energy-efficientequipment in factories, we achieved both these targets.
For the fiscal year ending March 31, 2013, we have set
targets of total CO2 emissions of less that 275,000 tons anda 22.5% decrease in the CO2 emissions rate against the
fiscal year ended March 31, 1998.
Total CO2 Emissions (Sites in Japan)(10,000 tons/year)

40.0

35.3

30.0

31.1
25.0

29.0

28.3

27.5

26.9

energy-efficient equipment and improvement work so that the company
requesting the work can achieve energy efficiency with no initial investment.
The ESCO guarantees a certain decrease in energy costs due to the work,and the company pays this amount back to the ESCO within a certain period.

20.0
10.0
0

2008

2009

2010

2011

2012

2013

2014

CO2 Emission Rate (Sites in Japan)
1.78

1.50

1.46

1.56

1.54

1.45

Efforts in Saving Energy and Energy Efficiency,
Using Renewable Energy
In response to the summer energy shortage, in the fiscal year
ended March 31, 2012, we sought to save energy by turning

1.42

1.38

1.34

1.00

A Word From an Employee

0.50

Reducing Environmental
Impact While Raising Quality

0

1998

2008

2009

2010

2011

2012

2013

2014

TargetTarget(Years ended or ending March 31)

Upgrading to Energy-Efficient Equipment
in Factories to Reduce CO2 Emissions
In the fiscal year ended March 31, 2012, NTN bases worked
to reduce CO2 emissions through measures including
upgrading to energy-efficient equipment.
IWATA Works had CO2 emissions of 89,000 tons in thefiscal year ended March 31, 2011, which accounted for morethan 30% of all emissions by the NTN Group in Japan. Using
ESCO*, the company upgraded the air conditioners in its Iwata
needle bearing plant to the latest highly efficient heat pump

Shigeharu Hamaguchi
Equipment Supervisor, Heat Treatment Section
Heat Treatment Plant, KUWANA Works

In February 2010, the No. 1 Heat Processing Section of NTN
MIE Corp. began decreasing the amount of RX gas it uses
during heat processing in order to reduce environmental impact,
and the result was an annual decrease in CO2 emissions of
355 tons (equivalent to 17% of all CO2 reductions at NTN MIE
Corp.). At KUWANA Heat Treatment Plant, we are currently
seeking to reduce environmental impact while at the same time
boosting quality, and we are aiming to cut CO2 emissions by
630 tons a year (16% of all CO2 emissions at KUWANA Works).

54

Social and Environmental
Responsibility

TargetTarget(Years ended or ending March 31)

Emission rate (t-CO2 /million yen)

2.00

types, and introduced
stratified air conditioning
to boost energy efficiency.
The company expects to
reduce annual CO2
emissions by 790 tons
through these measures.
High-efficiency air compressors at
OKAYAMA works
OKAYAMA works
accounted for approximately 28% of all emissions by the
NTN Group in Japan in the fiscal year ended March 31, 2011.
The company used ESCO to introduce high-efficiency air
compressors, convert compressor cooling water pumps toinverter types, and upgrade to energy-efficient lighting. These
measures are expected to contribute to a 1,560-ton annual
decrease in CO2 emissions.
NTN MIE Corp. received a subsidy from Japan’s New Energy
and Industrial Technology Development Organization (NEDO) in
support of companies making effective use of energy, which it
used to upgrade to inverter-type compressors. This is expected
to contribute to a 400-ton annual decrease in CO2 emissions.
The Industrial Technical Center and Hikari Seiki Industry
Co., Ltd. converted a portion of their lighting tohigh-efficiency, long-life LED lighting.
* ESCO (Energy Service Company): The ESCO makes the initial investment inPreservation of the Global Environment

down lighting, cutting back on the use of air conditioning,
and using less copy paper. Between June 22 and the end of
August, all NTN bases turned off outdoor neon signs andturned off lights in daytime workplaces after 8:00 p.m. Theseand other efforts helped reduce electricity consumption by
the equivalent of 30 tons of CO2.
Part of our CO2 reduction efforts includes installing wind andsolar power at our sites, and as a result of this, power generationin 2011 was 638 KW, up 39 KW over the previous year.

Overseas Group

Fell Short of Targets for Total Emission and
CO2 Emissions Rate
For the fiscal year ended March 31, 2012, our targets were total
CO2 emissions of less than 260,000 tons and a 5% improvementin the CO2 emissions rate over the fiscal year ended March 31,
2007. Due to an increase in production volume, however, we
fell short of these targets: total emissions were 275,000 tons
and the CO2 emissions rate improved only 2%.
CO2 Emission Rate (Overseas Bases)(10,000 tons/year)

30.0

26.0

27.5

27.0

26.2

2011

2012

2013

2014

20.0
10.0
0

TargetTarget(Years ended or
ending March 31)

Reducing CO2 by Making Factory Equipment
Energy Efficient
At NTN-SNR
ROULEMENTS(NTN-SNR) in France,some of the older coolingequipment still usedhydrochlorofluorocarbon(HCFC), and the company
Air conditioners using new refrigerant at
NTN-SNRswitched to refrigerants
with less global warming impact. This resulted in a 135 ton
CO2-equivalent reduction. This switchover is scheduled totake place until the fiscal year ending March 31, 2014.
NTN Bearing Mfg. Canada (CMF) switched its fluorescentlighting to energy-efficient type and succeeded in reducing
CO2 emissions by 135 tons a year. NTN Kugellagerfabrik(Deutschland) GmbH (DMF) recycled coolant from waste
liquid and reduced CO2 emissions by 100 tons a year.

55

Striving to Reduce Environmental
Impact from Distribution
Changing Mode of Transport to Railway and
Improving Packaging
NTN is gradually changing its mode of shipping goods fromtrucks to railways. Starting in January 2012, we switched aportion of the deliveries between OKAYAMA Works and the
Kanto Distribution Center (Kanagawa Prefecture) from truck
to rail. We plan to switch about 100 containers (return trips) a
year to rail transport.
We estimate this will reduce annual CO2 emissions by
21.54 tons and annual crude oil use by 23.18 kiloliters.
To shorten the delivery distance from the Kuwana Export
Distribution Center, we are changing the port where our
products leave Japan from Nagoya Port (Aichi Prefecture) to
Yokkaichi Port (Mie Prefecture). Products began shipmentfrom Yokkaichi to France and Germany in April 2011 and to
North America in October. We estimate this will reduce
annual CO2 emissions by 1.91 tons and annual crude oil use
by 0.72 kiloliter.
Since April 2011, trucks making deliveries from the
Kuwana Export Distribution Center to Nagoya Port (Aichi
Prefecture) are being loaded with three palettes instead of
two to improve load efficiency. We estimate this will reduce
annual CO2 emissions by 2.75 tons and annual crude oil use
by 1.04 kiloliters.
In January 2012, we began trial use of eco-bands,
developed in-house by NTN to prevent polyurethane cases
stacked on palettes from being crushed during delivery. They
are resistant to friction and can be used repeatedly, whichmeans they contribute to less waste from customers and canlower distribution costs.
CO2 Emissions from Truck Transport
Target(kg/km)

0.600

0.583

0.583

0.561

0.550

0.535
0.521
0.531

0.500
0

Results

0.524
0.495

1999

2008

2009

2010

0.513
0.506
2011

0.507

0.502

0.502
2012

2013

Target(Years ended or ending March 31)

Protecting Biodiversity
Preserving and Repairing the Natural
Environment Around Sites
Around NTN sites, employees work to preserve the naturalenvironment and repair ecosystems.
In March 2012, representatives of Kuwana City and Mie
Prefecture joined as KUWANA Works held a tree-planting
ceremony at the NTN Komorebi no Mori forest together with
NPO Mori no Kaze.
NTN HOUDATSUSHIMIZU Corp. held an event under thetheme “Protect and nurture life in a community forest.”
Together with local citizens, employees created anenvironment conducive to fireflies by repairing a fresh stream
and releasing larva. In August 2011, NTN has received thecertification for forest conservation activities, an initiative of the
Ishikawa Prefectural government. This system is aimed atpromoting protection of community forests throughcooperative efforts by local companies, organizations, andNPOs. NTN was one of 34 organizations and schools certified.

(Americas) Taking Part in Electronics
Recycling and Tree-Planting
To celebrate Earth Day 2011 in April, 250 employees of NTN
Bearing Mfg. Canada (CMF) took part in an electronics
recycling event. In the company’s parking lot, CMF andnearby companies put used audio and video equipment, cell
phones, computer peripherals, and other electronics
products in recycle containers.
Every year in April, NTN Driveshaft, Inc. (NDI) receives
seedlings from Vallonia Nursery, an conservation groupdedicated to forest protection. Employees plant theseseedlings at their homes, and in 2011 they planted over
1,500 seedlings.

Electronics recycling at CMF

NDI employees receive seedlings(Asia) Participation in Cleanup Activities
NTN Komorebi no Mori

Recognizing year-round efforts toprotect and nurture local forests
Kunio Takiguchi
Secretariat
NPO Mori no Kaze

Mori no Kaze was founded in 2005 with the goal of “bringing
a fresh breeze to the forest.” We carry out forest environment
education based on hands-on forestry in order to makeforests that have been ignored for decades into valuable
sources of water, while at the same time abiding by safety andother rules. Normally, companies hold tree-planting events for
CSR purposes once or twice a year, but I think it’s wonderfulthat NTN takes care of a forest in the Tado region all year
round. I would like to see NTN create a forestry school that
fosters individuals who can protect the forest from thelong-term view; for example 20 years, or even 50 years, into
the future. Let’s roll up our sleeves together and finish the job
with smiles on our faces.

Cleanup by NMT employees

Shanghai NTN Corp. employees pickup litter

56

Social and Environmental
Responsibility

A Word from a Collaborating Partner

December 24, 2011 was “Big Cleaning Day” for NMT in
Thailand, when about 100 employees took part in a cleanup
in the neighborhood around the NMT plant. Participants
picked up litter on local streets as part of cleanup efforts.
Shanghai NTN Corp. holds cleanups of the area around its
premises twice a year with participation by about 1,800
employees. After seeing a lot of litter on the nearby streets,the company began these cleanups because it believed that
“we use the streets, so we should keep them clean.”Reducing Waste, Managing Environmentally Hazardous Substances

We work with suppliers to conduct green procurementin which we strive to reduce waste and preserve
resources.
Zero Emissions

Introduction of System Overseas to
Preserve Resources

Increasing the Recycling Ratio at
Production Bases
NTN defines zero emissions as landfill waste constituting
0.5% or less of total waste generated and we work towards
this by raising the recycling ratio.
In the fiscal year ended March 31, 2012, NTN FUKUROI
Corp. stopped landfilling the old cation paint that it uses
during electrodeposition painting and instead began recycling
it. This resulted in a recycling ratio for the NTN Group in
Japan of 99.9%, exceeding the target of 99.8%. As for waste
generation rate, this increased by 0.2% against the previous
fiscal year for the NTN Group, due to an increase in this figure
at IWATA Works and OKAYAMA Works following decreased
production for automotive products. As a result, NTN failed toreach its target of a 1% reduction in waste generation rate.
The NTN Group overseas had a recycling ratio of 95%, shortof the target of 97%. Efforts continue, however: bases in
Canada, Thailand, and China are recycling items like cardboard
and waste oil, and NTN-Bower Corp. in the U.S. is switching tousing a waste contractor that focuses on recycling waste.
In the fiscal year ending March 31, 2013, our targets are
to reach a 97% recycling ratio for NTN overseas and maintainthe recycling ratio in Japan at 99.8% or higher.
Recycle Rate and Landfill Waste
Landfill waste(Tons/year)

1,500
1,200
900

98.5

99.6

99.9

99.7

Recycle rate (%)
100

99.9

923

60

600

40

217

300
0

80

2008

2009

58
2010

204
2011

62
2012

20
0

(Years ended March 31)

Introduction of Management System for
Waste Processing
When disposing of industrial waste, companies are obligatedby waste processing laws to do things like have a contract
with a shipper or waste contractor; store a valid contractor
permit; and issue, use, and store a manifest (control manifest
for industrial waste). To ensure risk management of these, theelectronic management system in use at several bases sincelast fiscal year was introduced at all NTN bases in Japan in
April 2012.
This system will allow us uniform management of informationand standardization of work processes, and will makemanifest deadline management easier, thus reducing the riskof things like management mistakes and raising compliance.

57

At NTN Bearing Mfg. Canada (CMF), a water circulation
system was installed to reduce the amount of water used fortumblers in the rocker arm bearing production process. The
company succeeded in reducing annual water use by 1,920
kl and halving the amount of wastewater.
The Annecy plant of NTN-SNR has installed new
equipment that allows reuse of the salt and water that are
separated during distilling of water used in the cleaning
process after heat treatment by the salt bath furnaces. This
has reduced salt waste and wastewater by 350 tons a year.

New tumbler at CMF

Inspection of Industrial Waste Contractors
by All NTN Bases in JapanNTN Group companies in Japan inspect the premises ofindustrial waste contractors, mainly during June, which isdesignated as Environmental Month.
NAGANO Works observed three waste contractors using
an industrial waste contractor checklist created by the
National Federation of Industrial Waste Management
Associations. NAGANO Works checked that were no
problems with waste processing by looking at whether work
conformed to the companies business and outsourcing
standards, and by inspecting workplaces and work
processes. NTN Group companies in Japan will continue toobserve their waste contractors.

Managing Air, Water, andSoil Pollutants
Soil Cleanup Under On-Site Generator of
IWATA WorksIn April 2011, IWATA Works did a survey of soil under theon-site power generation building after removing thebuilding’s equipment, and the soil was found to contain oilfrom the generator’s oil storage pit.
The oil was engine lubricant, and it was confirmed thatpollution had not spread beyond the building. All soil
containing oil was removed and then filled back in as cleaned
soil. Work was completed in July 2011.

Reducing PRTR Substances
NTN is reducing the amount of substances designated under
the PRTR Law (Pollutant Release and Transfer Register) thatit handles.
The PRTR Law was revised in November 2008 and in thefiscal year ended March 31, 2011, the number of designatedsubstances was increased. For this reason, targets for the
fiscal year ended March 31, 2012 were set according towhether they were under the original PRTR Law or therevised PRTR Law. The target for original PRTR Law
substances was a 48% reduction against the fiscal year
ended March 31, 2007, and for revised PRTR Law
substances it was a 1% decrease against the fiscal year
ended March 31, 2011. Unfortunately, neither of these goals
was achieved due to production increases.
For the fiscal year ending March 31, 2013, our target is todecrease the amount of PRTR substances we handle, which
includes completely eliminating 2-aminoethanol.
Usage of Substances Designated by the PRTR Law(Tons/year)

120

114.2
69.1

80

51.7

66.9

60.7

40
0

2008

2009

2010

2011

2012

(Years ended March 31)

Concurrent Survey of BNST Specified
Prohibited Substances
To comply with chemical regulations in Japan and othercountries, NTN Group companies continuously survey the
raw materials, parts, and materials that they procure.
In the fiscal year ended March 31, 2011, we conducted anall-encompassing survey at major suppliers in Japan andoverseas for the 46 substances of very high concern (SVHC)
designated under Europe’s REACH regulations.
In the fiscal year ended March 31, 2012, with revisions to
Canadian laws for chemicals, BNST (an alkylated
diphenylamine sold as an anti-oxidant) went on the list of
possible new additions to Canadian designated prohibited
substances. All relevant suppliers underwent concurrent
surveys, and all products, parts, materials, and secondary
materials that NTN had ordered were inspected to see if they
contained BNST and if so, how much.
NTN uses certain rubber parts that contain phthalate
ester, an SVHC under REACH. We aim to completely

Green Procurement
Revision of Standard to Comply with
Overseas Chemical Regulations
Under NTN Group’s Green Procurement Standard, we workwith the suppliers who provide us with raw materials, parts,
and indirect materials to preserve the environment andimprove environmental performance.
In the fiscal year ended March 31, 2011, we formulated
the Green Procurement Operation Manual, which clarifies theroles of each NTN division.
In the fiscal year ended March 31, 2012, we needed torespond to several developments: the addition of new SVHCs
to REACH; and the addition of BNST to the list of possible
designated prohibited substances under Canadian laws. We
therefore explained our revised Green Procurement Standard
to suppliers in the middle of March, and we asked them tosubmit documents such as a declaration of non-use of theprohibited substances, and, in the case that prohibited
substances are contained, a declaration to this effect.

Total of 120 Hazardous Substances Auditors
NTN Group companies conduct hazardous substances audits
at suppliers (particularly environmentally hazardous substances).
The people who conduct these audits have completed
hazardous substances auditor training and are licensed as
quality internal auditors.
In the fiscal year ended March 31, 2012, we strove to turnout new auditors by holding training at IWATA Works,
KUWANA Works, and other bases. As of the end of the fiscal
year ended March 31, 2012, we had approximately 120
hazardous substances auditors.

58

Social and Environmental
Responsibility

Responding to Regional Laws for
Chemical-Related Law

eliminate this substance by March 2013. In the fiscal year
ended March 31, 2012, we completed selection ofsubstitutes and began making proposals to customers.
In 2009, there were revisions to Japan’s Law Concerning
the Examination and Regulation of Manufacture, etc. of
Chemical Substances. As of April 1, 2011, companies are
obligated to notify Japan’s Ministry of Economy, Trade andIndustry if they are importing or manufacturing at least 1
ton/year of chemicals. To comply with the revised law, NTN
surveyed the amount of chemical substances contained in
the pharmaceuticals (lubricants such as grease, resin, etc.)that it imports. In June 2011, we completed the proper
notification process.

Third-Party Opinions

NTN Report 2012 Third-Party Opinions
Sachiko Kishimoto Executive Director, Center for Public Resources Development
Since 2010, NTN has published the NTN Report, which integrates an annual
report and a CSR report. Here, we present a third-party opinion on the NTN
Report’s social and environmental aspects.
First, let’s look at the necessity of integrating management and social
responsibility. Integrated reports are created with the aim of combining
management strategy and business activities with sustainability. In other words,
consideration for sustainability is not just for the sake of responding to requests
from the public; a company should reflect its contributions to creating asustainable society in its management strategy and plans with the understandingthat this will bring business opportunities in the medium and long term.
In this regard, NTN’s flagship product, bearings, should be understood as
eco-products, which, as the company proclaims “underpin the rotating parts ofmany types of machinery, reducing friction and thus reducing energy use” and help
NTN in its quest to create value for society through its business. I am also
impressed with how the company is working to strengthen its environmental
management systems at all bases.
However, as far as I can tell from looking at this report, the financial andnon-financial information is merely listed and reported; it is not integrated into the
management aspect. In future, I would like to see NTN make it clear that its creed
and policy is to seek sustainability in management.
I would also like NTN to take a medium- and long-term view in deeply
analyzing exactly where it should focus its efforts in the non-financial aspects,
meaning society and the environment. NTN mentions business risk, and I think thecompany should include analyses of the effect that social and environmental risk
have on business. It should also work on setting and following targets for sociallyrelated key performance indicators, and report on the correlation between theseand business.
Second, let’s look at the need to disclose information to stakeholders. On
June 14, 2012, NTN and some of its former executives were charged by the Fair
Trade Commission with violating the Antimonopoly Act and were indicted by the
Tokyo District Public Prosecutors Office. As well, NTN subsidiaries in Europe andthe U.S. are being investigated for violating competition laws. Although NTN has
since built a stronger compliance system, it is very likely that these legal infractions
will have a major effect on the company’s business performance. NTN’s executives
should continue providing shareholders with a clear explanation of what happenedin these cases.
Third, let’s look at how NTN’s globalization relates to its social responsibility. As
the company accelerates its pace of entry into the world’s growth regions, it isconducting more manufacturing and procurement locally. Although this report
gives a fixed description of the social issues that NTN is tackling as it globalizes,
this description is only given in relation to business activities. And in regards to thescope of NTN’s social and environmental efforts, it’s difficult to tell whether these
efforts apply only to Japan or to other countries as well. I hope to see NTN clarify
its policies on major areas that affect local society, such as fair business dealings,
human rights, and communities, and report on the progress it is making in these areas.

59

Sachiko Kishimoto
Biographical Information
Worked for a private think-tank
before taking up her current positionin 2000. Areas of specialty include
promoting the culture of donating,management support for NPOs,
corporate assessment from asocial aspect, and companies that
contribute to society. Officer for
The Japan Fundraising Association
and The Japan Association ofCharitable Organizations.
Co-Chairperson of the CSR Review
Forum-Japan.

Financial Review

Net Sales

Sales by Business Segment

Net Sales by Region

600

Bearing
Constant-Velocity Joints
Precision Equipment and Other Product(Billions of Yen)
Industrial Machinery
Automotive
600
Aftermarket & Distributor

500

500

500

400

400

400

300

300

300

200

200

200

100

100

100

(Billions of Yen)0

2007 2008 2009 2010 2011 2012

(Years ended March 31)02007 2008 2009 2010 2011 2012

Scope of Consolidation
The scope of consolidation as of March 31, 2012 consisted of NTN
Corporation and 61 consolidated subsidiaries (14 domestic and 47
overseas subsidiaries). A total of 9 affiliates (all overseas affiliates)
were accounted for by the equity method. The following changes tothe scope of consolidation and application of the equity method
were made during the fiscal year under review.
Consolidated Subsidiaries(8 companies joining NTN Group)
SNR Argentina
NTN AKAIWA Corp.
NTN MANiSA OTOMOTiV LiMiTED S¸ iRKETi
Nanjing NTN Corporation
NTN BEARING INDIA PRIVATE LTD.
PT. NTN MANUFACTURING INDONESIANTPT CO., LTD.
IFA-Antriebstechnik G.m.b.H.
Affiliates (one company less)
IFA-Antriebstechnik G.m.b.H(Years ended March 31)

Americas

Japan
EuropeAsia and Others(Billions of Yen)

600

02007 2008 2009 2010 2011 2012

(Years ended March 31)

Net Sales and Earnings
Net sales were up but operating income was down. Targets
were not achieved due to factors including the strong yen,
the Thai floods, and financial crises in Europe.
Sales Performance
Consolidated net sales for the fiscal year ended March 31, 2012amounted to 543,468 million yen, an increase of 13,412 million
yen (2.5%) from the previous fiscal year. Overseas sales totaled
350,020 million yen, an increase of 6,560 million yen (1.9%) year
on year. Overseas sales accounted for 64.4% of net sales overall(Europe 24.5%; the Americas 22.9%; and Asia and others 17.0%),
a decrease of 0.4 percentage points from the previous fiscal year.

Net sales: 543.5 billion yen, a year-on-year increase of 13.4
billion yen (2.5%)
Operating income: 20.7 billion yen (operating margin of 3.8%)
Interest-bearing debt: 272.0 billion yen, an increase of 48.7
billion yen from March 31, 2011
Capital expenditures: 54.4 billion yen, a year-on-yearincrease of 24.7 billion yen (83.2%)
Dividend: Full-year dividend of 10 yen per share (interim
dividend of 5 yen per share and year-end dividend of 5 yen
per share)

Net Sales by Region
In Japan, net sales were down overall in the automotive market due
to decreased customer demand caused by the Great East Japan
Earthquake and the Thai floods. In the industrial machinery market,
net sales increased in sectors including construction machinery andmachine tools, and the aftermarket and distributor markets also
saw an increase. Exports were up in all regions thanks to factors
including a recovery in customer demand. As a result, net sales
were 193,448 million yen (up 3.7% over the previous fiscal year).
In Europe, automotive market sales remained at about theSummary of the Fiscal Year Ended March 31, 201260

Consolidated
Financial Statements

During the fiscal year ended March 31, 2012, Japan’s economy
continued its recovery from the Great East Japan Earthquakeof March 2011, but it also saw stagnant exports due to thelengthy period of the strong yen. In the overseas economy,
factors including the Thai floods, financial crises in Europe,and fears of monetary restraint in China have slowed theworld’s economic recovery.
Against this background, the NTN Group is expanding
business with a focus on growth markets, and it is increasing
sales in the industrial machinery and the aftermarket anddistributor markets.

Net Sales and Earning by Business Sector
The industrial machinery market was affected by the Thai floods, but
in Japan, the Americas, Europe, and Asia and others, sales increased
thanks to demand recovery in sectors including construction
machinery, machine tools, wind turbines, and agricultural machinery.
The resulting net sales were 106,619 million yen. Operating income
benefited from increased sales to reach 4,839 million yen.
In the aftermarket and distributor markets, sales increased ona recovery in customer demand in Japan, the Americas, Europe,and Asia and others, a positive trend that resulted in net sales of
93,960 million yen. Operating income benefitted from increased
sales to reach 19,065 million yen.
In the automotive market, sales increased in the Americas andChina on a recovery in customer demand. In Japan and other Asianmarkets, however, sales were down due to factors including
decrease in customer demand caused by the Great East Japan
Earthquake and the Thai floods. This resulted in net sales of342,889 million yen, about the same as the previous fiscal year, withsome effects from foreign exchange rates. Due to factors including
foreign exchange rates, the operating loss was 3,180 million yen.

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

Operating Income/Operating Margin
Operating income
Operating margin(Billions of Yen)

(%)

50

10

40

8

30

6

20

4

10
0

2

2007 2008 2009 2010 2011 2012

(Years ended March 31)

0(Billions of Yen)

(%)

30

6

20

4

Capital expenditures
Depreciation(Billions of Yen)

60
50
40

10

2

0

0

30
20
10

-10

2007 2008 2009 2010 2011 2012previous year’s level, while in industrial machinery, sales were up
in sectors including agricultural machinery and general industrial
machinery, while the aftermarket and distributor markets also saw anincrease. However, unfavorable foreign exchange rates kept net sales
to 132,969 million yen (up 0.1%), about the same as the previous year.
In the Americas, sales were up overall in the automotive
market due to factors including a recovery in customer demand.
In industrial machinery, key sectors like construction machineryand agricultural machinery saw sales increases, as did theaftermarket and distributor markets.
As a result, foreign exchange rates were partly responsible fornet sales of 124,643 million yen (up 5.6%).
In Asia and other areas, in the automotive market sales were up
in China. In other parts of Asia, however, despite contributions fromthe start of mass-production for new customer orders, factors likethe Thai floods caused an overall decrease. In industrial machinery,sales increased in wind turbines and general industrial machinery,
as well as in the aftermarket and distributor markets. However,unfavorable foreign exchange rates kept net sales to about the same as
the previous year (a 0.3% decrease), 92,408 million yen.
Cost of Sales and Selling, General and Administrative(SG&A) Expenses
The cost of sales was 452,975 million yen, up 0.8 percentage
points and representing 83.3% of consolidated net sales. This was
mainly the result of an increase in fixed costs such as labor costs.
Selling, general and administrative (SG&A) expenses were
69,769 million yen, representing 12.8% of consolidated net sales,
the same as in the previous fiscal year.
Earnings
Looking at earnings, there were factors (greater scale of business,decreased proportional costs, etc.) contributing to an increase andfactors (increased labor costs, business expenses, losses on
exchange rates, etc.) contributing to a decrease. As a result, theoperating income for the term was 20,724 million yen, down
3,836 million yen over the previous fiscal year. The operating
margin decreased 0.8 percentage points to 3.8%.
Other expenses amounted to a net expense of 4,367 million
yen. Major contributing factors were a gain on sales of fixed assetsof 1,202 million yen, a loss on devaluation of investment securitiesof 2,105 million yen, earthquake-related expenses of 744 million
yen, restructuring expenses of 580 million yen, and a loss on salesof fixed assets of 107 million yen.

61

Capital Expenditures and Depreciation

Net income (Loss)
Ratio of net income (Loss) to sales-2(Years ended March 31)02007 2008 2009 2010 2011 2012

(Years ended March 31)

As a result, income before income taxes was 16,357 million
yen, down 6,498 million yen from the previous fiscal year, and net
income was 5,993 million yen, down 8,406 million yen. Net income
per share was 11.27 yen for the year under review.
The year-end dividend for the fiscal year under review totaled 5
yen per share. Together with the interim dividend of 5 yen per share,
the dividend for the full fiscal year amounted to 10 yen per share.

R&D and Capital Expenditures
Increase in Both R&D Costs and Capital Expenditures
R&D Costs
R&D costs for the fiscal year under review were 17,157 million yen,
up 1,460 million yen and representing 3.2% of consolidated net sales.
In the industrial machinery market, NTN is positioning as key
business sectors wind turbines, a form of new energy with promising
global growth, and the sectors of rolling stock, aerospace, machine
tools, and construction machinery, which all require state-of-the-art
bearing technology. We are working to reduce environmental impact
by developing compact, reduced-weight products with long life andlow-torque, and by developing new products that meet customer
needs for precision and speed, while at the same time focusing on
basic technologies that will make us more competitive, and adding
value by modularizing products such as sensors.
In the automotive market, electrization is occurring at anaccelerating pace, and we have developed and successfully tested
system products for next-generation EVs, including our in-wheel
motor system. In October 2011, road tests got underway on
converted EVs equipped with NTN’s in-wheel motor. For
conventional internal-combustion vehicles, we are contributing tocars with better gas mileage and lower environmental impact bydeveloping products that are lighter and have lower torque.
Capital Expenditures
The main focus of capital expenditures was on increasing production
capacity, labor savings, and rationalization, maintaining and upgrading
existing facilities, improving safety, and conducting R&D for new products.
In Japan, capital expenditures were 18,055 million yen, withmain projects including construction of new plant buildings at
NTN NOTO Corp. and NTN AKAIWA Corp.
In Europe, capital expenditures were 7,807 million yen, withmain projects including expansion of bearing production
equipment at NTN-SNR ROULEMENTS.
In the Americas, capital expenditure were 10,518 million yen,accounted for by the installation of bearing production equipment

Inventories/Inventory Turnover Ratio

Interest-Bearing Debt

Inventories
Inventory turnover ratio(Billions of Yen)

150

(Times)6(Billions of Yen)

300
250

100

4

200
150

50

2

100
50

0

2007 2008 2009 2010 2011 20120(Years ended March 31)02007 2008 2009 2010 2011 2012at the new plant of NTA Precision Axle Corp. and other expenditures.
In Asia and other areas, Shanghai NTN Corp. underwent
expansion of its plant building and expansion of bearing production
equipment, while Nanjing NTN Corporation and NTN-LYC(Luoyang) Bearing Corporation constructed new plant buildings,
resulting in capital expenditure of 18,180 million yen. After adjustingfor 119 million yen in equipment transfers between segments, total
capital expenditures for the fiscal year under review were 54,441
million yen, an increase of 24,740 million yen.
All expenditures were funded from internal funds and short-termloans. Depreciation for the fiscal year under review amounted to 34,175
million yen (down 1.761 million yen from the previous fiscal year).

Financial Position and Cash FlowsThe shareholders’ equity ratio was 28.4%, down 3.2 percentage
points. Total net assets per share, based on the number of shares
outstanding over the end of the previous fiscal year, were 370.19
yen per share (a decrease of 5.86 yen per share over the end of
the previous fiscal year). Interest-bearing debt amounted to271,978 million yen, an increase of 48,694 million yen (21.8%) fromthe end of the previous fiscal year. Taking into account the 3,008
million yen decrease from currency adjustments, interest-bearing
debt increased by 51,702 million yen. The ratio of interest-bearing
debt to total assets was 39.2% (up 3.9 percentage points).
Net working capital was 80,024 million yen, an increase of
30,954 million yen from the end of the previous fiscal year. The
current ratio was 128.3% (an improvement of 10.1 percentage
points over the end of the previous fiscal year).
The inventory turnover ratio for the fiscal year under review
was 3.5 times (0.4 times down over the end of the previous fiscal
year), while the turnover ratio of total assets was 0.8 (same as theend of the previous fiscal year).
Net cash provided by operating activities was 17,052 million yen,decrease of 27,451 million yen, or 61.7% over the end of the previous fiscal
year. This mainly reflected inflows in the form of income before income
taxes of 16,357 million yen, and depreciation and amortization of 34,175
million yen; offset against outlays of an increase of 20,216 million yen in
inventories, and an increase in trade receivables of 11,754 million yen.
Net cash used in investing activities increased 20,656 million
yen, or 64.2% over the end of the previous fiscal year, to 52,843
million yen. This was due mainly to outlays of 49,102 million yen
for purchases of property, plant, and equipment, and 2,300
million yen for acquisition of investments in affiliates.
Net cash provided by financing activities was 47,249 million yen(a 6,696 million yen outlay in the previous fiscal year). This mainlyreflected an inflow from long-term loans of 68,043 million yen, set
against a repayment of 25,523 million yen for long-term loans.
Factoring in the 959 million yen increase due to the effect of
exchange rate charges, along with an increase of 107 million yen in cash
and cash equivalents from newly consolidated subsidiaries, cash andcash equivalents at the end of the fiscal year were 52,606 million yen, up
12,524 million yen (31.2%) over 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 minus 35,791 million yen.
The proportion of net cash provided by operating activities to net
sales was 3.1%.

62

Consolidated
Financial Statements

Increase in Inventories of 18.1 Billion yen. Interest-Bearing
Debt Also Increased, by 48.7 Billion yen
Total current assets at the fiscal year-end amounted to 362,318
million yen, an increase of 43,624 million yen, or 13.7%, from theend of the previous fiscal year. This is mainly the result of an increase
in inventories of 18,122 million yen, an increase in cash and cash
equivalents of 12,524 million yen, and an increase in trade receivablesof 9,788 million yen. Property, plant, and equipment was up 19,550
million yen (7.9%) to 265,682 million yen. This was mainly due to anincrease in machinery, equipment, and vehicles of 19,414 million yen
and an increase in construction in progress of 16,489 million yen.
Investments and other assets were down 1,917 million yen (2.9%)
from the end of the previous fiscal year to 65,258 million yen. This
mainly reflected a decrease of 2,977 million yen in investment
securities. As a result, total assets were 693,258 million yen, up
61,257 million yen (9.7%) over the end of the previous fiscal year.
Current liabilities were up 12,670 million yen (4.7%) over the endof the previous fiscal year to 282,294 million yen. This was mainly
due to an increase in short-term loans of 6,048 million yen and anincrease in trade payables of 4,010 million yen. Long-term liabilities
were up 46,814 million yen (30.8%) over the end of the previous
fiscal year to 198,838 million yen. This was mainly due to an increasein long-term loans and lease obligations of 46,655 million yen.
Total net assets were 212,126 million yen, up 1,773 million yen(0.8%) over the end of the previous fiscal year. This was mainly due
to a decrease in currency translation adjustments of 3,584 million
yen, a decrease in unfunded retirement benefit obligation of foreignsubsidiaries of 1,454 million yen, an increase in minority interests of
4,791 million yen, and an increase in net unrealized holding gain on
securities of 1,259 million yen.

(Years ended March 31)

Risk Factors

Business results and the financial position of the NTN Group are
subject to the following risks. It should be noted that forward-looking
statements contained in the following reflect judgments of the
NTN Group as of June 27, 2012.
1) Economy
The NTN Group operates global production and sales networks,
and supplies customers in various industrial sectors. Businessresults and the financial position of the NTN Group operations may
be affected by the economic conditions in specific countries andbusiness conditions in industries to which our customers belong.
2) Foreign Exchange Fluctuations
Overseas sales of the NTN Group account for over 50% ofconsolidated sales. This percentage is expected to increase
further due to continued acceleration in the global businessdevelopment of the NTN Group. Overseas subsidiaries’ foreign
currency-denominated business results and financial positions
are converted to yen for the preparation of consolidated financial
statements. Moreover, many export transactions with overseas
customers of the Company are conducted in foreign currencies.
Although the NTN Group hedges risks through forward foreignexchange contracts and expansion of local procurement, effects
of exchange rate fluctuations on business results and financial
positions cannot be fully eliminated.
3) Declines in Market Prices
The competitive environment surrounding production and sales
activities of the NTN Group is becoming harsher worldwide. As
products from China and Eastern Europe are gaining ground, bearings
have been affected by falling market prices. At the same time, against
a backdrop of global price competition, calls for price reductions aremounting 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 high quality andhigh added value, business results and the NTN Group’s financial
position may be affected by downward pressure on market prices.
4) Rise in Raw Materials Prices
The NTN Group procures a wide range of raw materials 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.
5) Disasters and Accidents
Production plants and facilities of the NTN Group and its
transaction counterparts are exposed to the risk of damage fromnatural disasters such as earthquakes, floods, and fires. Although
the NTN Group has put into place crisis management systems
and stands ready to engage in measures to contain damage as
much as possible, risks cannot be completely eliminated.
Business performance and the financial status of the NTN Groupmay be affected by a natural disaster or by accidents.
6) Dependence on Specific Industries
The NTN Group’s Bearings Division derives approximately half of its
sales revenues from the automotive industry, which also accounts

63

for more 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
and implements policies to achieve a balanced sales structure, arapid shift in demand in the automotive industry could potentiallyaffect the NTN Group’s business results and financial position.
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 positionof the NTN Group. Although the NTN Group has taken out global
product liability insurance, complete coverage for loss is not possible.
8) Intellectual Property
The NTN Group generates a wealth of innovative technologies andknow-how in the process of new product development, representing
valuable intellectual property for which the NTN Group files patentapplications to protect its rights. However, business performanceand the 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.
9) Risks Associated with Global Operations
The NTN Group develops its business operations worldwide withoverseas sales exceeding 50% of consolidated sales. Overseas
business development is associated with the following risks:a. Risks from unforeseen change in tax systems of or between
individual countries
b. Risks from unforeseen change in laws of individual countries
c. Difficulty in hiring and retaining appropriate staff
d. Evolving technology levels and unstable labor relations inemerging economies
e. Political instability in emerging economies10) Risk from On-Site Investigation by the Fair Trade Commission
NTN and other companies were suspected of colluding to raise
prices for bearings in the Japanese market and were searched by
the Fair Trade Commission in July 2011. As a result, in April 2012,
the company was investigated by the Tokyo District Public
Prosecutors Office and the Fair Trade Commission. On June 14,
2012, NTN and some of its former executives were charged by the
Fair Trade Commission with violating the Antimonopoly Act andwere indicted by the Tokyo District Public Prosecutors Office. As
well, in November 2011 an NTN consolidated subsidiary in Europe
was searched by the European Commission Competition Authority
on suspicion of violating EU competition laws in its bearings
dealings. That same month, an NTN consolidated subsidiary in the
U.S. received a subpoena from the United States Department ofJustice requesting the submission of information related totransactions in bearings. In Japan, preparations are under way forcourt proceedings, and in Europe and the U.S. investigations
continue. The outcome of these cases may have an effect on thebusiness performance or the financial state of the NTN Group.

Consolidated Balance Sheets
March 31, 2012 and 2011

Thousands of
U.S. dollars(Note 1)Millions of yen

2012

2011

2012

¥ 52,606¥ 40,082$ 640,054

1,755

1,334

21,353

AssetsCurrent assets:
Cash and cash equivalents (Note 11)
Short-term investments (Note 11)
Trade receivables (Note 11):
Notes

10,251

8,227

124,723

Accounts

109,243

101,495

1,329,152

Allowance for doubtful accounts
Inventories (Note 4)
Deferred income taxes (Note 20)

(632)

(648)

(7,689)118,862

109,074

1,446,186

155,107

136,985

1,887,176

4,356

6,132

52,99929,63225,087

360,530

362,318

318,694

4,408,298

Land (Note 2)

31,22530,849379,912

Buildings and structures (Note 2)

155,813

148,459

1,895,766

Machinery, equipment and vehicles (Note 2)

631,410

611,996

7,682,321

Other current assets (Note 11)
Total current assets

Property, plant and equipment, at cost:

31,025

14,536377,479

849,473805,840

10,335,478(583,791)(559,708)(7,102,944)

265,682

246,132

3,232,534

Investment securities (Notes 5 and 11)

24,52027,497298,333

Investments in unconsolidated subsidiaries and affiliates (Note 11)12,516

10,768152,281

279

–

3,395

Deferred income taxes (Note 20)

21,86524,215

266,030

Other assets

6,078

4,695

73,951

65,25867,175

793,990¥ 693,258¥ 632,001$ 8,434,822

Construction in progress
Less accumulated depreciation
Property, plant and equipment, net (Note 22)

Investments and other assets:

Goodwill (Note 23)

Total assets (Note 22)

Consolidated
Financial Statements

Total investments and other assets

See accompanying notes to the consolidated financial statements.

64

Consolidated Balance Sheets
March 31, 2012 and 2011

Thousands of
U.S. dollars(Note 1)Millions of yen

2012

2011

2012

¥ 101,629¥ 95,581$ 1,236,513

14,697

18,839178,817

Notes

15,00012,572

182,504

Accounts

99,216

97,634

1,207,154

114,216

110,206

1,389,658

2,677

3,743

32,571

338

212

4,112

Other current liabilities

48,73741,043592,980

Total current liabilities (Note 22)282,294

269,624

3,434,651

Long-term debt and lease obligations (Notes 6 and 11)

156,784

110,129

1,907,580

Accrued retirement benefits for employees (Note 7)

33,01930,834

401,740

779

846

9,478

Deferred income taxes (Note 20)

3,389

3,871

41,234

Other long-term liabilities

4,867

6,344

59,217

Total long-term liabilities (Note 22)

198,838

152,024

2,419,249

54,34754,347661,236

Liabilities and net assets
Current liabilities:
Short-term bank loans (Notes 6 and 11)
Current portion of long-term debt and lease obligations (Notes 6 and 11)
Trade payables (Note 11):

Accrued income taxes (Notes 11 and 20)
Deferred income taxes (Note 20)

Long-term liabilities:

Reserve for product defect compensation

Net assets:
Shareholders’ equity (Note 8):
Common stock:
Authorized — 1,800,000,000 shares
Issued — 532,463,527 shares in 2012 and 2011
Capital surplus

67,37067,418819,686

Retained earnings (Note 24)

113,595

113,030

1,382,102

Treasury stock, at cost:
566,982 shares in 2012 and 824,400 shares in 2011
Total shareholders’ equity

(514)

(758)

(6,254)

234,798

234,037

2,856,770

Accumulated other comprehensive income (loss):
3,396

2,137

41,319Translation adjustments(37,263)(33,679)(453,376)

Unfunded retirement benefit obligation of foreign subsidiaries(4,027)(2,573)(48,996)(37,894)(34,115)(461,053)

Net unrealized holding gain on securities (Note 5)

Total accumulated other comprehensive loss, net
Minority interests
Total net assets
Total liabilities and net assets
See accompanying notes to the consolidated financial statements.

65

15,222

10,431

185,205

212,126

210,353

2,580,922¥ 693,258¥ 632,001$ 8,434,822

Consolidated Statements of Income
Years ended March 31, 2012 and 2011

Thousands of
U.S. dollars(Note 1)Millions of yen

Net sales (Note 22)
Cost of sales (Note 13)
Gross profit
Selling, general and administrative expenses (Note 13)
Operating income (Note 22)
Other income (expenses):
Interest and dividend income
Interest expense
Equity in earnings of affiliates
Gain on sales of fixed assets (Note 14)
Loss on valuation of investment securities (Note 5)
Loss on earthquake (Note 15)
Reorganization expenses (Note 16)
Loss on sales of fixed assets
Gain on sales of investment securities (Note 5)
Gain on recognition of negative goodwill (Note 22)Compensation income
Gain on allocation of shares (Note 17)
Loss resulting from low capacity utilization (Note 18)
Provision of reserve for product defect compensation
Other, net (Note 23)
Income before income taxes and minority interests
Income taxes (Note 20):
Current
DeferredIncome before minority interests
Minority interests
Net income

2012

2011

2012

¥ 543,468
452,975
90,493¥ 530,056
437,515
92,541$ 6,612,337
5,511,315
1,101,022

69,76920,724

67,981
24,560848,875
252,147881(3,369)1,010
1,202(2,105)
(744)
(580)
(107)
–
–
–
–
–
–
(555)
(4,367)
16,357661(3,243)
507
–
(146)
(538)
–
–
1,512
1,286
559
298
(812)
(401)
(1,388)(1,705)22,855

10,719(40,990)
12,28914,624(25,611)(9,052)(7,057)(1,302)––––––(6,753)(53,133)
199,014

5,527
3,806
9,333
7,024
(1,031)¥ 5,993

7,624
(758)
6,866
15,989(1,590)¥ 14,399

67,24646,307
113,553
85,461(12,545)$ 72,916

See accompanying notes to the consolidated financial statements.

Consolidated Statements of Comprehensive Income
Years ended March 31, 2012 and 2011

Income before minority interests
Other comprehensive income (loss) (Note 19):
Net unrealized holding gain (loss) on securities (Note 5)
Unrealized gain on hedging instruments
Translation adjustments
Unfunded retirement benefit obligation of foreign subsidiaries
Share of other comprehensive loss of affiliates accounted for by the equity method
Other comprehensive loss, net
Comprehensive income
Total comprehensive income attributable to:Shareholders of NTN Corporation
Minority interests

2012

2011

2012

¥ 7,024¥ 15,989$ 85,461

1,259–(3,075)(1,454)(779)(4,049)¥ 2,975(1,492)
66(7,393)63(395)(9,151)¥ 6,838

15,318–(37,413)(17,690)(9,479)(49,264)$ 36,197¥ 2,215¥ 760¥ 5,777¥ 1,061$ 26,950$ 9,247

Consolidated
Financial Statements

Thousands of
U.S. dollars(Note 1)Millions of yen

See accompanying notes to the consolidated financial statements.

66

Consolidated Statements of Changes in Net Assets
Years ended March 31, 2012 and 2011

Millions of yen

Retainedearnings

Treasurystock,
at cost532,463,527 ¥ 54,347 ¥ 67,418 ¥ 100,247¥ (737)¥ 3,629¥ (66)¥ (25,886)¥–

Number ofshares in
issue

Balance at April 1, 2010

Unfundedretirement
Unrealized
benefitloss onobligation
hedging Translation of foreign
instruments adjustments subsidiaries

Net
unrealized
holding
gain onsecurities

Commonstock

CapitalsurplusMinority
interests

Total net
assets¥ 15,599 ¥ 214,551

Effect of application of accounting
standard for presentation ofcomprehensive income

–

–

–

3,169

–

–

–

(533)

(2,636)––

Cash dividends paid

–

–

–

(4,785)

–

–

–

–

–

–

(4,785)

Net income

–

–

–

14,399

–

–

–

–

–

–

14,399Purchases of treasury stock

–

–

–

–

(22)

–

–

–

–

–

(22)

Sales of treasury stock

–

–

–

–

1

–

–

–

–

–

1

Other changes

–

–

–

–

–

(1,492)

66(7,260)63(5,168)(13,791)

532,463,527

54,34767,418113,030

(758)

2,137

–

(33,679)(2,573)

10,431

210,353

Cash dividends paid

–

–

–

(5,316)

–

–

–

–

–

–

(5,316)

Net income

–

–

–

5,993

–

–

–

–

–

–

5,993

Balance at April 1, 2011

Net effect of change in scopeof consolidation

–

–

–

5

–

–

–

–

–

–

5

Purchases of treasury stock

–

–

–

–

(9)

–

–

–

–

–

(9)

Sales of treasury stock

–

–

(165)

–

253

–

–

–

–

–

88

treasury stock

–

–

117

(117)

–

–

–

–

–

–

–

Other changes

–

–

–

–

–

1,259

–

(3,584)(1,454)

4,791

1,012

532,463,527 ¥ 54,347 ¥ 67,370 ¥ 113,595¥ (514)¥ 3,396¥–¥ (37,263)¥ (4,027)

Transfer of loss on sales ofBalance at March 31, 2012

¥ 15,222 ¥ 212,126

Thousands of U.S. dollars (Note 1)

Commonstock

Balance at April 1, 2011

CapitalsurplusTreasurystock,
at costRetainedearnings

Unfundedretirement
Net
benefitunrealized Unrealized
loss onobligation
holding
hedging Translation of foreign
gain onMinority
securities instruments adjustments subsidiaries interests$ 661,236 $ 820,270 $ 1,375,228 $ (9,222) $ 26,001$–

Total net
assets$ (409,770) $ (31,306) $ 126,913 $ 2,559,350

Cash dividends paid––

(64,679)

–

–

–

–

–

–

(64,679)

Net income––

72,916

–

–

–

–

–

–

72,916Net effect of change in scope of consolidation

–

–

61

–

–

–

–

–

–

61

Purchases of treasury stock

–

–

–

(110)

–

–

–

–

–

(110)

Sales of treasury stock–(2,008)

–

3,078

–

–

–

–

–

1,070

Transfer of loss on sales of treasury stock

–

1,424

(1,424)

–

–

–

–

–

–

–

Other changes

–

–

–

–

15,318–(43,606)(17,690)

58,292

12,314$ 661,236 $ 819,686 $ 1,382,102 $ (6,254) $ 41,319$–

Balance at March 31, 2012

See accompanying notes to the consolidated financial statements.

67$ (453,376) $ (48,996) $ 185,205 $ 2,580,922

Consolidated Statements of Cash Flows
Years ended March 31, 2012 and 2011

Thousands of
U.S. dollars(Note 1)Millions of yen

Cash flows from operating activities:
Income before income taxes and minority interests
Adjustments for:
Depreciation and amortization
Gain on recognition of negative goodwill
Increase in allowance for doubtful accounts(Decrease) increase in allowance for directors’ and corporate auditors’ bonuses
Increase in accrued retirement benefits for employees
Decrease in reserve for product defect compensation
Decrease in other current and long-term liabilities resulting from amendment ofpension plans
Interest and dividend income
Interest expense
Translation adjustments and foreign exchange loss, net
Equity in earnings of affiliates
Gain on sales of fixed assets, net
Loss on valuation of investment securities
Increase in trade receivables
Increase in inventories
Increase in trade payables
Other
SubtotalInterest and dividend income received
Interest paid
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities:(Increase) decrease in short-term investments
Purchases of property, plant and equipment
Purchases of other assets
Proceeds from sales of property, plant and equipment
Purchases of investment securities
Proceeds from sales of investment securities
Purchases of investments in subsidiaries
Proceeds from liquidation of a subsidiary
Purchases of investments in an affiliate
Other
Net cash used in investing activities

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

2011

2012

¥ 16,357¥ 22,855$ 199,014

34,175
–
46
(92)
894
(89)

35,936(1,286)
314
170
1,244
(491)

415,805–560(1,119)10,877(1,083)(1,395)
(881)
3,369
543
(1,010)(1,095)
2,105(11,754)(20,216)
4,891
1,113
26,961
1,850(3,355)(8,404)¥ 17,052(1,583)
(661)
3,243
112
(507)
–
146
(13,639)(15,817)
21,051
1,991
53,078932(3,198)(6,309)¥ 44,503(16,973)(10,719)
40,990
6,607(12,289)(13,323)
25,611(143,010)(245,966)
59,50913,542
328,033
22,509(40,820)(102,251)$ 207,471¥ (422)(49,102)(1,094)
1,559
(0)
28
(496)
113
(2,300)(1,129)(52,843)¥ 358(27,568)
(527)
25
(158)
1,564
(5,908)–(30)
57(32,187)$ (5,134)(597,421)(13,311)
18,968(0)341(6,035)
1,375(27,984)(13,736)(642,937)

7,084
68,043(25,523)(10,699)
35,187(26,225)

86,191
827,874(310,537)

3,537(5,316)(192)(384)
47,249204(4,785)(189)(189)(6,696)43,034(64,679)(2,336)(4,672)574,875959
12,41740,082

1,703
7,323
32,75911,668151,077
487,675107¥ 52,606–¥ 40,082

1,302$ 640,054

Consolidated
Financial Statements

Cash flows from financing activities:
Increase (decrease) in short-term bank loans, net
Proceeds from long-term debt
Repayment of long-term debt, including current portion
Proceeds from issuance of common stock assigned to minority shareholders ofa consolidated subsidiaries
Cash dividends paid
Repayment of lease obligations
Other
Net cash provided by (used in) financing activities

2012

See accompanying notes to the consolidated financial statements.

68Notes to Consolidated Financial Statements
March 31, 2012

1. Basis of Preparation(g) Property, plant and equipment

The accompanying consolidated financial statements of NTN Corporation(the “Company”) and consolidated subsidiaries are prepared on the basisof accounting principles generally accepted in Japan, which are different incertain respects as to the application and disclosure requirements ofInternational Financial Reporting Standards, and are compiled from theconsolidated financial statements prepared by the Company as
required by the Financial Instruments and Exchange Act of Japan.

Property, plant and equipment are stated at cost. Depreciation iscomputed at rates based on the estimated useful lives of therespective assets by the declining-balance method, except for thebuildings and assets of foreign consolidated subsidiaries to which thestraight-line method is principally applied.

In preparing the accompanying consolidated financial statements,
certain reclassifications have been made to the consolidated financial
statements issued domestically in order to present them in a format
which is more familiar to readers outside Japan. In addition, certain
notes included herein are not required under accounting principles
generally accepted in Japan but are presented as additional information.
The translation of yen amounts into U.S. dollar amounts is included
solely for the convenience of readers outside Japan and has been madeat ¥82.19 = U.S.$1.00, the exchange rate prevailing on March 31, 2012.
This translation should not be construed as a representation that yen
can be converted into U.S. dollars at the above or any other rate.

2. Summary of Significant Accounting Policies(a) Principles of consolidation
The accompanying consolidated financial statements include the accountsof 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 includedin the accompanying consolidated financial statements on an equity basis.

The principal estimated useful lives are as follows:
Buildings and structures
Machinery, equipment and vehicles

10 to 50 years
5 to 12 years

Contributions granted by national and municipal governments are
deducted directly from the acquisition costs of the related fixed assets
as stipulated in the Corporation Tax Law of Japan. The property,
plant and equipment accounts on the consolidated balance sheets at
March 31, 2012 and 2011 were reduced by the following amounts:
Thousands of
U.S. dollars

Millions of yen

Land
Buildings andstructures
Machinery,equipment
and vehicles

2012
¥ 799

2011
¥ 721

2012
$ 9,721

512

524

6,229

604

730

7,349

(h) Accrued retirement benefits for employees(b) Foreign currency translation

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

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.

Prior service cost is amortized in the year in which the gain or loss isrecognized primarily by the straight-line method over a period of
principally 15 years, which is within the estimated average remaining
years of service of the eligible employees.

Assets and liabilities of overseas consolidated subsidiaries are translated
into yen at the exchange rates in effect at the respective balance 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 therespective years. Differences arising from translation are reflected in“Translation adjustments” and “Minority interests” in the accompanying
consolidated balance sheets and statements of changes in net assets.

Net unrecognized actuarial gain or loss is amortized commencing theyear following the year in which the gain or loss was recognizedprimarily by the straight-line method over a period of principally 15
years, which is within the estimated average remaining years ofservice of the eligible employees.

The financial statements of certain consolidated subsidiaries whose fiscal
year end is December 31 have been included in consolidation on thebasis of a full fiscal year closing on March 31 for consolidation purposes.

(c) Cash and cash equivalents(i) Reserve for product defect compensation
Reserve for product defect compensation is provided at an
estimated amount in order to cover the anticipated compensation.

Cash and cash equivalents consist of cash on hand, deposits with banks
withdrawable on demand, and short-term investments which are readily
convertible to cash subject to an insignificant risk of any change in their value
and which were purchased with an original maturity of three months or less.

(j) Leases(d) Allowance for doubtful accounts

For lease transactions not involving the transfer of ownership, leased
assets are depreciated over the lease period using the straight-line
method with a nil residual value.

The 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.

(e) Short-term investments and investment securities
The accounting standard for financial instruments requires that securities
be classified into three categories: trading, held-to-maturity or othersecurities. Trading securities are carried at fair value and held-to-maturity
debt securities are carried at amortized cost. Marketable securities
classified as other securities are carried at fair value with any changes in
unrealized holding gain or loss, net of the applicable income taxes,
included directly in net assets. Cost of securities sold is determined by
the moving average method. Non-marketable securities classified asother 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.

69

For lease transactions involving the transfer of ownership, theleased assets are depreciated by the same methods used forowned fixed assets.

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

(k) Goodwill
Goodwill is being amortized on the straight-line method over theestimated period of the economic benefits, with the exception of
immaterial amounts, which are charged to income as incurred.

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

3. Additional information(m) Deferred income taxes

Effective April 1, 2011, the Company and its domestic consolidated
subsidiaries adopted “Accounting Standard for Accounting Changes
and Error Corrections” (Accounting Standards Board of Japan(“ASBJ”) Statement No.24 issued on December 4, 2009) and the“Guidance on Accounting Standard for Accounting Changes and Error
Corrections” (ASBJ Guidance No.24 issued on December 4, 2009).

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.

(n) 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
is accounted for as if the interest rates applied to the interest-rate
swap had originally applied to the underlying debt.

(a) Accounting standard for accounting changes and error corrections(b) Consolidated taxation system
Effective April 1, 2011, the Company and certain domestic consolidated
subsidiaries adopted the consolidated taxation system, which allows
companies to file tax returns based on the combined profits or lossesof the parent company and its wholly owned domestic subsidiaries.

4. Inventories
Inventories at March 31, 2012 and 2011 consisted of the following:(o) Distribution of retained earnings

Thousands of
U.S. dollars

Millions of yen

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 24.(b))

Finished goods
Work in process
Raw materials
and supplies2012¥ 85,083
42,6822011¥ 73,762
39,0632012$ 1,035,199
519,30927,342¥ 155,107

24,160¥ 136,985

332,668$ 1,887,176

5. Securities(a) Information regarding marketable securities classified as other securities at March 31, 2012 and 2011 is summarized as follows:
Millions of yen

2012

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

2011

Carrying
value

Acquisition
costs

Unrealized
gain (loss)

Carrying
value

Acquisition
costs

Unrealized
gain (loss)¥ 13,921
13,921¥ 7,278
7,278¥ 6,643
6,643¥ 17,774
17,774¥ 11,377
11,377¥ 6,397
6,397

9,239
10,00019,239¥ 33,160

10,657
10,00020,657¥ 27,935(1,418)–(1,418)¥ 5,225

5,628
3,000
8,628
¥ 26,402

8,464
3,000
11,464¥ 22,841(2,836)–(2,836)¥ 3,561

Thousands of U.S. dollars

2012
Acquisition
costs

Unrealized
gain (loss)$ 169,376
169,376$ 88,551
88,551$ 80,825
80,825

112,410
121,669
234,079$ 403,455

129,663
121,669
251,332$ 339,883(17,253)–(17,253)$ 63,572

Consolidated
Financial Statements

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

Carrying
value

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 impairment losses on valuation of investment securities of ¥1,886 million ($22,947 thousand) and ¥146 million forthe years ended March 31, 2012 and 2011, respectively.

70

Notes to Consolidated Financial Statements
March 31, 2012(b) Sales and aggregate gain on investment securities for the year ended March 31, 2011 are summarized as follows:
Millions of yen

2011¥ 1,610
1,512

Sales
Aggregate gain

6. Short-Term Bank Loans, Long-Term Debt and Lease Obligations
Short-term bank loans principally represent short-term notes with average annual interest rates of 0.83% and 0.87% at March 31, 2012 and 2011,
respectively.
Long-term debt and lease obligations at March 31, 2012 and 2011 consisted of the following:Thousands of
U.S. dollars

Millions of yen

Loans from banks and other financial institutions, due through 2021, at an averageannual interest rate of 1.5%
1.66% unsecured bonds due 2013
Lease obligations due through 2018
Less current portion

2012

2011

2012

¥ 160,349
10,0001,132
171,481(14,697)¥ 156,784¥ 117,703
10,0001,265
128,968(18,839)¥ 110,129$ 1,950,955
121,669
13,7732,086,397(178,817)$ 1,907,580

The aggregate annual maturities of long-term debt and lease obligations subsequent to March 31, 2012 are summarized as follows:Year ending March 31,

Millions of yen

Thousands of
U.S. dollars

2013
2014
2015
2016
2017
2018 and thereafter¥ 14,697
60,814
18,72020,58144,33812,331¥ 171,481$ 178,817
739,920
227,765
250,408
539,457
150,030$ 2,086,397

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 lump-sum
payment plans, covering substantially all employees who are entitled to lump-sum or annuity payments, the amounts of which are determined by reference
to their basic rates of pay, length of service, and the conditions under which termination occurs. They also have defined contribution pension plans andadvance payment plan. Certain overseas consolidated subsidiaries also have defined benefit pension plans and/or defined contribution pension plans.
The following table sets forth the funded and accrued status and the amounts recognized in the accompanying consolidated balance sheets at
March 31, 2012 and 2011 for the Company’s and consolidated subsidiaries’ defined benefit pension plans: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 costAccrued retirement benefits for employees

2012¥ (97,423)
52,132(45,291)
12,415(111)(32,987)32¥ (33,019)

2011¥ (97,109)
52,451(44,658)
14,587(701)(30,772)62¥ (30,834)

Thousands of
U.S. dollars

2012$ (1,185,339)
634,287(551,052)
151,052(1,351)(401,351)
389$ (401,740)

The components of retirement benefit expenses for the years ended March 31, 2012 and 2011 are outlined as follows:
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

Thousands of
U.S. dollars

2012¥ 2,789
2,810(1,487)2011¥ 2,909
2,808(1,518)2012$ 33,933
34,189(18,092)

1,977
(163)
5,926
1,157
¥ 7,083

1,737
(184)
5,752
1,136
¥ 6,888

24,054(1,983)
72,101
14,077$ 86,178

The assumptions used in accounting for the defined benefit pension plans for the years ended March 31, 2012 and 2011 are a discount rate
principally of 2.6% and an expected rate of return on plan assets principally of 2.5%.

71

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 ($105,110 thousand) at March 31, 2012 and 2011.
(b) Movements in shares issued and treasury stock during the years ended March 31, 2012 and 2011 are summarized as follows:
Number of shares

2012
Shares issued: Common stock
Treasury stock: Common stock

April 1, 2011

Increase

Decrease

March 31, 2012

532,463,527
824,400–
23,299–280,717532,463,527
566,982

April 1, 2010

Increase

Decrease

March 31, 2011

532,463,527
773,007–54,860–3,467

532,463,527
824,400

2011
Shares issued: Common stock
Treasury stock: Common stock

The increases of treasury stock were due to purchases of shares of less than one voting unit for the years ended March 31, 2012 and 2011. The
decreases of treasury stock were due to the exchange of 274,597 shares as part of the acquisition of Nippon Kagaku Yakin Co., Ltd. and sales of
6,120 shares at requests of shareholders owning less than one voting unit for the year ended March 31, 2012. The decreases of treasury stock
were due to sales of shares at requests of shareholders owning less than one voting unit for the year ended March 31, 2011.

9. Finance Lease Transactions That Do Not Transfer Ownership
Lessees’ accounting

The following pro forma amounts represent the acquisition costs, accumulated depreciation and net book value of property leased to the Company
and its consolidated subsidiaries at March 31, 2012 and 2011, 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

2012

Buildings and structures
Machinery, equipment and vehicles
Other assets

2011

Acquisition
costs

Accumulated
depreciation

Net bookvalue

Acquisition
costs

Accumulated
depreciation

Net bookvalue¥ 1,41152
37¥ 1,500¥ 1,082
4630¥ 1,158

¥ 329
6
7
¥ 342

¥ 1,419139
8¥ 1,566¥ 1,033
103
7¥ 1,143

¥ 386
36
1
¥ 423

Thousands of U.S. dollars

2012

Buildings and structures
Machinery, equipment and vehicles
Other assets

Acquisition
costs

Accumulated
depreciation

Net bookvalue$ 17,167
633
450$ 18,250$ 13,164560
365$ 14,089$ 4,00373
85$ 4,161

Future minimum lease payments subsequent to March 31, 2012 for finance leases accounted for as operating leases are summarized as follows:Year ending March 31,

Millions of yen

Thousands of
U.S. dollars

20132014 and thereafter
Total

¥ 65
277
¥ 342

$ 791
3,370
$ 4,161

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, 2012 and 2011.

72

Consolidated
Financial Statements

Lease payments relating to finance leases accounted for as operating leases in the accompanying consolidated financial statements amounted to¥80 million ($973 thousand) and ¥144 million for the years ended March 31, 2012 and 2011, respectively. Depreciation of the leased assets
computed by the straight-line method over the respective lease terms with a nil residual value amounted to ¥80 million ($973 thousand) and ¥144
million for the years ended March 31, 2012 and 2011, respectively.

Notes to Consolidated Financial Statements
March 31, 2012

10. Operating Leases
Future minimum lease payments subsequent to March 31, 2012 for non-cancelable operating leases were as follows:Year ending March 31,

Millions of yen

Thousands of
U.S. dollars

20132014 and thereafter
Total

¥ 348
2,613
¥ 2,961$ 4,234
31,792$ 36,026

11. Financial Instruments – Fair Value
Overview(a) Policy for financial instruments
The Company and its subsidiaries (collectively, the “Group”) raisenecessary funds in accordance with management plans mainly bybank borrowings and corporate bonds in support of operations
related to the manufacture and sales of bearings, constant-velocity
joints (CVJs) and precision equipments. The Group utilizes bankborrowings for short-term operating funds, and bank borrowingsand corporate bonds for long-term capital investments andfinances. 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 tocredit risk of customers. In addition, as a result of the business of theGroup, which operates globally, foreign currency trade receivables
are exposed to currency rate fluctuation risk, which is mitigated byutilizing forward foreign currency exchange contracts. Securities aremainly composed of stocks of the companies with which the Grouphas business relationships and they are exposed to fluctuation risk ofmarket prices.
Trade payables, notes and accounts payable, are due within one
year. Certain trade payables resulting from the import of raw
materials are denominated in foreign currencies. These are exposed
to fluctuation risk of foreign currencies. However, the risk is mitigatedbecause the trade payables, notes and accounts payable
denominated in foreign currencies are within the range of accounts
receivable denominated in the same currencies.

approved by the Company. The Group believes credit risk ofderivative transactions is almost nil because counterparties arefinancial institutions with high credit ratings.
(ii) Monitoring of market risks (the risks arising from fluctuations inforeign currency exchange rates, interest rates and others)
The Group mainly utilizes forward foreign currency exchange
contracts for hedging of fluctuation risk which is identified by eachcurrency. Depending on the market conditions of foreign currencies,
the Group utilizes forward foreign currency exchange contracts forforecasted export transactions with a maximum period of 6 months.
The Group utilizes interest rate swap agreements to mitigate
fluctuation risk of interest rates.
The Group continuously reviews securities holdings by monitoring
periodically the market value and financial condition of securities’issuers (companies with business relationships with the Group) andby evaluating those relationships.
The Group has established policies which include maximum upper
limits and reporting obligations for derivative transactions andcomply fully with these guidelines. Derivative transactions areentered into by the Company’s Accounting Department and certain
consolidated subsidiaries. The Company carries out mutual
supervision and monitoring of the derivative transactions inaccordance with management policies and its consolidated
subsidiaries apply the same approach. Each derivative transactionof the Company is reported to the responsible director when enteredinto. The consolidated subsidiaries are required to report the statusof their derivatives transactions 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.

Loans and corporate bonds are mainly utilized for business
operations of the Group. Short-term loans are mainly utilized forfinancing of operating activities. Long-term loans and corporate
bonds are mainly utilized for capital investments and financing. These
have maturity dates of less than 10 years, at the longest, subsequent
to March 31, 2012. Certain loans are exposed to fluctuation risk ofinterest rates due to floating rates and this risk is hedged by interest
rate swap agreements.

(iii) Monitoring of liquidity risk (the risk that the Group may not be able
to meet its obligations on scheduled due dates)
The Group manages liquidity risk with the responsible section
preparing and updating cash flow plans and keeping necessary
funds based on reports of each section.

The Group has a policy to utilize derivative transactions involving
forward foreign currency exchange contracts, currency option
agreements, currency swap agreements, interest swap agreements
and interest option agreements for the purpose of avoiding futurefluctuation risk of foreign currencies trade receivables and payables
and mitigating future fluctuation risk of interest rate of loans andcorporate bonds. The Group utilized forward foreign currency
exchange contracts and interest rate swap agreements for the year
ended March 31, 2012. Refer to “(n) Derivative financial instruments
and hedging activities” in Note 2. “Summary of Significant
Accounting Policies.”(iv) Supplementary explanation of the fair value of financial instruments
The fair value of financial instruments is based on their quoted market
price, if available. When there is no quoted market price available, fairvalue is reasonably estimated. Since various assumptions and factors
are reflected in estimating the fair value, different assumptions andfactors could result in different fair value. In addition, the notionalamounts of derivatives in Note 12 “Derivative Financial Instruments
and Hedging Activities’’ are not necessarily indicative of the actual
market risk involved in the derivative transactions.

(c) Risk management for financial instruments

The carrying value of financial instruments on the consolidatedbalance sheets, fair value and the difference as of March 31, 2012
and 2011, are shown in the following table. The table does notinclude financial instruments for which it is extremely difficult todetermine the fair value. (Please refer to Note 2 below).

(i) Monitoring of credit risk (the risk that customers or counterparties
may default)
In accordance with internal rules and manual, the credit management
section periodically monitors financial conditions of major customers,
manages collection due dates and balances of each customer andtries to identify credit risk of customers with worsening financial
conditions at the early stage and mitigate the risk. Credit risk of
securities is quite low because the Group utilizes certificate ofdeposits with high credit ratings, up to a limited amount, which is

73

Syndicated loans have certain financial covenants that represent aliquidity risk from an early repayment request by financial institutions.

Fair Value of Financial Instruments

Millions of yen

2012
(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
Derivative transactions (*)

2011
Difference

Carrying value

Fair value¥ 52,606
1,755
119,494
23,160¥–––0¥ 40,082
1,334
109,722
23,402¥ 40,082
1,334
109,722
23,406

¥–
–
–
4

1,332
¥ 198,347
114,216
101,629
14,502
2,677
157,168¥ 390,192¥ (814)

–
¥0
–
–
–
–
1,321
¥ 1,321¥–305¥ 174,845
110,206
95,581
18,656
3,743
109,048¥ 337,234¥ (270)305¥ 174,849
110,206
95,581
18,656
3,743
110,065¥ 338,251¥ (270)

–
¥4
–
–
–
–
1,017
¥ 1,017¥–

Carrying value

Fair value¥ 52,606
1,755
119,494
23,1601,332¥ 198,347
114,216
101,629
14,502
2,677
155,847¥ 388,871¥ (814)

Difference

Thousands of U.S. dollars

2012
(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
Derivative transactions (*)

Carrying value

Fair value$ 640,054
21,353
1,453,875
281,786$ 640,054
21,353
1,453,875
281,786

Difference

$–
–
–
0

16,206$ 2,413,274
1,389,658
1,236,513
176,445
32,571
1,896,180$ 4,731,367$ (9,904)

16,206$ 2,413,274
1,389,658
1,236,513
176,445
32,571
1,912,252$ 4,747,439$ (9,904)

–
$0
–
–
–
–
16,072$ 16,072$–* Assets and liabilities arising from derivative transactions are shown at net value with the amount in parentheses representing net liability position.
Note 1: Methods to determine the fair value of financial instruments and other matters related to securities and derivative transactions(1) Cash and cash equivalents, (2) Short-term investments, (3) Trade receivables and (5) Short-term loans receivable included in othercurrent assets
Since these items are settled in a short time period, their carrying value approximates fair value.
(4) Investment securities
The fair value of equity securities is based on quoted market prices.
(6) Trade payables, (7) Short-term bank loans and (9) Accrued income taxes
Since these items are settled in a short time period, their carrying value approximates fair value.
(8) Current portion of long-term debt and (10) Long-term debt
Long-term debt is composed of corporate bonds and long-term loans. The fair market value of corporate bonds is based on quoted
market prices. The fair value of long-term debt is based on the present value of the total of principal and interest discounted by the interest
rate to be applied assuming new loans under the similar conditions to existing loans are made.

Derivative Transactions
Please refer to Note 12 “Derivative Financial Instruments and Hedging Activities” section of these Notes to Consolidated Financial Statements.
Note 2: Financial instruments for which it is extremely difficult to determine the fair value were as follows:
Thousands of
U.S. dollars

Millions of yen

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

2012

2011

2012

¥ 12,516
360
–
1,000
¥ 13,876¥ 10,768
579
2,516
1,000
¥ 14,863$ 152,281
4,380–
12,167$ 168,828

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.

74

Consolidated
Financial Statements

Certain long-term loans with floating interest rates were hedged by interest rate swap agreements and accounted for as loans with fixedinterest rates. The fair value of those long-term loans is based on the present value of the total of principals, interest payments and net
cash flows of the swap agreements discounted by the interest rates to be applied assuming new loans under similar conditions are made.

Notes to Consolidated Financial Statements
March 31, 2012

Note 3: Redemption schedule for cash and cash equivalents, receivables and marketable securities with maturities at March 31, 2012 and 2011 is
as follows:
Millions of yen

2012

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

Withinone yearMore than one year
and within five years

More than five years
and within ten years

More thanten years¥ 52,606
1,755
119,494
1,332¥ 175,187

¥–
–
–
–
¥–

¥–
–
–
–
¥–

¥–
–
–
–
¥–

Millions of yen

2011

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

Withinone yearMore than one year
and within five years

More than five years
and within ten years

More thanten years¥ 40,082
1,334
109,722305¥ 151,443

¥–
–
–
–
¥–

¥–
–
–
–
¥–

¥–
–
–
–
¥–

Thousands of U.S. dollars

2012

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

Withinone yearMore than one year
and within five years

More than five years
and within ten years

More thanten years$ 640,054
21,353
1,453,875
16,206$ 2,131,488

$–
–
–
–
$–

$–
–
–
–
$–

$–
–
–
–
$–

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

12. 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, 2012 and 2011 issummarized as follows:

Currency-related transactions

Millions of yen

2012Classification

Over-the-counter transactions

75

Transaction

Notional amount

Fair value

Valuation loss

Forward foreign currency exchange contracts
Selling:
U.S. Dollars
Euro
Thai Baht
Canadian Dollars
British Pounds¥ 14,358
6,022
1,131
316
122

¥ (472)
(210)
(68)
(16)
(10)

¥ (472)
(210)
(68)
(16)
(10)

Buying:
Yen
Total

1,091
¥ 23,040(38)¥ (814)(38)¥ (814)

Millions of yen

2011
Notional amount

Fair value

Valuation gain (loss)

Forward foreign currency exchange contracts
Selling:
Euro
U.S. Dollars
Thai Baht
Canadian Dollars
British Pounds¥ 6,795
4,734
1,513
311
153

¥ (240)
(5)
(19)
(6)
0

¥ (240)
(5)
(19)
(6)
0

Buying:Yen
U.S. Dollars
Total

867
750
¥ 15,123(6)
6¥ (270)(6)
6¥ (270)Classification

Over-the-counter transactions

Transaction

Thousands of U.S. dollars

2012
Notional amount

Fair value

Valuation loss

Forward foreign currency exchange contracts
Selling:
U.S. Dollars
Euro
Thai Baht
Canadian Dollars
British Pounds$ 174,693
73,26913,761
3,845
1,484$ (5,743)(2,555)
(827)
(195)
(122)

$ (5,743)(2,555)
(827)
(195)
(122)

Buying:Yen
Total

13,274$ 280,326(462)$ (9,904)(462)$ (9,904)

Classification

Over-the-counter transactions

Transaction

The fair value of forward foreign currency exchange contracts are computed using prices provided by counterparty financial institutions. There areno contracts to be settled after one year.

(b) Derivative transactions to which hedge accounting is applied
The estimated fair value of the derivatives positions outstanding which qualify for deferral hedge accounting at March 31, 2012 is summarized asfollows.

Interest-rate related transactions
Millions of yen

2012
Method of hedge accounting

Swap rates applied to underlying long-term debt

Transaction

Interest rate swaps
Receive / floating and pay / fixed
Total

Contractual value
Notional amountMore than one year

¥ 32,500¥ 32,500¥ 32,500¥ 32,500

Fair value

(*)
(*)

Millions of yen

2011
Method of hedge accounting

Transaction

Interest rate swaps
Receive / floating and pay / fixed
Total¥ 30,000¥ 30,000¥ 28,000¥ 28,000Fair value
Consolidated
Financial Statements

Swap rates applied to underlying long-term debt

Contractual value
Notional amountMore than one year

(*)
(*)

Thousands of U.S. dollars

2012
Method of hedge accounting

Swap rates applied to underlying long-term debt

Transaction

Interest rate swaps
Receive / floating and pay / fixed
Total

Contractual value
Notional amountMore than one year

$ 395,425$ 395,425$ 395,425$ 395,425

Fair value

(*)
(*)

* Because interest rate swap agreements are accounted for applying swap rates to underlying long-term debt, their fair value is included in that oflong-term debt disclosed in Note 11.

13. Research and Development Costs
Research and development costs included in cost of sales and selling, general and administrative expenses totalled ¥17,157 million ($208,748
thousand) and ¥15,697 million for the years ended March 31, 2012 and 2011, respectively.

76

Notes to Consolidated Financial Statements
March 31, 2012

14. Gain on Sales of Fixed Assets
Gain on sales of fixed assets for the year ended March 31, 2012 consisted of the following:

Gain on sales of dormitory and company housing at TAKARAZUKA Works
OthersMillions of yen

Thousands of
U.S. dollars

2012¥ 1,098104¥ 1,2022012$ 13,359
1,265$ 14,624

15. Loss on Earthquake
During the years ended March 31, 2012 and 2011, the Company and its domestic subsidiaries suffered losses related to the Great East Japan
Earthquake on March 11, 2011.
Loss on earthquake for the years ended March 31, 2012 and 2011 consisted of the following:Thousands of
U.S. dollars

Millions of yen

Fixed costs incurred for suspended operations
Donation
Others

2012
¥ 726
–
18
¥ 744

2011
¥ 418
100
20
¥ 538

2012
$ 8,833–219$ 9,052

16. Reorganization Expenses
The Company recorded expenses relating to the closure of the TAKARAZUKA Works when the Company ceased operations there in the year
ended March 31, 2009. For the year ended March 31, 2012, the Company recorded related reorganization expenses of ¥580 million ($7,057
thousand) because additional construction work was required. Although the Company had planned to sell the site after soil improvement work, no
gain or loss on this land for the years ended March 31, 2012 and 2011 was recognized because the Company could not estimate it reasonably.

17. Gain on Allocation of Shares
The Company received an allocation of shares issued by Dai-ichi Life Insurance Company, Limited in exchange for its management participantrights in a mutual insurance company subsequent to Dai-ichi’s demutualization. As a result, the Company recorded a gain on allocation of sharesof ¥298 million for the year ended March 31, 2011.

18. Loss Resulting from Low Capacity Utilization
The Company recorded a loss resulting from low capacity utilization of ¥812 million for the year ended March 31, 2011. The consolidated
subsidiaries experienced abnormally lower capacity utilization and recorded related loss.

19. Other Comprehensive Income
The following table presents the analysis of other comprehensive income (loss) for the year ended March 31, 2012.

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

77

Millions of yen

Thousands of
U.S. dollars

2012

2012

¥ (215)
1,878
1,663
(404)
1,259

$ (2,616)
22,84920,233(4,915)
15,318(3,075)(37,413)(2,913)368(2,545)
1,091(1,454)(35,442)4,477(30,965)
13,275(17,690)(779)¥ (4,049)(9,479)$ (49,264)

20. Income Taxes
Income taxes applicable to the Company and its domestic subsidiaries comprise corporate tax, inhabitants’ taxes and enterprise tax which, in theaggregate, resulted in a statutory tax rate of 40.0% for the years ended March 31, 2012 and 2011. Overseas subsidiaries are subject to theincome taxes of the respective countries in which they operate.
The effective tax rates for the years ended March 31, 2012 and 2011 differ from the Company’s statutory tax rate for the following reasons:
2012
40.0%
0.7
(4.1)
8.0
(2.5)
(7.0)
4.4
14.4
–
3.2
57.1%

Statutory tax rate
Permanent non-deductible expenses
Permanent non-taxable income
Elimination of dividend income
Equity in earnings of affiliates
Difference in overseas consolidated subsidiaries’ applicable tax rate
Increase (decrease) in valuation allowance
Decrease in deferred tax assets due to change in statutory tax rates
Negative goodwill
Other
Effective tax rates

2011
40.0%
0.7
(2.5)
3.4
(0.9)
(6.9)
(5.9)
–
(2.3)
4.4
30.0%

The tax effects of temporary differences which gave rise to significant portions of the deferred tax assets and liabilities at March 31, 2012 and 2011are presented below:
Thousands of
U.S. dollars

Millions of yen

2012

2011

2012

Deferred tax assets:
Accrued retirement benefits for employees
Inventories
Tax loss carryforwards
Accrued expenses
Foreign tax credit
Accrued expenses for a defined contribution pension plan
Other
Gross deferred tax assets
Less: valuation allowance
Total deferred tax assets¥ 14,291
491
17,323
2,704
1,806
830
5,433
42,878(4,858)38,020¥ 14,380
395
16,059
2,993
2,130
1,446
5,192
42,595(4,466)38,129$ 173,878
5,974
210,768
32,89921,973
10,09966,103521,694(59,107)462,587

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(10,417)(1,829)(565)(201)(2,514)(15,526)¥ 22,494(7,562)(1,419)(387)(185)(2,312)(11,865)¥ 26,264(126,743)(22,253)(6,874)(2,446)(30,588)(188,904)$ 273,683

Following the promulgation on December 2, 2011 of the “Act for Partial Revision of the Income Tax Act, etc. for the Purpose of Creating Taxation
System Responding to Changes in Economic and Social Structures” (Act No.114 of 2011) and the “Act on Special Measures for Securing Financial
Resources Necessary to Implement Measures for Reconstruction following the Great East Japan Earthquake” (Act No.117 of 2011), Japanese
corporation tax rates will be reduced and the special reconstruction corporation tax, a surtax for reconstruction funding after the Great East Japan
Earthquake, will be imposed for the fiscal years beginning on or after April 1, 2012.

As a result of this change, net deferred tax assets (after netting deferred tax liabilities) decreased by ¥2,360 million ($28,714 thousand), and income
taxes – deferred increased by ¥2,360 million ($28,714 thousand) as of and for the year ended March 31, 2012, respectively.

21. Amounts per Share
Amounts per share at March 31, 2012 and 2011 and for the years then ended were as follows:
U.S. dollars

Yen

Net assets
Net income:
Basic
Cash dividends

2012¥ 370.19

2011¥ 376.05

2012$ 4.50

11.27
10.00

27.08
10.00

0.14
0.12

Amounts per share of net assets are computed based on the number of shares of common stock outstanding at the year end.

78

Consolidated
Financial Statements

In line with these revisions, the Company changed the statutory tax rate to calculate deferred tax assets and liabilities from 40.0% to 37.4% for
temporary differences expected to be realized during the period from the fiscal year beginning on April 1, 2012 to the fiscal year beginning on April
1, 2014. Similarly, the Company changed the statutory tax rate to calculate deferred tax assets and liabilities from 40.0% to 35.0% for temporary
differences expected to be realized during the fiscal year beginning on April 1, 2015 and thereafter.

Notes to Consolidated Financial Statements
March 31, 2012

Basic net income per share is computed based on the net income attributable to shareholders of common stock and the weighted-average
number of shares of common stock outstanding during the year. Diluted net income per share has not been presented because there are no
potentially dilutive shares of common stock outstanding for the years ended March 31, 2012 and 2011.
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.

22. Segment Information
1. Outline of reporting segments
The Group’s reporting segments are divisions of the Group for which separate financial information is available, and whose operating results arereviewed regularly by the highest management decision-making body (Board of Directors meeting of the Company) in order to allocate
management resources and assess performance of operations.
The Group’s main business lines consist of the manufacture and sales of bearings, CVJs and precision equipments for the automotive market,
general industrial machinery market, and distribution and aftermarket. Business activities in Japan are controlled by the Company (the Head
Office), and overseas business activities are controlled by the General Manager responsible in each region. Business entities in each region
prepare their own plans and strategies to conduct business activities while analyzing profitability and the investment efficiency of operations.
Accordingly, the Group has four reporting segments based on geographic business segmentation controlled by the Head Office or the General
Managers: Japan, the Americas, Europe, and Asia and other areas. Each reporting segment engages in the manufacture and sale of bearings,
CVJs, and precision equipment and other products.
2. Calculation methods used for net sales, income, assets, liabilities and other items on each reporting segment
The accounting policies of the segments are substantially the same as those described in the significant accounting policies in Note 2.
Inter-segment sales and transfer are recorded at the same prices used in transactions with third parties.
3. Information as to net sales, income, assets, liabilities, and other items for each reporting segment for the years ended March 31, 2012 and 2011
Millions of yen

2012

Sales, income andassets or liabilities byreporting segments:
Net sales:
Sales to third parties
Inter-segment sales
and transfers
Total
Segment income
Segment assets
Segment liabilities
Other items:
Depreciation and amortization
Capital expenditures

Reporting segments
EuropeAsia and other areas

Japan

Americas¥ 209,970¥ 118,010¥ 139,993¥ 75,495

124,513334,483¥ 8,146¥ 480,571¥ 328,210

3,124
121,134¥ 588¥ 119,717¥ 83,022

3,752
143,745¥ 4,552¥ 125,735¥ 72,582¥ 20,292¥ 18,379¥ 5,952¥ 10,518¥ 4,941¥ 7,892

Total

Adjustments

Consolidated¥ 543,468¥–¥ 543,468

6,922
82,417¥ 5,159¥ 106,353¥ 41,799

138,311681,779¥ 18,445¥ 832,376¥ 525,613(138,311)(138,311)¥ 2,279¥ (139,118)¥ (44,481)–
543,468¥ 20,724¥ 693,258¥ 481,132¥ 2,990¥ 18,864¥ 34,175¥ 55,653¥–¥ (119)¥ 34,175¥ 55,534

Adjustments

Consolidated

Millions of yen

2011

Sales, income andassets or liabilities byreporting segments:
Net sales:
Sales to third parties
Inter-segment sales
and transfers
Total
Segment income
Segment assets
Segment liabilities
Other items:
Depreciation and amortization
Capital expenditures

79

Reporting segments
EuropeAsia and other areas

Japan

Americas¥ 201,276¥ 111,625¥ 140,614¥ 76,541¥ 530,056¥–¥ 530,056

118,346
319,622¥ 8,009¥ 450,135¥ 293,324

2,867
114,492¥ 2,909¥ 109,060¥ 70,593

3,379
143,993¥ 5,957¥ 119,706¥ 68,358

6,032
82,573¥ 6,808¥ 74,863¥ 34,283

130,624
660,680¥ 23,683¥ 753,764¥ 466,558(130,624)(130,624)¥ 877¥ (121,763)¥ (44,910)–
530,056¥ 24,560¥ 632,001¥ 421,648¥ 21,764¥ 12,008¥ 6,117¥ 8,097¥ 5,072¥ 4,600¥ 2,983¥ 5,578¥ 35,936¥ 30,283¥–¥ (55)¥ 35,936¥ 30,228

Total

Thousands of U.S. dollars

2012

Sales, income andassets or liabilities byreporting segments:
Net sales:
Sales to third parties
Inter-segment sales
and transfers
Total
Segment income
Segment assets
Segment liabilities
Other items:
Depreciation and amortization
Capital expenditures

Reporting segments
EuropeAsia and other areas

Japan

Americas$ 2,554,690$ 1,435,820$ 1,703,285$ 918,542

1,514,941
4,069,631$ 99,112$ 5,847,074$3,993,308

38,0091,473,829$ 7,154$ 1,456,588$ 1,010,123

45,6501,748,935$ 55,384$1,529,809$ 883,100$ 246,891$ 223,616$ 72,418$ 127,972$ 60,117$ 96,021

Total

Adjustments

Consolidated$ 6,612,337$–$ 6,612,337

84,2201,002,762$ 62,769$ 1,293,990$ 508,566

1,682,820
8,295,157$ 224,419$ 10,127,461$ 6,395,097(1,682,820)(1,682,820)$ 27,728$ (1,692,639)$ (541,197)–
6,612,337$ 252,147$ 8,434,822$ 5,853,900$ 36,379$ 229,517$ 415,805$ 677,126$–$ (1,448)$ 415,805$ 675,678

The total amount of segment income is adjusted to operating income of the consolidated statements of income.
Other than segment assets, adjustments are the elimination of inter-segment transactions. The adjustments for segment assets consist ofinter-segment elimination of ¥178,673 million ($2,173,902 thousand) and ¥157,270 million and the corporate assets of the group of ¥39,555
million ($481,263 thousand) and 35,507 million at March 31, 2012 and 2011, respectively. The corporate assets are the investments held by theCompany, mainly cash and cash equivalents and investment securities.
4. Related information(1) Sales by products and service
Sales by products and service classified by the similarity of the market for the years ended March 31, 2012 and 2011 are summarized as follows:
Millions of yen

2012

Sale to third parties

Automotive

Industrial
machinery

Repair andaftermarket¥ 342,889¥ 106,619¥ 93,960

Total¥ 543,468

Millions of yen

2011
Automotive¥ 344,408

Sale to third parties

Industrial
machinery

Repair andaftermarket¥ 99,451¥ 86,197

Total¥ 530,056

Thousands of U.S. dollars

2012

Sale to third parties

Automotive

Industrial
machinery

Repair andaftermarket

Total$ 4,171,906$ 1,297,226$ 1,143,205$ 6,612,337(2) Regional information(a) Sales
Sales categorized by countries and regions based on locations of customers within the group for the years ended March 31, 2012 and 2011 aresummarized as follows:
Consolidated
Financial Statements

Millions of yen

2012
Japan

Americas

EuropeAsia and other areas

Total¥ 193,448¥ 124,643¥ 132,969¥ 92,408¥ 543,468

Millions of yen

2011
Japan

Americas

EuropeAsia and other areas

Total¥ 186,595¥ 117,985¥ 132,814¥ 92,662¥ 530,056

Thousands of U.S. dollars

2012
Japan

Americas

EuropeAsia and other areas

Total$ 2,353,668$ 1,516,523$ 1,617,824$ 1,124,322$ 6,612,337“Americas” includes U.S.A., Canada and Central and South America. Europe includes Germany, France, U.K. and others. Asia and other areas
include China, Thailand, India and others. The sales of the “Americas” segment above contain the sales to customers in U.S.A. of ¥106,898 million($1,300,621 thousand) and ¥100,437 million for the years ended March 31, 2012 and 2011, respectively.

80

Notes to Consolidated Financial Statements
March 31, 2012(b) Property, plant and equipment
Property, plant and equipment categorized by countries and regions within the group for the years ended March 31, 2012 and 2011 aresummarized as follows:
Millions of yen

2012
Japan

Americas

EuropeAsia and other areas

Total¥ 130,657¥ 56,850¥ 40,189¥ 37,986¥ 265,682

Millions of yen

2011
Japan

Americas

EuropeAsia and other areas

Total¥ 133,821¥ 52,524¥ 37,218¥ 22,569¥ 246,132

Thousands of U.S. dollars

2012
Japan

Americas

EuropeAsia and other areas

Total$ 1,589,694$ 691,690$ 488,977$ 462,173$ 3,232,534

1. Property, plant and equipment in “Americas” in the amount of ¥50,753 million ($617,508 thousand) and ¥46,373 million is located in the U.S.A.
at March 31, 2012 and 2011, respectively.
2. Property, plant and equipment in “Europe” in the amount of ¥30,864 million ($375,520 thousand) and ¥31,387 million is located in France at
March 31, 2012 and 2011, respectively.
3. Property, plant and equipment in “Asia and other areas” in the amount of ¥28,483 million ($346,551 thousand) is located in China at March 31, 2012.
5. Significant gain on recognition of negative goodwill
The Company increased its ownership in NTN-SNR ROULEMENTS, a consolidated subsidiary, to 80% by acquiring an additional 29% ownershipinterest on April 22, 2010. This resulted in a gain on recognition of negative goodwill recorded in the “Japan” segment. The amount was ¥1,203
million, which was included in the component of gain on recognition of negative goodwill in the consolidated statement of income for the year
ended March 31, 2011.

23. Business Combination
1. Summary of business combination(1) Company name and business description of acquired company
Acquired company: IFA-Antriebstechnik G.m.b.H.
Business description: Manufacture and sales of CVJs
(2) Main purpose for business combination
The Company aims to enhance the consolidation group management and to expand CVJ business in Europe by including IFA-Antriebstechnik
G.m.b.H. as a consolidated subsidiary.
(3) Date of the business combination
March 12, 2012
(4) Legal description of business combination
Acquisition of stocks by the exercise of stock acquisition rights on exchangeable bonds.
(5) Company name of acquired company after business combination
NTN Antriebstechnik G.m.b.H. (Changed its name from IFA-Antriebstechnik G.m.b.H. in April 2012)(6) Acquired ratio of voting rights
Ratio of voting rights before business combination: 25%
Ratio of voting rights additionally acquired through business combination: 50%
Ratio of voting rights after business combination: 75%
2. Period of acquired company’s operating results in consolidated statement of income
Since the deemed acquisition date was March 31, 2012, the operating results of the acquired company are not included in the consolidated
statement of income for the year ended March 31, 2012.
3. Details on acquisition cost of acquired company

Fair value of the stocks of NTN Antriebstechnik G.m.b.H. held by the Company before business combination
Fair value of the stocks of NTN Antriebstechnik G.m.b.H. additionally acquired through business combination
Total acquisition cost81

Millions of yen

Thousands of
U.S. dollars

¥ 931
1,863
¥ 2,794$ 11,327
22,667$ 33,994

4. Difference between acquisition cost and the total amount of all trade transactions for the acquisition
Loss on step acquisitions included in “Other, net” presented in the consolidated statement of income for the year ended March 31, 2012: ¥25
million ($304 thousand)
5. Amount of goodwill, reason for goodwill and method and period of amortization(1) Amount of goodwill¥279 million ($3,395 thousand)(2) Reason for goodwill
Goodwill was recognized due to the difference between the equity interest for acquired company and acquisition cost.
(3) Method and period of amortization
The amount of goodwill is being amortized on the straight-line method over the estimated period of the economic benefits.

24. Subsequent Events(a) In July 2011, on-site inspections of the Company's offices were conducted by the Japan Fair Trade Commission, followed by the start of acriminal investigation by the Special Investigation Department of the Tokyo District Public Prosecutor’s Office and the Japan Fair Trade
Commission in April 2012 due to suspicions of conspiracy with certain competitors and the existence of an alleged price-fixing cartel related tosales of bearings in Japan.
On June 14, 2012, the Japan Fair Trade Commission filed a criminal complaint alleging violations of the Anti Monopoly Act of Japan and charges
were filed by the Tokyo District Public Prosecutor’s Office against the Company and a few now-former officers.
This action may result in the Company incurring losses, such as surcharges, after the government investigation is completed. However, it isdifficult for us to reasonably estimate the future impact on results of operations and financial position at this time.
(b) The following distribution of retained earnings of the Company, which has not been reflected in the accompanying consolidated financial statements
as of March 31, 2012 and for the year then ended, was approved at the annual general meeting of the shareholders held on June 26, 2012:

Year-end cash dividends (¥5.0 (U.S.$0.06) per share)

Millions of yen

Thousands of
U.S. dollars¥ 2,659$ 32,352

Consolidated
Financial Statements82

Report of Independent Auditors

83

Global Network
As of October 1, 2012JAPANNTN Corporation
Headquarter
1-3-17 Kyomachibori, Nishi-ku, Osaka-shi,
Osaka 550-0003, Japan
Phone : +81-6-6443-5001
http://www.ntn.co.jp/

TOKYO Sales Office
Taiyo Seimei Shinagawa Bldg. 2-16-2 Konan,
Minato-ku, Tokyo 108-0075, Japan
Phone: +81-3-6713-3606
Fax: +81-3-6713-3681

HOKURIKU Sales Branch
2-37-18 Sainen, Kanazawa-shi, Ishikawa
920-0024, Japan
Phone: +81-76-263-8673
Fax: +81-76-263-8628

Automotive Business HQ.

HOKKAIDO Satellite Office
2-2-37 Kikusui9jo, Shiroishi-ku, Sapporo-shi,
Hokkaido 003-0809, Japan
Phone: +81-11-822-8788
Fax: +81-11-822-8835

HIROSHIMA Sales OfficeAbas Hiroshima 7F, 1-2-19, Matoba-cho,
Minami-ku, Hiroshima-shi, Hiroshima732-0824, Japan
Phone: +81-82-568-1470
Fax: +81-82-568-5913

KANTO Automotive Sales Office
Taiyo Seimei Shinagawa Bldg. 2-16-2 Konan,
Minato-ku, Tokyo 108-0075, Japan
Phone: +81-3-6713-3605
Fax: +81-3-6713-3685

IBARAKI Sales Branch
M.Y Bldg. 6F, 1-15-11 Sakura-machi,
Tsuchiura-shi, Ibaraki 300-0037, Japan
Phone: +81-29-823-3528
Fax: +81-29-824-7633

UTSUNOMIYA Automotive Sales Office
NOF Utsunomiya Bldg. 6F, 2-1-1 Babadori,
Utsunomiya-shi, Tochigi 320-0026, Japan
Phone: +81-28-632-0511
Fax: +81-28-632-0576

UTSUNOMIYA Sales Branch
NOF Utsunomiya Bldg. 6F, 2-1-1 Babadori,
Utsunomiya-shi, Tochigi 320-0026, Japan
Phone: +81-28-632-0553
Fax: +81-28-632-0576

KITA-KANTO Automotive Sales Office22-31 Higashi Honcho, Ohta-shi, Gumma
373-0026, Japan
Phone: +81-276-22-4231
Fax: +81-276-25-5379

KOFU Sales Branch
Sun Line Kofu Bldg. 3F, 7-5-17 Kokubo,
Kofu-shi, Yamanashi 400-0043, Japan
Phone: +81-55-232-2301
Fax: +81-55-232-2252

TOKAI Automotive Sales Office
Karitsu Bldg. 6F, 1-4-4 Mikawaanjyo-cho,Anjo-shi, Aichi 446-0056, Japan
Phone: +81-566-72-2030
Fax: +81-566-72-2420

NISHI-KANTO Sales OfficeCentral Bldg. 2F, 3-14-7 Chuo, Chuo-ku,
Sagamihara-shi, Kanagawa 252-0239, Japan
Phone: +81-42-757-1011
Fax: +81-42-758-2150

HAMAMATSU Automotive Sales OfficeHamamatsu Daiichiseimei Nittsu Bldg. 7F,
110-5 Itaya-machi, Naka-ku,
Hamamatsu-shi, Shizuoka 430-0928, Japan
Phone: +81-53-454-2586
Fax: +81-53-454-2589

NUMAZU Sales Branch
4-6 Masago-cho, Numazu-shi, Shizuoka
410-0861, Japan
Phone: +81-55-962-7573
Fax: +81-55-951-6427

Sales Office

OSAKA Automotive Sales Office
1-3-17 Kyomachibori, Nishi-ku, Osaka-shi,
Osaka 550-0003, Japan
Phone: +81-6-6449-6711
Fax: +81-6-6443-1578
HIROSHIMA Automotive Sales OfficeAbas Hiroshima 7F, 1-2-19 Matoba-cho,
Minami-ku, Hiroshima-shi, Hiroshima732-0824, Japan
Phone: +81-82-568-5912
Fax: +81-82-568-5913

Industrial Business HQ.

OSAKA Sales Office
1-3-17 Kyomachibori, Nishi-ku, Osaka-shi,
Osaka 550-0003, Japan
Phone: +81-6-6449-6712
Fax: +81-6-6448-7296
KOBE Sales Branch
Asahi Seimei Akashi Bldg. 6F, 2-2-20
Honmachi, Akashi-shi, Hyogo 673-0892,
Japan
Phone: +81-78-917-1201
Fax: +81-78-917-1205

MIZUSHIMA Sales Branch
Sumitomo Seimei Kurashiki Bldg. 3F, 2-4-6
Showa, Kurashiki-shi, Okayama
710-0057, Japan
Phone: +81-86-425-6311
Fax: +81-86-425-6322
KYUSHU Sales Office2-4-19 Kamiitozu, Kokurakita-ku,
Kitakyushu-shi, Fukuoka 803-0845, Japan
Phone: +81-93-571-6581
Fax: +81-93-571-6180

Precision Equipment Division
Sales of Eastern Region
Taiyo Seimei Shinagawa Bldg. 2-16-2 Konan,
Minato-ku, Tokyo 108-0075, Japan
Phone: +81-3-6713-3652
Fax: +81-3-6713-3687
Sales of Western Region
1-3-17 Kyomachibori, Nishi-ku, Osaka-shi,
Osaka 550-0003, Japan
Phone: +81-6-6443-6716
Fax: +81-6-6443-1578
Sales of Central Region
Nagoya Nishiki Front Tower Bldg. 11F, 2-3-4
Nishiki, Naka-ku, Nagoya-shi, Aichi
460-0003, Japan
Phone: +81-52-222-3291
Fax: +81-52-222-3341

Sales Related Subsidiary Company
NTN Bearing Service Co., Ltd.
3-1-13 Shibakoen, Minato-ku, Tokyo
105-0011, Japan
Phone: +81-3-5776-6001
Fax: +81-3-5776-6002

Company and Investor
Information

TOHOKU Sales OfficeKearney Place Sendai Ekimae-dori Bldg. 9F,
1-5-28 Honcho, Aoba-ku, Sendai-shi, Miyagi
980-0014, Japan
Phone: +81-22-262-6201
Fax: +81-22-262-6205

NAGOYA Sales Office
Nagoya Nishiki Front Tower Bldg. 11F, 2-3-4
Nishiki, Naka-ku, Nagoya-shi, Aichi
460-0003, Japan
Phone: +81-52-222-3301
Fax: +81-52-222-3341

FUKUYAMA Sales Branch
Fukuyama DS Bldg. 11F, 2-35 Momiji-cho,
Fukuyama-shi, Hiroshima 720-0811, Japan
Phone: +81-84-925-2202
Fax: +81-84-926-2593

84Factories
Industrial Business HQ.
KUWANA Works
2454 Tsuchijima, Higashikata, Kuwana-shi,Mie 511-8678, Japan
Phone: +81-594-24-1811
Fax: +81-594-21-0840
Automotive Business HQ.
IWATA Works
1578 Higashikaizuka, Iwata-shi, Shizuoka
438-8510, Japan
Phone: +81-538-37-8000
Fax: +81-538-37-8009
Automotive Business HQ.
OKAYAMA Works
500-1 Hatakeda, Bizen-shi, Okayama
705-8510, Japan
Phone: +81-869-66-6701
Fax: +81-869-66-8101
Industrial Business HQ.
NAGANO Works
14017-11 Nakaminowa, Minowa-machi,
Kamiina-gun, Nagano 399-4601, Japan
Phone: +81-265-79-8888
Fax: +81-265-79-8881

Research and Development Center(Kuwana Area)
Industrial Technical CenterIndustrial Business HQ.
Composite Material Product Division3066 Higashikata, Kuwana-shi, Mie
511-8678, Japan
Advanced Technology R&D Center
5-105 Hidamarinooka, kuwana-shi, Mie
511-0867, Japan(Iwata Area)
NTN R&D Center
New Product Development R&D Center
Automotive Business HQ.
EV System Division
Precision Equipment Division
Production Engineering R&D Center
CVJ Axle unit Technical Center
1578 Higashikaizuka, Iwata-shi, Shizuoka
438-8510, Japan

Manufacturing and Parts Processing
Subsidiaries
NTN KONGO Corp.
1-3-13 Kidonishi-machi, Kawachinagano-shi,
Osaka 586-0009, Japan
Phone: +81-721-53-1317
Fax: +81-721-54-6981
http://www.ntn-kongo.co.jp/
NTN Engineering Plastics Corp.
970 Ano, Toin-cho, Inabe-gun, Mie
511-0243, Japan
Phone: +81-594-76-7221
Fax: +81-594-76-7244
http://www.ntn-epc.com/

NTN KINAN Corp.
2504-1 Ikuma, Kamitonda-cho,Nishimuro-gun, Wakayama 649-2103, Japan
Phone: +81-739-47-1801
Fax: +81-739-47-1829
NTN BIZEN Corp.
2139-2 Yamaguchi, Akaiwa-shi, Okayama
701-2225, Japan
Phone: +81-869-57-3101
Fax: +81-869-57-3102

NTN Powder Metal Corp.
101 Katsutaba, Kanieshinden, Kanie-cho,Ama-gun, Aichi 497-8541, Japan
Phone: +81-567-95-3913
Fax: +81-567-95-6160
http://www.ntn-goukin.com/

NTN AKAIWA Corp.
100-43 Tsurui, Akaiwa-shi, Okayama
709-0718, Japan
Phone: +81-86-995-9541
Fax: +81-86-995-9542

NTN MIKUMO Co., Ltd.
750-1 Onoe-cho, Matsusaka-shi, Mie
515-2109, Japan
Phone: +81-598-56-3311
Fax: +81-598-56-7151

NTN TADO Corp.
1077 Yui, Tado-cho, Kuwana-shi, Mie
511-0101, Japan
Phone: +81-594-48-2383
Fax: +81-594-48-2796

NTN Casting Corp.
475-1 Nadabun-cho, Izumo-shi, Shimane
691-0003, Japan
Phone: +81-853-63-3108
Fax: +81-853-63-3463

NTN HAKUI Corp.
32 Mitsuyamachi, Hakui-shi, Ishikawa
925-0024, Japan
Phone: +81-767-22-8910
Fax: +81-767-22-5689

Hikari Seiki Industry Co., Ltd.
8 Higashikata, Sanmaiden-cho, Tenri-shi,
Nara 632-0046, Japan
Phone: +81-743-66-0285
Fax: +81-743-67-1512
http://www.hikari-seiki.com/

NTN HOUDATSUSHIMIZU Corp.
1-1 Futakuchi, Houdatsushimizu-cho,Hakui-gun, Ishikawa 929-1421, Japan
Phone: +81-767-22-5111
Fax: +81-767-22-5330

NTN MIE Corp.
3601-25 Mizono, Tado-cho, Kuwana-shi, Mie
511-0118, Japan
Phone: +81-594-48-6711
Fax: +81-594-48-7130
http://www.ntn-mie.com/
NTN KAMIINA Corp.
522-2 Nakazone, Minowa-machi,
Kamiina-gun, Nagano 399-4605, Japan
Phone: +81-265-79-7877
Fax: +81-265-79-7366
NTN FUKUROI Corp.
1959 Midori, Fukuroi-shi, Shizuoka
437-0005, Japan
Phone: +81-538-30-1800
Fax: +81-538-30-1814

85

NTN OMAEZAKI Corp.
4681-3 Sakura, Omaezaki-shi, Shizuoka
437-1604, Japan
Phone: +81-537-86-2480
Fax: +81-537-86-2227

NTN SHIKA Corp.
5-58-2 Horimatsu, Shika-machi, Hakui-gun,Ishikawa 925-0157, Japan
Phone: +81-767-38-8110
Fax: +81-767-38-1666
NTN NOTO Corp.
38 Wakabadai, Shika-machi, Hakui-gun,Ishikawa 925-0375, Japan
Phone: +81-767-38-8020
Fax: +81-767-38-8022
Nippon Kagaku Yakin Co., Ltd.
13-3 Taisei-cho, Neyagawa-shi, Osaka
572-8558, Japan
Phone: +81-72-821-6327
Fax: +81-72-821-6505

AMERICASNTN USA Corp
http://www.ntnamerica.com/
1600 E. Bishop Court, P.O. Box 7604, Mount Prospect,
IL 60056-7604, U.S.A.
Phone: +1-847-298-7500
Fax: +1-847-294-1209

Sales Office
NTN Bearing Corp. of America
http://www.ntnamerica.com/
Head Office
1600 E. Bishop Court, P.O. Box 7604, Mount Prospect,
IL 60056-7604, U.S.A.
Phone: +1-847-298-7500 Fax: +1-847-699-9744
Central Sales Office2413 North Main Street, East Peoria, IL 61611, U.S.A.
Phone: +1-309-699-8600 Fax: +1-309-699-8670
NTN Automotive Center
39255 W. 12 Mile Road, Farmington Hills, MI 48331-2975,
U.S.A.
Phone: +1-248-324-4700 Fax: +1-248-324-1103
NTN Bearing Corp. of Canada Ltd.
http://www.ntn.ca/
Head Office
305 Courtneypark Drive West, Mississauga, Ontario, L5W
1Y4, Canada
Phone: +1-905-564-2700 Fax: +1-905-564-9023
Vancouver Branch
106 B-3680 Bonneville Place Burnaby, B.C., V3N 4T6,
CanadaPhone: +1-604-444-2007 Fax: +1-604-444-2665
Edmonton Branch4608-97th Street, Edmonton, Alberta T6E 5N9, Canada
Phone: +1-780-435-6200 Fax: +1-780-435-3600
Toronto Branch
305 Courtneypark Drive West, Mississauga, Ontario, L5W
1Y4, Canada
Phone: +1-905-564-2700 Fax: +1-905-564-9609
Montreal Branch4973 Levy Street, St-Laurent, Quebec, H4R 2N9, Canada
Phone: +1-514-333-8054 Fax: +1-514-333-1078
NTN de Mexico, S.A.
http://www.ntnmexico.com.mx/
Mexico Head Office
Emilio Cárdenas No.158 Apdo.124, C.P.54030,
Tlalnepantla, Edo.de México, Mexico
Phone: +52-55-5390-1133 Fax: +52-55-5565-8545
Guadalajara Branch
Calle 22 No.2465, Zona Industrial, C.P.44940,
Guadalajara, Jalisco, Mexico
Phone: +52-33-3145-1448 Fax: +52-33-3145-1594
Monterrey Branch
Av. Ruiz Cortines No.1336 Ote, Col. La Purisima,
C.P.67120, Cd. Guadalupe, Nuevo Leon, Mexico
Phone: +52-818-334-9931 Fax: +52-818-334-9932
Mexicali Branch
Blvd. Benito Juárez No.3293 Esq. Ayuntamiento,
C.P.21360, Mexicali, BCN, Mexico
Phone: +52-686-563-3632 Fax: +52-686-582-2057
NTN-Sudamericana,S.A.
http://www.ntnsudamericana.com/
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 Fax: +507-264-5592
NTN do Brasil Ltda.
http://www.ntn.com.br/
Av. Moema, 94-9° Andar-conj, 92a94 CEP
04077-020-Indianópolis-São Paulo-SP, Brasil
Phone: +55-11-5051-0600 Fax: +55-11-5051-2807
NTN-SNR ROULEMENTS
http://www.ntn-snr.com/

SNR ARGENTINA
Viamonte 1145-Piso 11-1053 Buenos Aires, Argentina
Phone: +54-11-4-372-1272 Fax: +54-11-4-372-0088
SNR ROLAMENTOS DO BRASIL LTDA.
Head Office
Av. das Industrias, 380 - Parque Industrial - CEP
83.820-332 - Fazenda Rio Grande - PR - Brazil
Phone: +55-41-3-627-80-00 Fax: +55-52-3-627-80-80

NTN-Bower Corp.
http://www.ntnbower.com/
Macomb Plant
711 North Bower Road, Macomb, IL 61455-2511 U.S.A.
Phone: +1-309-833-4541
Hamilton Plant
2086 Military Street South, Hamilton, AL 35570, U.S.A.
Phone: +1-205-921-2173
NTN Driveshaft Inc.
http://www.ntndriveshaft.com/
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
Asahi Forge of America Corp.
5030 Corporate Way Richmond, Kentucky 40475, U.S.A.
Phone: +1-859-626-4100
NTN Bearing Manufacturing of Canada(A div. of NTN Bearing Corp. of Canada Ltd.)
http://www.ntn.ca/
6740 Kitimat Road, Mississauga, Ontario, L5N 1M6,
CanadaPhone: +1-905-826-5500
Seohan-NTN Driveshaft USA Corp.
264 Teague Court, Auburn, AL 36832, U.S.A.
Phone: +1-334-321-3200
NTN Driveshaft do Brasil
Estrada Municipal, 400 Bairro Jardim Santo Afonso, CEP
07215-040, Guarulhos-São Paulo, Brasil
Phone: +55-11-2085-5000
NTA Precision Axle Corp.
795 Kimberly Drive, Carol Stream, IL 60188, U.S.A.
NTN-SNR ROULEMENTS
http://www.ntn-snr.com/
SNR ROLAMENTOS DO BRASIL LTDA.
Curitiba Plant
Av. das Industrias, 380 - Parque Industrial - CEP
83.820-332 - Fazenda Rio Grande - PR - Brazil

Research Center
NTN Bearing Corp. of America
http://www.ntnamerica.com/
Industrial Engineering DeptNTN Automotive Center

EUROPE
Sales Office

NTN Wälzlager (Europa) GmbH
http://www.ntn-snr.com/
Head Office
Max-Planck-Str. 23, 40699 Erkrath, F.R. Germany
Phone: +49-211-2508-0 Fax: +49-211-2508-400
Stuttgart Branch
Plieninger Str. 63B, 70794 Filderstadt F.R.Germany
Phone: +49-711-123901-0 Fax: +49-711-123901-660
NTN Bearings (UK) Ltd.
http://www.ntn-snr.com/
Wellington Crescent, Fradley Park, Lichfield, Staffordshire,
WS13 8RZ, UK
Phone: +44-1543-445000 Fax: +44-1543-445035
NTN-SNR ROULEMENTS
http://www.ntn-snr.com/
Head Office
1, rue des usines BP 2017, 74010 Annecy, France
Phone: +33-4-50-65-30-00 Fax: +33-4-50-65-30-88
Lyon Branch
51, rue des Docks, 69009 Lyon, France
Phone: +33-4-78-66-68-00 Fax: +33-4-78-66-68-20

Paris Branch
6, rue Auguste Comte, BP49, 92174 Vanves Cedex,
FrancePhone: +33-1-40-93-66-00 Fax: +33-1-40-93-66-10
Cran Gevrier Branch
6 route de la Salle,74960 Cran Gevrier, France
Phone: +33-4-50-65-93-00 Fax: +33-4-50-65-93-46
Haguenau Branch
4 rue de la Sablière BP30338- 67507 Haguenau, France
Phone: +33-3-88-53-22-22 Fax: +33-3-88-73-46-95
Argonay Branch114, Rte de Champ Farçon 74 370 Argonay, France
Phone: +33-4-50-65-94-00 Fax: +33-4-50-65-94-25
SNR WAELZLAGER GMBH
Head Office
Max-Planck-Str. 23, 40699 Erkrath, F.R.Germany
Phone: +49-211-2508-0 Fax: +49-211-2508-400
Bielefeld BranchFriedrich-Hagemann-Straße 66, 33719 Bielefeld, Germany
Phone: +49-521-9-24-00-0 Fax: +49-521-9-24-00-90
Stuttgart Branch
Plieninger Str. 63B, 70794 Filderstadt F.R.Germany
Phone: +49-711-123901-0 Fax: +49-711-123901-660
NTN-SNR ITALIA S.P.A.
Via Riccardo Lombardi, 19/4, 20153 Milan, Italy
Phone: +39-02-47-99-86-1 Fax: +39-02-33-50-06-56
NTN-SNR IBERICA SA
Calle Barberán n° 6, 28035 Madrid, Spain
Phone: +34-916-71-89-13 Fax: +34-916-73-65-48
NTN-SNR POLSKA Sp. z o. o.
Al. Stanów Zjednoczonych 61A 04-028 Warsaw, Poland
Phone: +48 22 516 20 60 Fax: +48 22 516 20 62
NTN-SNR RULMENTI S.R.L.
Head Office
Zona Industriala-Vest, 6 Strada Salzburg, 24 00 SIBIU,
Romania
Phone: +40-269-20-35-00 Fax: +40-269-20-35-25
NTN-SNR MAROC
Route côtière 111, Quartier industriel, Polygone 1,
Casablanca, Maroc
Phone: +212-522-66-76-80 Fax: +212-522-66-5166

Production Plant
NTN Transmissions Europe
Z.A. des Tremelieres Communaute Urbaine du Mans
72704 Allonnes Cedex, France
Phone: +33-2-43-83-90-00
NTN Transmissions Europe Crézancy
Route de Paris, 02650 Crézancy, France
Phone: +33-3-23-71-50-00
NTN Kugellagerfabrik (Deutschland) GmbHNTN Strasse 1-3, 40822 Mettmann, F.R. Germany
Phone: +49-2104-1409-0
NTN Antriebstechnik GmbHBuschstuckenstrasse 6, D-39638 Gardelegen, Germany
Phone: +49-3907-777-0
NTN-SNR ROULEMENTS
http://www.ntn-snr.com/
Annecy Plant
1, rue des Usines BP2017 74010 Annecy, France
Phone: +33-4-50-65-30-00
Argonay Plant
114 Rte de Champ Farçon 74370 Argonay, France
Phone: +33-4-50-65-94-00
Seynod Plant
Chemin de la Vallée 74600 Seynod, France
Phone: +33-4-50-65-91-00
Meythet Plant
Route de Frangy 74960 Meythet, France
Phone: +33-4-50-65-95-00
SNR CEVENNES
Alès Plant
2 vieille route de Salindres 30340 Saint Privat des Vieux,
FrancePhone: +33-4-66-54-67-00
SNR WAELZLAGER GMBH
Bielefeld BranchFriedrich-Hagemann Str.66 33701 Bielefeld Postflach 17
01 45, Germany
Phone: +49-521-9-24-00-0
ICSA INDUSTRIA CUSCINETTI S.P.A.
ICSA Plant
San Benigno Cavanese, 4 via Giotto (1) Torino (ITALIE)
Phone: +39-011-982-48-11

86

Company and Investor
Information

SNR BEARINGS USA, INC.
4600 K Highlands Pkwy Smyrna, GA 30082, USA
Phone: +1-770-435-2818 Fax: +1-800-742-5215

Production Plant
American NTN Bearing Mfg. Corp.
http://www.ntnamerica.com/
Elgin Plant
1500 Holmes Road, Elgin, lL 60123, U.S.A.
Phone: +1-847-741-4545
Schiller Park Plant
9515 Winona Avenue, Schiller Park, lL 60176, U.S.A.
Phone: +1-847-671-5450

NTN-SNR RULMENTI S.R.L.
Sibiu Plant
Zona Industriala-Vest, 6 Strada Salzburg, 24 00 SIBIU,
Romania
Phone: +40-269-20-35-00

Research and Development Center
NTN Wälzlager (Europa) GmbHEngineering Dept.
NTN Transmissions Europe
Research and Development Dept.
NTN-SNR ROULEMENTS
Research and Development Dept.

ASIA and OCEANIA
Sales Office

NTN Bearing-Singapore (Pte) Ltd.
http://www.ntn.com.sg/
Head Office
No.9 Clementi Loop Singapore 129812
Phone: +65-6469-8066 Fax: +65-6469-5400
Philippine Representative Office
Unit 1002 Philippine Axa Life Centre Condominium
Corporation Sen. Gil Puyat Ave Corner Tindalo Street
Makati City, Philippines
Phone: +63-2-759-4407 Fax: +63-2-759-4409
Vietnam Representative Office
303, 3rd of Thanh Dong Building 132 - 138 Kim Ma Str.,Ba Dinh Dist.,Ha Noi, Viet Nam
Phone: +84-4-37347660 Fax: +84-4-37347662
NTN Bearing Thailand Co., Ltd.
Head Office
12th Floor, Panjathani Tower, 127/15 Nonsee Road,
Chongnonsee Yannawa, Bangkok 10120, Thailand
Phone: +66-2-681-0401 Fax: +66-2-681-0408
Khon Kaen Branch
189-191 Ruen Rom Road Tambon Nai-Muang, Amphur
Muang, Kohn Kaen, 40000, Thailand
Phone: +66-43-223679 Fax: +66-43-223061
Haad Yai Branch198-198/1 Nipat U-Thid 2 Road, Amphur Haad Yai,Songkhla, 90110, Thailand
Phone: +66-74-236568 Fax: +66-74-231520
Bangna Branch
35/35 Bangna-Trad Road, KM11.5 Bangplee,
Samutprakarn, 10540, Thailand
Phone: +66-2-7501732 Fax: +66-2-7501731
Chiangmai Branch
208 (Room B3-B4)Moo4 2nd, Ring Road, T.Nong Hoi,
A.Muang, Chiangmai 50000, Thailand
Phone: +66-53-142571 Fax: +66-53-142573
NTN Bearing-Malaysia Sdn. Bhd.
Head Office
No.2, Jalan Arkitek U 1/22, Section U1, Hicom Glenmarie
Industrial Park, 40150 Shah Alam, Selangor Darul Ehsan,
Malaysia
Phone: +60-3-55696088 Fax: +60-3-55690200
Butterworth Branch
4700, Jalan Permatang Pauh, 13400 Butterworth,
Malaysia
Phone: +60-4-3328312 Fax: +60-4-3324407
Ipoh Branch
65, Medan Kidd, Kinta Mansion,30200 Ipoh, Malaysia
Phone: +60-5-2547743 Fax :+60-5-2538077
Kuantan Branch
B-72, Ground Floor, Jalan Beserah 25300 Kuantan,
Malaysia
Phone: +60-9-5141132 Fax: +60-9-5141164
Johor Bahru Branch
51 Jalan, Sri Bahagia 5, Taman Sri Bahagia, Tampoi,
81200 Johor Bahru, Malaysia
Phone: +60-7-2364929 Fax: +60-7-2370897
NTN Korea Co., Ltd.
Head Office
10th Floor, Press Center, 25, Taepyeong-Ro
1-GA,Jung-Gu, Seoul 100-745, Korea
Phone: +82-2-720-3666 Fax: +82-2-720-3669
Busan Branch
Rm.707, 7th Floor, Daerim Bldg., 341-5 Bujeon 1-Dong,
Busanjin-Gu, Busan, 614-843 Korea
Phone: +82-51-811-1351 Fax: +82-51-811-1353

87

NTN-CBC (Australia) Pty Ltd.
http://www.conbear.com/
3, The Crescent, Kingsgrove, NSW 2008, Locked Bag
1800, Kingsgrove 1480. NSW Australia
Phone: +61-2-99479200 Fax: +61-2-95543311
PT. NTN Bearing Indonesia
C-21, 22 MM2100 Industrial Town, Cikarang Barat,
BEKASI 17520 West Jave Indonesia
Phone: +62-21-252-2081 Fax: +62-21-252-2082
NTN Bearing India Pvt. Ltd.
Head Office
SPIC Annexe Building, 2nd Floor No.86, Mount Road,
Guindy Chennai 600032, India
Phone: +91-44-33707700 Fax: +91-44-33707701
Delhi Branch715-716, International Trade Tower, Nehru Place, New
Delhi - 1100019, India
Phone: +91-11-40520406 Fax: +91-11-40520407

Production Plant
NTN Manufacturing (Thailand) Co., Ltd.
Automotive Products Plant
111/2 Moo 4, Tambol Pluakdaeng, Amphur Pluakdaeng,
Rayong 21140, Thailand
Phone: +66-38-955-185
Composite Material products Plant
64/89 Moo 4, Tambol Pluakdaeng, Amphur Pluakdaeng,
Rayong, 21140,Thailand
Phone :+66-38-955-935
Pinthong Automotive Products Plant
789/172 Moo1 Tambon Nongkham Amphur Sriracha
Chonburi 20230,Thailand
Phone :+65-38-348-572
NTN NEI Manufacturing India Pvt. Ltd.
Bawal Plant
Plot No. 131, Sector-7, HSIIDC Growth Centre, Bawal
Distt. Rewari, Haryana 123501, India
Phone: +91-1284-264124
Chennai Plant
Plot P48/1,8th Avenue,DTA,Mahindra World
City,Chengalpattu Taluk, Kancheepuram
District,Tamilnadu-603 204, India
Phone: +91-44-3748-3600
Tung Pei Industrial Co., Ltd.
http://www.tungpei.com.tw/
Head office
10th Floor No.142, Chung Hsiao E. Rd., Sec. 4, Taipei,
Taiwan, R.O.C.
Phone: +886-2-27417321
Taoyuan Plant
No.600, Sec. 1, Jieshou Rd., Bade City, Taoyuan County
334, Taiwan, R.O.C.
Phone: +886-3-361-3151
Chungli Plant
No.7, Songjiang N. Rd., Jhongli City, Taoyuan County 320,
Taiwan, R.O.C.
Phone: +886-3-452-6801
Taiway Ltd.
http://www.roc-spicer.com.tw/taiway/
No.14, Kwang Fu Road, Hukou 303, Hsianchu, Taiwan,
R.O.C.
Phone :+886-3-598-3601
Unidrive Pty Ltd.
http://www.unidrive.com/
45-49 McNaughton Road, Clayton Victoria 3168, Australia
P.O.Box 146, Clayton, Victoria 3168, Australia
Phone: +61-3-9542-4100
Seohan-NTN Bearing Co., Ltd.
1084-4 Yongmyeong-Ri, Geoncheon-Eub, Gyeongju-City,
Gyeongsangbuk-Do, 780-903, Korea

CHINA
Sales Office
NTN (China) Investment Corporation
http://www.ntn.com.cn/
Shanghai Head Office
No. 6 building No. 1666 Nanle Road. Songjiang Industrial
Zone, Songjiang, Shanghai 201611, China
Phone: +86-21-5774-5500 Fax: +86-21-5778-2898
Beijing Branch
Unit 3018, South Tower, Beijing Kerry Centre, 1 Guanghua
Road, Chaoyang District, Beijing 100020, China
Phone: +86-10-6568-3069 Fax: +86-10-6568-2278

Guangzhou Branch
Room 3606, Onelink Center, No.230-232 Tianhe Road,
Tianhe District, Guangzhou 510620, China
Phone: +86-20-3877-2943 Fax: +86-20-3877-2942
Nanjing Branch
Room 18A, Nanjing IFC, No.1 Hanzhong Rd, Baixia
District, Nanjing 210029, China
Phone: +86-25-8477-5355 Fax: +86-25-8477-5360
Chongqing Branch
Room 15-6, Carnival Mansion, No.9 Guanyingqiao Street,
Jiangbei District, Chongqing 400020, China
Phone: +86-23-6796-0812 Fax: +86-23-6796-0878
Shenyang Branch
Room 2606, China Resources Building, No.286 QingnianStreet, Heping District, Shenyang 110004, China
Phone: +86-24-3137-9186 Fax: +86-24-3137-9185
NTN China Ltd.
http://www.ntnchina.com/
Hong kong Office
Room 1914-15, Park-In Commercial Centre, 56 Dundas
Street, Mongkok, Kowloon, Hong Kong
Phone: +852-2385-5097 Fax: +852-2385-2138
NTN-DONGPAI (Shanghai) Bearing Sales Corp.
3F, No.195 Nan Suzhou Road, Shanghai 200002, China
Phone: +86-21-6323-2603 Fax+86-21-6323-2923

Production Plant
Shanghai NTN Corp.
No. 1666, Nanle Road, Songjiang Industrial Zone,
Songjiang, Shanghai 201611, China
Phone: +86-21-5774-8666
Guangzhou NTN-Yulon Drivetrain Co., Ltd.
No.11 Jun Da Road, East District of Guangzhou
Economic and Technological Development Zone,
Guangzhou, Guangdong Province 510530, China
Phone: +86-20-8226-6458
NTN-RAB (Changzhou) Corp.
No.200 Chuangxin Road (Electronic Industrial Park),
Changzhou, Jiangsu Province 213031, China
Phone: +86-519-8302-8880
Beijing NTN-Seohan Driveshaft Co., Ltd.
No.3 Zhengfu Road Opto-mechatronics Industrial Park,
Beijing 101111, China
Phone: +86-10-6950-7324
Shanghai Tung Pei Enterprise Co., Ltd.
No.1555 Rongle Road.(E), Songjiang Industrial Zone,
Shanghai 201613, China
Phone: +86-21-5774-4698
Nanjing Puzhen NTN Railway Bearing Co., Ltd
No.5 Longhu Alley, Puzhen Town, Nanjing, China
Phone: +86-25-8584-7197
Shanghal Laien Machine Tool Parts Corp.
No.10-2 Jinwen Road, Nanhui Area, Shanghai 201323,
China
Phone: +86-21-5810-9163
NTN-LYC (Luoyang) Bearing Corporation
No.1 Zhangheng Road, Luoyang Technology Park
Luoyang, Henan Province 471023, China
Phone: +86-379-6498-4299
Nanjing NTN Corporation
No1.Yangjiabian Road Nanjing Economic andTechnological Development Zone Nanjing, Jiangsu
210033, China
Phone : +86-25-8571-2212

Research and Development Center
NTN China Technical Center
No.6 building No. 1666 Nanle Road, Songjiang Industrial
Zone, Songjiang, Shanghai 201611, China

NTN Group Investment Holdings
As of March 31, 2012

Paid-in
CapitalConsolidated Subsidiaries

Holding as
percentage (%)

Consolidated Subsidiaries¥480,000,000¥1,000,000,000¥100,000,000¥400,000,000¥450,000,000¥450,000,000¥450,000,000¥3,000,000,000¥266,000,000¥725,000,000¥1,500,000,000¥1,250,000,000¥800,000,000¥425,000,000
US.$131,120,000
US.$24,700,000
US.$54,580,000
US.$24,330,000
US.$67,000,000
US.$16,000,000
US.$15,000,000
US.$20,000,000

100
100
100
100
100
100
100
100
97.4
80
100
100
10
10
100
100
100
100
100
100
60
62.5

(100)
(100)
(100)
(100)
(100)
(60)
(62.5)

EURO18,500,000
EURO1,500,000
EURO50,000
STG.£2,600,000
EURO76,531,592

100
100
75
100
100

TUNG PEI INDUSTRIAL CO., LTD. ........... NT.$1,257,232,620
TAIWAY LTD. ............................................
NT.$160,000,000
UNIDRIVE PTY. LTD. .................................
A.$5,000,000
BEIJING NTN-SEOHANDRIVESHAFT CO., LTD. .........................
US.$6,000,000
ASAHI FORGE OF AMERICA CORP. ........
US.$7,100,000
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. ............... WON71,200,000,000
NTN-DONGPAI (Shanghai) Bearing
Sales Corp. .............................................
US.$1,460,000(30)(0.04)

EURO9,000,000 100(100)

TRY12,000,000 100

(1)

82.3
100
100
100

(0.969)(99.999)

99.999 (99.999)
80(0.02)
93.333 (0.003)
100
(0.1)
60
(60)
100
100
(100)
100
95

(19.16)

60

(12)

100
50
100

(50)
(80)

Affiliated Companies Accounted for by the Equity Method

CAN.$20,100,000 100
US.$700,000 100
BRL35,420,000 100
EURO14,500,000 100

Holding as
percentage (%)

NTN-SNR ROULEMENTS ........................
EURO11,359,542
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
NTPT CO., LTD. ....................................... BAHT175,000,000
NTN NEI Manufacturing India Private LTD. ... INR1,875,000,000
NTN BEARING INDIA PRIVATE LIMITED ...
INR300,000,000
NTN BEARING-MALAYSIA SDN.BHD. ......
M.$10,000,000
NTN KOREA CO., LTD. ............................
WON500,000,000
PT. NTN BEARING INDONESIA ................
US.$7,300,000
NTN (CHINA) INVESTMENTCORPORATION ......................................
US.$176,000,000
SHANGHAI NTN CORP. ...........................
US.$136,600,000
GUANGZHOU NTN-YULONDRIVETRAIN CO., LTD. ..........................
US.$12,500,000
CHANGZHOU NTN-GUANGYANG
CORP. ....................................................
US.$28,440,000
NTN-LYC (Luoyang) Bearing Corporation...
US.$73,800,000
Nanjing NTN Corporation ..........................
US.$120,000,000

Consolidated Subsidiaries
NTN BEARING SERVICE CO., LTD. ..........
NTN KONGO CORP. ................................
NTN ENGINEERING PLASTICS CORP. ....
NTN POWDER METAL CORP. ..................
NTN MIKUMO COMPANY LTD. ................
NTN CASTING CORP. ..............................
NTN KINAN CORP. ...................................
NTN MIE CORP. .......................................
NTN OMAEZAKI CORP. ............................
NTN KAMIINA CORP. ...............................
NTN FUKUROI CORP. ..............................
NTN HOUDATSUSHIMIZU CORP. ............
NTN AKAIWA CORP. ................................
NTN NOTO CORP. ...................................
NTN USA CORP. ......................................
NTN BEARING CORP.OF AMERICA .........
NTN DRIVESHAFT, INC. ...........................
AMERICAN NTN BEARING MFG.CORP. ..
NTN-BOWER CORP. ................................
NTN-BCA CORP. ......................................
NTK PRECISION AXLE CORP. ..................
NTA PRECISION AXLE CORP. ..................
NTN BEARING CORP.OF
CANADA LTD. ........................................
NTN SUDAMERICANA, S.A. .....................
NTN do Brasil Producão de
Semi-Eixos Ltda. ....................................
NTN WÄLZLAGER (EUROPA) G.m.b.H. ....
NTN KUGELLAGERFABRIK(DEUTSCHLAND) G.m.b.H. ....................
NTE Gardelegen G.m.b.H. ........................
IFA-Antriebstechnik G.m.b.H. ...................
NTN BEARINGS (UK) LTD. .......................
NTN Transmissions Europe .......................
NTN TRANSMISSINONS EUROPE
CREZANCY ............................................
NTN MANiSA OTOMOTiV
LiMiTED Ş iRKETi ....................................

Paid-in
Capital

27.35
36.25
40
40
28.2
49

(6.67)(28.2)

40
49

(40)

25

(25)

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

Investor Information
As of March 31, 2012

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

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

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, 2012)
Authorized 1,800,000,000 shares
Issued and outstanding 532,463,527 shares

Number of Shareholders (As of March 31, 2012)

Shareholders by Category
Foreign Owners 17.14%

Financial Instruments Firms 2.83%

Individuals
15.85%

Financial Institutions
49.13%

Other Corporations
15.05%

Tokyo Stock Price Range
Stock Price (Yen)

Nikkei Stock Average (Yen)500

15,000250

10,00028,482

Transfer Agent for Common Stock0

Mitsubishi UFJ Trust Banking Corporation
4-5, 1-chome, Marunouchi, Chiyoda-ku,
Tokyo 100-8212, JapanHigh

Stock Exchange Listings
Independent Accountants
Ernst & Young ShinNihon LLC

General Meeting of Shareholders
The General Meeting of Shareholders washeld on June 26, 2012 in Osaka

Stock Price Range in the Fiscal Year Ended
March 31, 2012
High: ¥495
Low: ¥276

Low

Closing
Opening

Opening
Closing

5,000

Nikkei stock average
Company and Investor
Information

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

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
10
11
12

Monthly Volume Traded (Million Shares)
120
80
40
0

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3
10
11
12

88

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

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