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Financial Information:
Annual Report 2005
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Management’s
Discussion and Analysis of
Business Results and Financial Position |
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(4) Key Issues and Forthcoming Policies
Last year, NSK adopted the “company with committees”
system of corporate governance in its quest to improve
management soundness and transparency. At the same
time, the Company worked to enhance Group management
capabilities and placed greater emphasis on the
profitability of its business operations.
One priority issue for NSK is the vision outlined in its
three-year mid-term business plan drafted in 2003, of “becoming a world
leader in technology and QCDS
(quality, cost, delivery, and service) and becoming No. 1
in customer satisfaction.” To realize this vision, NSK is
exploring ways to develop growth strategies that will raise profitability,
while adding the structural enhancements
required to put the Company on a sounder financial
footing. In terms of growth strategies, NSK will
continue to aggressively funnel capital expenditures into
fields offering high earnings and growth potential. In
Industrial Machinery Bearings, fiscal 2005 will see investment
aimed at augmenting production capacity at the
Fujisawa Plant in Japan and other sites. In Automotive
Products, meanwhile, investment will center on adding
production capacity for needle roller bearings for automotive
applications at the Haruna Plant in Japan operated
by NSK Needle Bearing Ltd. and Changshu NSK
Needle Bearing Co., Ltd. in China. Plans also call for
boosting production capacity for EPS systems at NSK
Steering Systems Co., Ltd. in Japan, as well as at NSK
Steering Systems Europe (Polska) Sp. z o. o. in Poland.
In order to create the technologies that will support
growth, NSK is taking a market-oriented approach to technology
development. This will entail fusing the NSK Group’s
fundamental technologies, including its expertise in tribology
(friction control technology), and its mechatronics
technologies, together with fast-evolving, cutting-edge
technologies, in a push to develop high-performance
products and new products that offer innovative functions.
Regarding structural enhancements, NSK has embarked
on a company-wide production innovation program
encompassing all sales, technology and
administrative units, and is developing production
equipment based on creative new concepts, as well as
creating a development and production-planning system
built on its comprehensive production know-how.
In addition to improved product quality, these and other
actions are enabling NSK to make sweeping improvements
in production and investment efficiency, as it
works to enhance the production capabilities that are
the foundation of NSK’s approach to Monotsukuri (Japanese
craftsmanship).
The environment represents another area where NSK
looks to hone its competitive edge. As developments
such as the enforcement of the Kyoto Protocol and
tougher restrictions on harmful chemical substances
particularly in Europe illustrate, calls to reduce environmental
impact are steadily growing. In this climate, NSK
will extend its range of environmentally friendly products
vital to improving the energy efficiency of its customers’
products, and will look to manufacture products compatible
with stricter regulations for chemical substances
in Europe ahead of their enforcement. NSK will also take
steps to boost its level of environmental management.
By accurately disclosing this information to the public,
NSK is determined to forge a relationship of trust with its
diverse stakeholders.
In addition to the Risk Management Committee, the
NSK Group moved last year to upgrade its internal control
functions and bolster risk management by establishing
the Internal Audit Office and the Compliance
Division-Headquarters. These steps were taken to minimize
potential hazards and risks, as well as to provide
damage control in the event these risks materialize. The
Internal Audit Office audits the status of internal control
systems, proposing improvements and offering related
guidance based on audit results. The Compliance
Division-Headquarters, meanwhile, is responsible for
ensuring legal and regulatory compliance, along with
strict observance of corporate ethical standards.
In this way, the NSK Group stands united in a determined
effort to realize its medium-term vision and
enhance its corporate value.
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