2019

F i n a n c i a l

R e v i e w

Year ended March 31,2019

I M a n a g eme nt M e ssag e
Mitsuboshi Belting Ltd. was established in 1919 as a manufacturer ofindustrial belts and through untiring efforts, has become one of theleading companies in the belt industry.
Now our products include waterproofing and water shielding sheets andengineering plastics, but we have always adhered to the motto, “produce
quality and sell quality” and to earn the trust of customers. Mitsuboshi’s
high-quality products are essential to daily life as well as progress of theindustry.
We have always maintained strict quality assurance and both domestic
and overseas factories are obtaining ISO 9001 or IATF 16949, which isconsidered to be the most stringent international standard for quality
management systems. Our main domestic factories and several otheroverseas factories have been certified by ISO14001, and we are actively
engaged in development of environmentally-friendly products.

President

Hajime Kakiuchi

With the basic management policy, “to contribute to society by supplying
goods of high performance, high precision and high quality” and thecorporate philosophy, “to give attentive consideration to both humanity
and nature”, we strive for the prosperous future of the society.

Board of Directors
President

Hajime Kakiuchi

Board of Corporate
Auditors

President, Executive Officer

Hajime Kakiuchi

Managing Executive Officer

Executive Officer

Corporate Auditor(standing)

Senior Managing
Executive Officer

Managing Executive Officer

Executive Officer

Managing Executive Officer

Executive Officer

Managing Executive Officer

Executive Officer

Managing Executive Officer

Executive Officer
Executive Officer

Member of the Board

Masaharu Kurono

Member of the Board

Corporate Auditor

Masayoshi Nakajima

Yoshio Okushima

Member of the Board

Corporate Auditor

Yoshio Yamaguchi

Takashi Katayama

Masayuki Hashimoto

Member of the Board

Corporate Auditor

Hiroshi Ikeda

Executive Officers

Yoshio Yamaguchi
Senior Managing
Executive Officer

Masayoshi Nakajima
Vice-Senior Managing
Executive Officer

Shinya Okuda

Takashi Katayama

Takashi Sasaki

Kenkichi Masuda
Keiji Mataba

Shinji Kuramoto

Toru Shimomura

Director, Member of the Board

Managing Executive Officer

Executive Officer

Director, Member of the Board

Managing Executive Officer

Executive Officer

Managing Executive Officer

Executive Officer

Takashi Usami

Hiroshi Ikeda

Ryuzo Miyao

Norio Kumano

Takeshi Hamura

Tatsuo Ito

Kazuhiro Takeda
Toshimichi Takada
Naotsugu Morita
Akihiro Nagata
Nobuyasu Nishikawa
Isao Ideguchi

Toshimi Kumazaki(June 27, 2019)

Kazutoshi Ishida

Contents

1

Management Message ����������

1

Financial Highlights������������

2

News Release ��������������

4

Global Network  �������������

5

Business Overview ������������

7

Consolidated Balance Sheets �������

11

Consolidated Statements of Income ����13

Consolidated Statements ofComprehensive Income����������

14

Consolidated Statements ofShareholders' Equity �����������

15

Consolidated Statements of Cash Flows���16

Notes To Consolidated Financial Statements�

17

Investor Information �����������

18

I F in a n cia l H ig h l ig h t s
Years ended March 31

Millions of yen

2019

2018

2017

2016

2015

Power Transmission Belts(Japan)¥28,395¥28,037¥26,908¥26,536¥27,268

Power Transmission Belts(except Japan)

32,917

31,97429,49930,87629,355

Sales Business Segment :Building & Construction Materials

5,978

4,854

5,345

5,162

5,417

Others

4,710

4,727

4,642

4,486

4,210

Total

72,002

69,594

66,396

67,062

66,251

46.1%

46.5%

45.1%

46.5%

45.0%

Cost of sales¥49,510¥47,182¥44,649¥45,859¥45,828

Selling, general and administrative

14,364

13,982

13,468

13,572

13,289Operating income

8,127

8,429

8,278

7,630

7,133

Income before income taxes

8,876

8,921

9,406

7,788

8,344

Income attributable to owners of parent

6,157

6,252

6,663

5,691

6,146

102,81495,802

89,91287,27886,073¥203.50¥206.65¥216.29¥176.71¥190.28

Exports sales ratio

Total assets
Per share data (in yen)
Net income
Cash dividends

60.00

50.00

44.00

36.00

40.00

2,393.66

2,258.96

2,086.40

1,893.06

1,870.34

Gross profit margin

31.2%

32.2%

32.8%

31.6%

29.6%

Operating income margin

11.2%

12.1%

12.5%

11.4%

10.8%
281.70%Book value

347.80%326.80%318.20%308.40%Capital expenditures

Current ratio¥3,259¥3,239¥3,375¥2,436¥2,076

Depreciation expense¥3,012¥2,999¥2,839¥3,092¥3,091Equity ratio

70.4%

71.3%

70.2%

68.5%

70.2%

Long-term debt ratio against equity

14.8%

12.2%

13.6%

16.0%

12.8%

Number of shares outstanding (thousands)

32,60465,20865,20868,20868,208

Note: Income statement and balance sheet figure for the periods ended March 31, 2019, 2018, 2017, 2016, and 2015 were audited by Accounting Auditors and which are different
from ones disclosed in Tokyo Stock Exchange in consideration of expected readers.
・As stated in "Change in Accounting Policies," the change was applied retrospectively following the revision of ASBJ Statement No. 28
Partial Amendments to Accounting Standard for Tax Effect Accounting (February 16, 2018).
・The Company performed a two-for-one share consolidation effective as of October 1, 2018.
Net assets per share and net income per share are calculated on the assumption that the share consolidation was performed at April 1, 2014.

Consolidated Statements of Income（Japanese Yen）
Net Sales

Operating income

Ordinary income

72,002mil

8,127mil

8,945milSales by Business
Building &Construction Materials
5,978milProfit attributableto owners of parent

6,157milOperating income by Business
Building &Construction Materials
247milOthers4,710mil

6.6％

Power Transmission
Belts(Japan)
28,395mil

8.3％

31.1％

39.4％
45.7％

Others

2.3％ 1.6％ 179mil

Power Transmission
Belts(except Japan)
3,411mil

65.0％Power Transmission
Belts(Japan)
7,139milPower Transmission
Belts(except Japan)
32,917mil

Total Sales

72,002 mil

Operating income(before adjustment deduction)

10,977 mil

2

I F in a n cia l H ig h l ig h t s
Net Sales

Operating income
Operating income
Operating margin

3.5% increase

from the previous year

（Million Yen）
80,00060,00066,251

67,062

66,396

69,594

3.6% decrease
from the previous year

（Million Yen）
9,000

72,0027,133
6,000

10.8

40,000

7,630
11.4

8,278

8,429

12.5

12.1

8,127
11.3

3,000

20,000
0

2015

2016

2017

2018

Ordinary income

2015

2016

2017

1.6% increase（Million Yen）
9,000

8,217

7,788

8,487

8,808

8,945

3,000

3,000

2016

2017

2018

from the previous year

（Million Yen）
9,000

6,000

2015

2019

1.5% decrease

6,000

0

2018

Income attributable to owners of parent
from the previous year

6,146

0

2019

Total assets & Equity ratio

2015

5,691

2016

6,663

6,252

6,157

2017

2018

2019

63,136

68,348

2017

2018

2019

206.65203.5020182019

Total net assets

Total assets
Equity ratio（Million Yen）
100,000

80,000

86,07387,27870.2

89,912

95,802

102,814

71.3

70.4

2015

2016

（Million Yen）
90,00070

60,00060

30,0000060,41459,750

2015

2016

70.2

68.5

60,000

0

（％）
80

2017

2018

2019

Cash dividends & Payout ratio

72,419EPS(Earnings Per Share)

Cash dividends
Payout ratio
（Yen）
90

60

21.0

20.4

40

36

30

20.3
44

24.2
50

29.5
60

（％）
30

（Yen）
250
200

20

10

190.28216.29176.71

150
100
50

0

2015

2016

2017

2018

2019

（％）
12

（％）
12

7.5

6

6.6

7.5

6.7

6.2

3
0

3

0

2015

2016

2017

ROE(Return On Equity)

ROA(Return On Assets)

9

0

11.1

9

9.5

10.8

9.5

8.7

6
3

2015

2016

2017

2018

2019

0

10

5

0

2019

（％）
15

2015

2016

2017

2018

2019

0

I Ne w s R e le a s e

MITSUBOSHI 100th Anniversary〈The 16th World Distributors Meeting〉〈MITSUBOSHI 100th Anniversary Ceremony〉〈MITSUBOSHI 100th Anniversary Ceremony〉

Mitsuboshi Belting Ltd. celebrates its 100th anniversary in 2019.
26-July

The 16th World Distributor's Meeting

27-July

Sightseeing in Kyoto and Himeji

28-July

Tanabata Festival〈Tanabata Festival〉

4

I G lo b a l N e t w o r k

MBL (USA) CORPORATION

Mitsuboshi Belting Ltd.

MBL Antriebstechnik Deutschland GmbHMITSUBOSHI POLAND Sp.z o.o.

MBL SHANGHAI INTERNATIONAL
TRADING CO., LTD.

SUZHOU MITSUBOSHI BELTING CO., LTD.

MBL Antriebstechnik Deutschland
GmbH

MITSUBOSHI BELTING-INDIA
PRIVATE LIMITEDMITSUBOSHI OVERSEAS
HEADQUARTERS PRIVATELIMITEDMITSUBOSHI POLAND Sp.z o.o.
P.T. Mitsuboshi Belting Indonesia

P.T. SEIWA INDONESIA

MITSUBOSHI BELTING-INDIA PRIVATELIMITED

5

MITSUBOSHI OVERSEAS HEADQUARTERS
PRIVATE LIMITED

P.T. SEIWA INDONESIAMBL SHANGHAI INTERNATIONAL
TRADING CO., LTD.

SUZHOU MITSUBOSHI BELTING CO., LTD.

MBL（USA) CORPORATION

Mitsuboshi Belting Ltd.
（Kobe Head Office）

MOI TECH
HONG KONG LIMITED

Mitsuboshi Belting Ltd.
（Tokyo Head Office）

MOI TECH HONG KONG LIMITEDMITSUBOSHI BELTING VIETNAM CO., LTD.

STARS TECHNOLOGIES INDUSTRIAL LIMITED…Plant & Sales Office…Plant…Sales office
MITSUBOSHI BELTING
VIETNAM CO., LTD.

P.T. Mitsuboshi Belting Indonesia

STARS TECHNOLOGIESINDUSTRIAL LIMITED6

I B u sin e s s O v e r v ie w

1. Summary of Business Results(1) Business Results(2) Condition of Cash Flow

In this fiscal year, Japanese economy showed gradual recovery because of

Cash flow from operating activities achieved an income of 8,765 million yen,increasing in capital investment and employment situation improvement

which was an decrease of 544 million yen over the previous fiscal year.

assosiated with strong domestic corporate profits continuing from the

Major factors for this decrease were a decrease of 809 million yen in changes in

beginning of the year.

other current liabilities compared to the previous fiscal year.

In addition, the global economy also continued to expand on the whole,

Cash flow from investing activities resulted in expenditure of 7,876 million yen,particularly in the U.S. However, in the second half of this year, the global

which was an decrease of 4,317 million yen over the previous fiscal year.

economy has modulated due to effect of US-China trade friction and China's

Major factor was an increase of 2,995 million yen in payments for time deposits

economic slowdown etc.

compared to the previous fiscal year.

As a result of these effects, the domestic economy is gradually decelerating, andCash flow from financing activities resulted in expenditure of 1,384 million yen,

the outlook remains uncertain.

which was an increase of 3,916 million yen compared with the previous fiscal

Under these circumstances, Mitsuboshi Belting Ltd. (the “Company”) and its

year.

consolidated subsidiaries (together with “the Group”) have been reinforcing

Major factors for this increase were a 3,900 million yen increase in proceeds

sales operation promoting and the manufacturing system, and working tofrom long-term debt compared to the previous fiscal year.

improve business efficiency and to attain further cost reduction.

Addition the effect of exchange rate change on cash and cash equivalents of 301

As a result, for this fiscal year, the Group recorded the consolidated net sales

million yen from the total amount of cash flows through operating, investingof 72,002 million yen (3.5% increase compared to the previous fiscal year), theand financing activities, resulting in an increase of cash and cash equivalents ofoperating income of 8,127 million yen (3.6% decrease compared to the previous¥ 2,576 million It became a circle. In addition, ａs a result of adding the opening

fiscal year), the ordinary income of 8,945million yen (1.6% increase comparedbalance of 28,074 million yen to this, the balance of cash and cash equivalents atto the previous fiscal year) and the income attributable to owners of parent was

the end of this fiscal year was 30,650 million yen.

6,157 million yen (1.5% decrease compared to the previous fiscal year).
The situation by business is as follows.

Power Transmission Belts
Sales and Operating Income（Japan）

year, but sales for aftermarket decrease due to decline in a belt replacement demand for car

30,000Million Yen(Income)
7,500

9

7,

31

I

Million Yen(Sales)I

In automotive belts, sales for belt installed car production line were similar to the previous fiscal

3●Business of Power Transmission Belts（Japan）

7,
95
,3

Million Yen(Sales)

41
1
3,
91
32
,

3,000

2,500

I

32,000I

As a result, the consolidated net sales by this segment stood at 32,917 million yen (2.9% increase

31
,9
74

Sales of belts for OA equipment decreased due to sales for Japanese users decreased.

I

33,000I

aftermarket belts and acquisition of new orders, etc. in Asia so that overall sales increased.

3,500

7

In industrial belts, although the demand for aftermarket decreased in Europe, sales expansion forI

34,0004,000

3435,000Million Yen(Income)I

Also in Asia, sales increased due to strong demand of belts for motorcycles in Southeast Asia.

Power Transmission Belts
Global Sales and Operating Income（except Japan）

I

And, in the Europe, sales increased due to obtain the new demands in the automobile market.

5,000■ Operating IncomeIthoughout the period, as well as sales expansion in the automobile aftermarket.

2019

3,
4

In the U.S, sales of automotive belts increased due to strong sales of belts for motorcycles

28

28
,0
37

■ Total Sales

stood at 7,139 million yen (2.4% decrease compared to the previous fiscal year).

●Global Business（except Japan）of Power Transmission Belts

2018

I

25,0005,500

I

compared to the previous fiscal year) while the consolidated operating income by this segment

6,000

I

As a result, the consolidated net sales by this segment stood at 28,395 million yen (1.3% increase

26,000I

corporate capital investment.

Iremained strong, and sales of engineering plastics also increased due to increased demand from27,000I

On the other hand, sales of conveyor belts for the food industry and the logistics industry

6,500

I

markets released by users.

28,0007,000

IAnd sales of belts for OA equipment dropped due to the impact of fewer models for Chinese

29,000I

since the second half of this year.

I

In industrial belts, sales decreased slightly because of the decline productions of main users etc.

13

inspection, so overall sales decrease.

compared to the previous fiscal year) while the consolidated operating income by this segment
2,000

I

2018
■ Total Sales

2019■ Operating Income

1,500

I

30,000I

731,000I

stood at 3,411 million yen (0.7% decrease compared to the previous fiscal year).

2. Research and Development Activities
The management principle of the Group is; “To contribute to society by

3. S ummary of Investment in Plant andEquipment

supplying goods of high performance, high precision and high quality”. Under

Regarding with capital investment, in order to construct the supply system that

this management principle we are strenuously making efforts to further improvecan meet the user needs, we invested total 3,259 million yen to the capital, forfundamental technologies and to positively use simulation technologies for

instance expanding the manufacturing facilities of belt, increase test facilities

luidity analysis, impact analysis and stress analysis so that we may cope withand renew the domestic and foreign aging facilities.

customers' demand which is diverse and changeable in a timely manner.

In addition, long-term debt of 3,900 million yen was provided as equipment

At the same time, we are performing overall research and development

funds.

activities including studies of materials, facilities, construction methods, analysis
methods, etc. with the aim of realizing the reduction of environmental loads,
high productivity and the development of high performance, high precision andhigh quality products as declared in the company management principle.
At present, research and development are promoted by R&D and Research &Designing sections in our operating divisions in cooperation with Development
Department of each group company. Besides, we are pursuing joint researchwith universities and public research institutes as well as joint developmentwith other companies under a close tie-up and cooperation, for the purpose ofcarrying out research effectively and developing a cutting edge technology.
The total R&D expenses of all our group companies for this fiscal year was 2,857
million yen.
The total R&D expenses included the basic research expenses of 840 million yen
not allocatable to each division, for Silver nanoparticles paste, Coatings & inks forglass, Surface treatments for glass, Conductive copper paste, Thick film copper
circuit boards, etc.

Building & Construction Materials
Sales and Operating Income
97
5,

500

4,

85
4

I

3,000

I

400

I

300

24

7

I

engineering sector.

4,000

I

construction sector, and mainly for large-scale projects such as waste disposal sites in civil

5,000

I

Sales increased as a result of a increase in demand for public and private renovation work in

6,000

I

●Business of Building & Construction Materials

Million Yen(Income)8

Million Yen(Sales)As a result, the consolidated net sales by this segment stood at 5,978 million yen (23.2% increase

I

12
5

2018
■ Total Sales

2019

0

I

0

I

I

100

1,000

I

stood at 247 million yen (97.8% increase compared to the previous fiscal year).

200

2,000

I

compared to the previous fiscal year) while the consolidated operating income by this segment■ Operating Income

OthersSales and Operating Income
4,
71
0

4,

17
9

6
18

I

200

I

150

2,000

I
100

I

segment stood at 179 million yen (3.6% decrease compared to the previous fiscal year).

3,000

I

decrease compared to the previous fiscal year) while the consolidated operating income by this250

I

nanoparticles machinery and equipment and purchased products, etc.
As a result, the consolidated net sales by other businesses stood at 4,710 million yen (0.4%

I

4,000

300

I

Other businesses include the supply of engineering structural foams, developed metal

5,000

I

●Other Businesses

Million Yen(Income)72
7

Million Yen(Sales)

I

0

I

50

I

1,000

■ Total Sales

2019■ Operating Income

0

I

2018

8

I B u sin e s s O v e r v ie w

4. Risks to the Businesspossibility that a rapid rise in market price of major raw materials could

Listed below are the various risks that could affect investor's decision withraw materials from overseas and supply of raw materials to overseas affiliatedregard to the article of the business and financial conditions described incompanies could be interfered by export/import restrictions, etc.

financial statements.

Therefore, in the case that the Company is not able to flexibly procure raw

Note that matters pertaining to the future presented herein are determined bymaterials or procurement costs continue to rise extremely, it may have a

us as of the end of fiscal year.

significant negative impact on our performance.

(1) Economic Status(5) Exchange Rate Fluctuation

The Group develops, manufactures and provides functional components

The Group manufactures and sells its products mainly in Japan, Asia, USA andprincipally in the automobile, general engineering, IT and construction

Europe, etc. Exchange rate fluctuations may have a strong influence on

industries. Our main markets are Japan, Asia, USA, and Europe, etc. The changetransactions denominated in foreign currencies involving export in each area

in demand from various industries and the economic status around the world

and foreign assets and liabilities such as deposit, account receivable and loans.

could affect us adversely.

When preparing our consolidated financial statements, exchange rates used to

The Group distributes our main products, power transmission belts, to theconvert into Japanese Yen have a influence on its value denominated inindustries above. Low demand or a reduction in equipment investment in each

Japanese Yen even with no fluctuation of value on its reporting currency basis.

company could cause our market to shrink and have a detrimental impact on

Appreciation of the yen against other currencies, especially the U.S. dollars andour performance as well.

Euro having a large impact on our groups, could damage our performance.

Approximately 75% of power transmission belts sold by our company are

The Group has taken as many effective measures to reduce or avoid the

manufactured in other countries. As we are expected to be more dependent on

exchange risks as possible. Nonetheless, as there are not few cases that would

overseas manufacturing in the future due to growing global economy, a

not be cleared in the short term, it causes a negative effect on performance andsluggish global economy could negatively affect our operating performance.

a decrease in asset value potentially.

skyrocket manufacturing costs. Moreover, stable and efficient procurement ofWar, terror, riots, disaster like earthquake, epidemic could strike a sharp blow on
economy. Slowdown in demand could be expected during the event. Our
problem is that the Company may have difficulty procuring materials andproducts to customers. To reinforce our product material supply system, we(6) O fficial Restrictions on Businesses in Japan andOverseas

have taken several countermeasures. However, there is no guarantee that all

In the countries where our businesses operate, the Group is exposed to a variety

risks are eliminated.

of regulations on import / export controls, custom duty, and business

Therefore, the domestic and international economic situation and industry

investment, etc. Also our activities should be restricted legally by antimonopoly

trend may have a significant negative impact on our performance and financial

laws, patent rights, tax, and the environmental regulation including waste

position.

disposal and recycling. If our business activities are not able to accommodate
quickly and flexibly to these business environments, it would rise costs and(2) Price Competitioncompel us to retreat from overseas businesses. Obviously it could have aadverse effect on our financial performance.

Market competition in our main business areas such as automobile, generalengineering, IT and construction industries is getting extremely severe.
A demands for competitive price and high value-added products from our(7) Product Quality

customers is getting harsh. We have reinforced and enhanced our research andIn order to maintain and improve the product quality of the Group, we havedevelopment systems as well as our technical expertise with the aim ofestablished a strict standards based on customer demand standards and ourproviding high performance, high precision, and high quality products. We havegroup standards. However, in the case that any defective products are found or

also been making our efforts to strengthen production and sales constantly

customer complaints are received, the Group enrolled in insurance to minimize

towards supply of our product worldwide.

losses on our group companies.

However, despite our untiring effort on such activities, deteriorating

Nevertheless, any expense which is not covered by any available insurancecompetitiveness could have adverse effect on our performance.

could adversely affect business results or the financial position of the Group.

(3) Impact on Automobile Industry(8) Risks from Natural Disasters

The degree of dependence on sales of automobile industry exceeds 40%.

Our production bases could be subject to a catastrophic loss caused by natural

Although the Company does not belong to any members of car makers,

disasters such as earthquakes and floods. In the event of natural disasters, theunmanageable factors, such as a economy slump in automobile industries, poor

Company would suffer from a stable supply to our customers and a temporaryclient business results, damages caused by large-scale natural disasters, andmassive burden of expense arising from a drop in sales and incurred forchanges in component procurement policy could have a knock-on effect at us

restoration.

as well.

In preparation for such disasters, we are working to strengthen and enhance our

Although the Company have engaged in managerial improvement in order tosystem by establishing a production system in Japan and overseas including

maintain customer satisfaction for all clients including those in the automobile

back-up to overseas production bases, as well as examining risks for delivery ofindustry, such changes may adversely affect our performance.

products etc through the Risk Management Committee activities.
In spite of these efforts, however, there is a possibility that a temporary

9(4) Material Procurement

suspension of operation, delayed delivery and a huge amount of expenses

Our production sites need a variety of materials such as rubber, fabric, glass fiber

Moreover, it is possible that our business results are adversely influenced byand resin which are essential for product manufacturing. We procure thesedrop in sales if a major client should suffer from a catastrophic damage or facematerials from diverse suppliers considering a stability, price and quality.

production suspension/restriction because of a broken supply chain, etc.

However, in a phase of a soaring resource price including crude oil, there is a

without any damage on our group's production sites by a natural disaster.

incurred for restoration occur. It may adversely affect our business results.

5. Corporate Governance(1) Basic Stance on Corporate Governance(2) Overview of the Corporate Governance System

The Company considers corporate governance one of its topmost management

The Company has in place a Board of Directors comprising seven members, ofpriorities, in order to secure the trust of its shareholders and fulfill its corporate

whom two are outside directors, and a Board of Corporate Auditors. This boardsocial responsibilities.

has four members, of whom two are outside corporate auditors.

In accordance with this basic philosophy, the Company strives to enhance its
business productivity in prompt and flexible response to the changes in the

The Board of Directors meets monthly to make decisions on important items

business environment and the market, and for maintenance, the Company

and supervise the execution of operations by directors.

addresses strengthening of supervisory function to management and theinternal control in order to maintain and enhance its management efficiency

The Company employs an executive officer system.

and transparency, and, thereby, enhance its corporate governance in
By separating the functions of management decision-making and supervisionaccordance with the following Basic Policy.

from operational execution, the Company aims to strengthen its operational
execution structure and bolster management efficiency.

[Basic Policy]
1. T he Company strives to respect its shareholders’ rights and secure its
shareholders’ equality.
2. The Company strives to respect its shareholders’ rights and positions, andwork properly in harmony with its stakeholders (shareholders, customers,
employees, communities and so on).
3. T he Company strives to disclose its corporate information timely andproperty, and, thereby, secure transparency and fairness.
4. The Company strives to cause its board of directors meeting and so on fulfill
properly the functions and the responsibility, in light of its fiduciary
responsibility and accountability to its shareholders.
5. The Company strives to have constructive dialogues with its shareholders.

Governance Structure
General Meeting of Shareholders
Appointment,
removalBoard of Corporate Auditors（7 directors, including
two outside directors）（four corporate auditors, including
two outside corporate auditors）

ReportCooperation

Accounting auditor

Auditing

Board of Directors

Appointment,
removal

Accounting audits
Management,
supervision

Auditing

Representative directors
ReportingManagement Council
Risk Management
Committee
Compliance Committee
CSR Promotion
Committee

Cooperation

Instructions

Cooperation

Product Development
Council
Quality Assurance
CouncilAudit department（Internal Control System
Management Office）

Accounting audits

Health, Safety andEnvironment Council
Technology Committee（Ernst & Young ShinNihon LLC）

Appointment,
removalInternal audits

Executive officers/business departments, Group companies

10

I C o n s ol id a t e d B a l a n c e S h e e t s

Years ended March 31

ASSETS

Millions of yen

Thousands of U.S.dollers

2019

2018

2019

2018

Cash on hand and in banks¥34,789¥28,958$313,448$260,910

Trade notes and accounts receivable

15,43315,001

139,053

135,160

Merchandise and finished goods

12,812

11,769115,433

106,037

Work in process

1,809

1,752

16,30015,791

Raw materials and supplies

2,928

2,629

26,38523,690

Other

726

729

6,544

6,568

Allowance for doubtful accounts

(107)

(124)

(972)

(1,119)68,39160,715616,193547,038

Investment securities

10,424

12,25593,923

110,420

Deffered tax assets

1,047

1,106

9,436

9,972

Other

328

313

2,960

2,823

Allowance for doubtful accounts

(9)

(9)

(81)

(81)

11,791

13,666106,239

123,134

Buildings and structures

21,84921,491

196,863

193,632

Machinery, equipment and vehicles

47,32245,281

426,366

407,978

Tools, furniture and fixtures

14,65914,237132,077

128,274

Land

4,268

4,254

38,45438,333

Construction in progress

1,259

1,241

11,34911,185

Subtotal

89,35986,506805,112779,405

Accumulated depreciation(67,596)(65,154)(609,035)(587,027)

21,762

21,351

196,076

192,377

869

67

7,832

612

¥102,814¥95,802$926,343$863,162

Current assets

Total current assets
Investments and long-term receivable

Total investments and long-term receivables
Property, plant and equipment

Net property, plant and equipment
Intangible assets
Total assets

11Years ended March 31

LIABILITIES AND NET ASSETS

Millions of yen

Thousands of U.S.dollers (note 3)

2019

2018

2019

2018

Trade notes and accounts payable¥9,519¥8,694$85,765$78,335

Short-term loans payable

2,325

2,324

20,94920,941

Current portion of long-term loans payable

1,580

948

14,235

8,541

Accounts payable-other

1,954

2,537

17,61322,859

Income taxes payable

867

840

7,814

7,570

Provision for bonuses

819

788

7,383

7,106

2,598

2,694

23,40924,276

19,664

18,827

177,171

169,631

Long-term loan payable

4,420

2,100

39,82318,920

Deferred tax liabilities

3,735

3,941

33,65635,507

Net defined benefit liability

1,585

1,549

14,28913,963

Provision for directors' retirement benefits

24

28

221

254

Other

964

1,007

8,692

9,075

Total long-term liabilities

10,7308,626

96,682

77,721

Total liabilities

30,39527,453273,853

247,352

Common stock

8,150

8,150

73,43273,432

Capital surplus

2,111

2,111

19,02319,022Retained earnings

59,71355,129538,004

496,705

Treasury stock(3,320)(3,315)(29,919)(29,874)

Total shareholders' equity

66,65462,075600,540559,285

5,907

7,181

53,22164,705

Foreign currency translation adjustment

27

(585)

251

(5,271)Remeasurements of defined benefit plans

(169)

(323)

(1,524)(2,910)Total accumulated other comprehensive income

5,765

6,273

51,94856,523

Total net assets

72,41968,348652,489

615,809¥102,814¥95,802$926,343$863,162

Current liabilities

Other
Total current liabilities
Long-term liabilities

Shareholders' equity

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

Total liabilities and net assets

12

I C o n s ol id a t e d S t a t e m e n t s o f Inc om eYears ended March 31

Millions of yen

Thousands of U.S.dollers

2019

2018

2019

2018

Net sales¥72,002¥69,594$648,725$627,031

Cost of sales

49,51047,182446,076

425,105

Gross profit

22,492

22,411

202,649

201,926

Selling, general and administrative expenses

14,364

13,982

129,417

125,980

Operating income

8,127

8,429

73,23175,945Interest income

219

127

1,980

1,144

Dividends income

338

315

3,048

2,844

Foreign exchange gains

73

―

663

―

Other

453

304

4,087

2,740

1,085

746

9,780

6,730

Interest expenses

19

25

179

226

Foreign exchange losses

―

159

―

1,438

Loss on disposal of fixed assets

55

54

503

488

Sales discounts

53

53

483

481

Loss on valuation of derivatives

―

3

―

33

Other

138

71

1,244

647

Total operating expenses

267

367

2,410

3,315

8,945

8,808

80,601

79,360Gain on sales of fixed assets

―

182

―

1,645

Total extraordinary income

―

182

―

1,645

Impairment loss

69

68

626

620

Total extraordinary loss

69

68

626

620

Income before income taxes

8,876

8,921

79,97480,384

Income taxes-current

2,384

2,437

21,487

21,957

Income taxes-deferred

334

231

3,012

2,089

2,719

2,668

24,50024,046

Net income

6,157

6,252

55,47456,338

Income attributable to owners of parent¥6,157¥6,252$55,474$56,338

Non-operating income

Total non operating income
Non-operating expenses

Ordinary income
Extraordinary income

Extraordinary loss

Income taxes

Total income taxes

Per share of common stock

13

Yen

U.S.dollers

Net income¥203.50¥206.65

$1.83

$1.86

Cash dividends¥60.00¥50.00

$0.54

$0.45

I C o n s ol id a t e d S t a t e m e n t s o f C om pr e h e n si v e Inc om eYears ended March 31

Millions of yen

Thousands of U.S.dollers

2019

2018

2019

2018

¥6,157¥6,252$55,474$56,338(1,274)843(11,484)

7,597

Foreign currency translation adjustment

612

(383)

5,522

(3,454)Remeasurements of defined benefit plans

153

(37)

1,386

(336)

Total comprehensive income

(507)

422

(4,575)

3,806

Comprehensive income

5,649

6,675

50,89860,145

5,649

6,675

50,89860,145――――Net Income
Other comprehensive income
Valuation difference on available-for-sale securities(Details)
Comprehensive income attributable to owners of the parent
Comprehensive income attributable to non controlling interests

14

I C o n s ol id a t e d S t a t e m e n t s o f S h a r e h old e r s' E qu i t y

Years ended March 31
Current consolidated fiscal year (From April 1, 2018 to March 31, 2019)

Millions of Yen
Shareholders' equity

Balance at March 31, 2018

Accumulated other comprehensive income

Commonstock

CapitalSurplusRetainedearnings

Treasurystock
at cost¥8,150¥2,111¥55,129(¥3,315)

Total
Valuation
Foreign
Remeasurements
accumulated
Total share difference
currencyof defined benefit
otherholders'
on availabletranslationplanscomprehensive
equityfor-saleadjustment
incomesecurities¥62,075¥7,181(¥585)(¥323)¥6,273

Total net
assets¥68,348

Amount of changes during consolidated
accounting year
Dividends from retained earnings(1,573)(1,573)(1,573)

Profit attributable to owners of parent

6,157

6,157

6,157

(5)

(5)

(5)

0

0

0

Purchase of treasury stock
Retirement of treasury stock0

Net changes of items other thanshareholders' equity
Total amount of changes duringconsolidated accounting year
Balance at March 31, 2019―¥8,150(1,274)

612

153

(507)

(507)

4,578

(1,274)

612

153

(507)

4,071

¥2,111 ¥59,713 (¥3,320) ¥66,654¥5,907¥27(¥169)

0

4,583

(5)

Current consolidated fiscal year (From April 1, 2018 to March 31, 2019)

Thousands of U.S.dollers
Shareholders' equity

Balance at March 31, 2018

¥5,765 ¥72,419

Retainedearnings

Accumulated other comprehensive income

Treasurystock
at cost

Total
Valuation
Foreign
Remeasurements
accumulated
Total share difference
currencyof defined benefit
otherholders'
on availabletranslationplanscomprehensive
equityfor-saleadjustment
incomesecurities

Commonstock

CapitalSurplus$73,432$19,022 $496,705 ($29,874) $559,285$64,705($5,271)($2,910)

Total net
assets$56,523 $615,809

Amount of changes during consolidated
accounting year
Dividends from retained earnings(14,175)(14,175)(14,175)

Profit attributable to owners of parent

55,47455,47455,474

(45)

(45)

(45)

0

0

0

Purchase of treasury stock
Retirement of treasury stock0

Net changes of items other thanshareholders' equity
Total amount of changes duringconsolidated accounting year
Balance at March 31, 201915―
$73,432(11,484)

5,522

1,386

(4,575)(4,575)41,254(11,484)

5,522

1,386

(4,575)36,679$19,023 $538,004 ($29,919) $600,540$53,221$251($1,524)

0

41,299(45)$51,948 $652,489

I C o n s ol id a t e d S t a t e m e n t s o f C a s h F lo w s

Years ended March 31

Millions of yen

Thousands of U.S.dollers

2019

2018

2019

2018

Net income before taxes¥8,876¥8,921$79,974$80,384

Depreciation and amortization

3,012

2,999

27,13927,027

(15)

7

(143)

71

Operating activities:

Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in net defined benefit liability

158

182

1,426

1,643

Increase (decrease) in long-term accounts payable-other

(171)

(48)

(1,542)

(440)

(3)

1

(32)

14

Increase (decrease) in provision for directors' retirement benefits
Increase (decrease) in provision for bonuses

22

40

205

367

(558)

(442)

(5,029)(3,989)Interest expenses

19

25

179

226

Foreign exchange losses(gains)

(33)

65

(301)

588

Losses (Gains) on sales of property, plant and equipment

(29)

(183)

(269)

(1,650)

Disposal of property, plant and equipment

55

54

503

488

（0）

(39)

（0）

(354)

Interest and dividend income

Gains on sales of investment securities
Impairment loss
Decrease(increase) in trade notes and accounts receivable
Decrease(increase) in inventories

69

68

626

620

(464)

(519)

(4,189)(4,678)(1,045)(654)(9,420)(5,901)

Increase(decrease) in trade notes and accounts payable

773

890

6,971

8,020

Increase (decrease) in accrued consumption taxes

(25)

4

(232)

42

Decrease(increase) in other current assets

26

(250)

242

(2,253)

Increase(decrease) in other current liabilities

(80)

729

(725)

6,573

Other

－

3

－

3

10,586

11,857

95,384

106,834
3,989

Interest and dividends income received

558

442

5,029

Interest expenses paid

(19)

(25)

(179)

(230)

(2,359)(2,965)(21,256)(26,718)

8,765

9,309

78,977

83,876

Income taxes paid
Net cash and cash equivalents provided by (used in) operating activities
Investing activities:
Payments into time deposits(3,445)(450)(31,045)(4,055)

Proceeds from withdrawal of time deposits

270

657

2,437

5,924

Purchase of property, plant and equipment(3,891)(4,066)(35,061)(36,637)

Proceeds from sale of property, plant and equipment

15

203

136

1,832

Purchase of investment securities

(4)

(4)

(41)

(44)

Proceeds from sale of investment securities
Other
Net cash and cash equivalents provided by (used in) investing activities

0

67

0

606

(820)

33

(7,391)305(7,876)(3,559)(70,966)(32,068)

Financing activities:
Net increase (decrease) in short-term loans payable

1

(2)

13

(18)

Proceeds from long-term loans payable

3,900

－

35,138－

Repayment of long-term loans payable(948)(1,147)(8,541)(10,334)

(5)

(10)

(45)

(93)

(1,573)(1,452)(14,175)(13,086)

Purchase of treasury stock
Dividends paid
Other
Net cash and cash equivalents provided by (used in) financing activities

9

79

88

716

1,384

(2,532)

12,478(22,816)(2,339)

301

(259)

2,720

Net increase(decrease) cash and cash equivalents

2,576

2,958

23,21026,652

Cash and cash equivalents at beginning of period

28,074

25,116

252,946

226,294

Cash and cash equivalents at end of period¥30,650¥28,074$276,156$252,946

Effect of exchange rate change on cash and cash equivalent16

I No t e s To C o n s ol id a t e d F in a ncia l S t a t e m e n t s

1. Basis of Presenting Financial Statements
The accompanying consolidated financial statements of the Company
and its consolidated subsidiaries have been prepared in accordancewith the provisions set forth in Financial Instruments and Exchange Act
of Japan and on the basis of accounting principles and practices
generally accepted in Japan, which are different in certain respects as toapplication and disclosure requirements of the International Financial
Reporting Standards. As permitted by the Securities and Exchange Law
of Japan, each amount of the accompanying consolidated financial
statements is rounded down to the nearest one million yen.
As a result, the totals shown in the accompanying consolidated
financial statements (both in yen and in dollars) do not necessarily
agree with the sums of the individual amounts.

2. Summary of Significant Accounting Policies(7) Accounting method for retirement benefits(a) Periodic allocation method for estimated benefit obligation
Upon calculating the retirement obligations, the method of attributing
expected benefit to periods until the end of fiscal year is projected unit
credit.
(b) Amortization of actuarial gains and loss and past service cost
Past service is recognized in profit or loss by straight-line method over acertain period within the expected average remaining working lives of
employees (12- 15 years) in the year in which it arises.
Actuarial gain or loss is recognized in profit or loss by straight-line
method over a certain period within the expected average remaining
working lives of employees (12 - 15 years) from the next year in which itarises.

(1) Scope of consideration(a) Number of consolidated subsidiaries: 22 companies.
(b) Nonconsolidated subsidiaries: 1
The above is unconsolidated and does not apply equity method as it isa small-scale and none of its total assets, net sales, net income or loss,
retained earnings or other items have a significant impact on
consolidated financial statements.

(c) Application of simple method at small enterprises, etc.
Some domestic consolidated subsidiaries apply a simple method inwhich an estimated amount required to be paid for voluntary
retirement benefits is deemed as the retirement benefit obligations in
the calculations of net defined benefit liability and retirement benefit
expenses.

(2) Year-ends of consolidated subsidiaries
22 companies except for 2 companies located in China aligned thefiscal year with parent company (January - December fiscal yearchanged April-March fiscal year) and others prepare provisional
settlement of accounts so that consolidated financial statements is
prepared using financial statements at the same reporting date since
preceding fiscal year.

(8) Range of cash and cash equivalentsin the consolidated cash flow statement
Cash and cash equivalents include cash on hand, time deposit which
can be withdrawn on demand and highly liquid investments with amaturity of three months or less, which are readily to be convertible to
known amounts of cash which are subject to insignificant risk ofchanges in value.

(3) Evaluation of Investment securities
Marketable securities:
They are carried at cost moving-average method and revaluated at fairvalue with changes in unrealized holding gain or losses.
Non-marketable securities:
They are carried at cost moving-average method.

(9) Calculation method of Per Share of Common Stock
Net income per share is computed by dividing net income available tocommon shareholders by the weighted-average number of commonshares outstanding for the year.
Cash dividends per share presented in the consolidated of income are
dividends attribute to the respective years including dividends to be
paid after the year-end.

(4) Evaluation of Inventories
Inventories held for the purpose of usual use:
Inventory is stated at the lower of cost determined by the gross averagemethod or net realizable value.
(5) Depreciation of Property, plant and equipment
Declining-balance method:
Buildings acquired on or after April 1, 1998, buildings and structuresacquired on or after April 1, 2016 and specific fixed assets (all fixed
assets in the office used for developing a production system andproducing prototypes) acquired by the Company and its domestic
consolidated subsidiary are depreciated by the straight-line method
over their estimated lives.
Fixed assets owned by foreign subsidiary companies are depreciated by
the straight-line method.

17(6) Depreciation of Intangible assets and deferred charges
Straight-line method.

3. Conversion to U.S. Dollars
Amounts in U.S dollars are shown solely for convenience and are
unaudited.The rate of ¥110.99 to U.S.＄1 on March 31, 2019,
approximate current rate has been used for the purpose ofpresentation of the accompanying consolidated financial statements in
U.S. dollars. These translations should not be construed as
representations that the yen amounts actually represent, or have beenor could be converted into, U.S. dollars at that or any other rate.

I In v e s t or In f o r m a t io n ( A s o f M a r c h 31, 2019)

Corporate data
Company Name:

Mitsuboshi Belting Ltd.

Established:

October 10, 1919

Common Stock:8,150 million yen

Fiscal Year-End:

March 31

Public Accounting Firm:

Ernst & Young ShinNihon LLC

Number of Employees:

713（Consolidated : 4,342）

Major shareholders(Top10)

Ownership breakdown
Number of shares held(Thousands)

Name

Japan Trustee Services Bank, Ltd.

3,432

The Master Trust Bank of Japan, Ltd.

1,225

TOYOTA MOTOR CORPORATION

1,177

The Bank of Mitsubishi UFJ, Ltd .

1,170

Client stock ownership

933

STATE STREET BANK AND TRUST CLIENTOMNIBUS ACCOUNT OM02 505002

776

MITSUI & CO., LTD.

750

Mitsubishi UFJ Trust and Banking Corporation

686

DAIDO LIFE INSURANCE COMPANY

677

GOVERNMENT OF NORWAY

656

Financial institutions /Brokerages
30.9%

Individuals, etc.
32.7%

Foreign corporations
17.0%

Other corporate entities
19.4%

Stock price and trading volume on the Tokyo Stock Exchange

4

5

6

7

8

9

10 11 12

1

2

3

4

5

6

7

8

9

10 11 12

1

2

3

4

5

6

7

8

9

10 11 121

2

Stock Price
(¥)
3500

3

3000
2500
2000
1500
1000
500
Trading volume(Thousand Shares)

0

3,500
3,000
2,500
2,000
1,500
1,000
500
0

4

2016

5

6

7

8

9

10 11 12

1

2017

2

3

4

5

6

7

8

9

10 11 12

1

2

3

4

5

6

7

8

9

10 11 122018

As of October 1, 2018, the share consolidation was carried out at a ratio of 1 share per 2 common shares.

1

2

3

2019

18

Kobe Head Office:4-1-21 Hamazoe-dori, Nagata-ku, Kobe 653-0024, Japan
Tel: +81-78-671-5071 / Fax: +81-78-685-5670
Tokyo Head Office:2-3-4, Nihonbashi Chuo-ku, Tokyo 103-0027, Japan
Tel: +81-3-5202-2500 / Fax: +81-3-5202-2520
www.mitsuboshi.co.jp

Q00000000000000000000