2023

F i n a n c i a l

R e v i e w

Year ended March 31,2023

I C on t e n t sManagement Message ���������������������

1-2

Board Members and Executive Officers ��������������

3

About Us ���������������������������

4

Financial Highlights�����������������������

5

Consolidated Financial Document ����������������

6

News Release �������������������������

7-8

Global Network ������������������������ 9-10
Business Overview ����������������������� 11-14
Consolidated Balance Sheet ������������������� 15-16
Consolidated Statements of Income and Comprehensive Income ��

17Consolidated Statements of changes in equity�����������

18

Consolidated Statements of cash flows ��������������

19

Mitsuboshi Belting Group Code of Conduct ������������ 20-21

I Ma n a ge m e n t M e ssage

Our company has a history of more than 100 years since its establishment in1919,
and while maintaining a passion for "manufacturing" that has been passed down
continuously, while valuing the strong belief as a manufacturer, we support the
lives of everyone. We have contributed to society through the provision.
The socio-economic situation has been unstable in recent years, and in addition,
the industrial structure such as the automobile industry has entered a new phase.
As the business environment surrounding our company is changing frommoment to moment, we believe that excellent foresight that accurately grasps
the movements of the times such as people's way of thinking, lifestyle changes,
and trends will be an important basis for us.
In the future, we will be required to make further innovations in business
operations and technological development, but our Group employees will work
together to move forward step by step. Face the reality while looking ahead tothe next 100 years, and embody sustainable growth and transformation throughbusiness activities to solve social issues based on the basic philosophy of "To giveattentive consideration to both humanity and nature." We aim to develop into aprosperous future.

President

1

ファイナンシャルレ�ュー-本文.indd 1-2

22023/09/11 13:42

I B o a r d M e m b e r s a n d E x e c u t i v e O f f ic e r s

Board of Directors (June 29,2023)

President

Member of the Board

Member of the Board

Hiroshi Ikeda

Masayoshi Nakajima

Toshimi Kumazaki

Member of the Board

Member of the Board

Member of the Board

Ryuzo Miyao

Shinya Okuda

Member of the Board

Keiji Mataba

Yuka Miyake

Board of Corporate Auditors (June 29,2023)
Corporate Auditor (standing)

Kenkichi Masuda

Corporate Auditor

Corporate Auditor

Yasuhiro Tsuji

Jun Tanaka

Corporate Auditor

Hiroko Takiguchi

Executive Officers (June 29, 2023)
President, Executive Officer

Senior Managing Executive Officer

Managing Executive Officer

Managing Executive Officer

Vice-Senior Managing Executive Officer

Managing Executive Officer

Managing Executive Officer

Managing Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Hiroshi Ikeda
Keiji Mataba

Toru Shimomura

Toshimichi Takada
Koki Inoue

Executive Officer

Hiroya Osakada

3

Masayoshi Nakajima

Managing Executive Officer

Toshimi Kumazaki

Shinji Kuramoto

Kazutoshi Ishida
Akihiro Nagata
Masatsugu Tsuji

Kazuhiro Takeda
Isao Ideguchi

Toshiaki Yamashita

Member of the Board

Shinji Kuramoto

I A b ou t U s

Corporate Overview
Trade Name

Mitsuboshi Belting Ltd.

Established

October 10, 1919

Capital8,150,251,031 yen (March 31, 2023)

Employees

4,342 (Non-consolidated: 738) (March 31, 2023)

Fiscal Year-End

March 31

Public Accounting Firm

Ernst & Young ShinNihon LLC

Lines of Business

Power Transmission Belts and related productsElectronic Materials and Coating Materials

Conveyor Belts and Systems, related products

Engineering Plastics / Engineering Structural Foam

Waterproofing and Water Shielding Sheet

4I F in a n cia l H ig h l ig h t s
Revenue
Whole Financial Year

Operating income

10.7

％

Six Month Ended September 30

82,911（Millions of yen）

80,00072,002

8,127

36,76437,20037,06830,459

7,640

7,299

6,000

40,000（％）

9,030 159,000

64,86260,000increase from the previous year

（Millions of yen）

74,87071,051

18.2％

Six Month Ended September 30

Whole Financial Year
Operating marginincrease from the previous year

11.3
4,727

42,568

10.3

4,404

3,998

7.7

3,000

20,000

10.2

4,968

10.9

10

4,597

5

1,959

0

0
2019/32020/32021/32022/3

Ordinary Profit
Whole Financial Year

2020/32021/32023/32022/3

Profit attributable to owners of parent

22.4％

Six Month Ended September 30

02019/32023/310.8％

Six Month Ended September 30
Whole Financial Year

increase from the previous year

（Millions of yen）

increase from the previous year

（Millions of yen）

12,0009,000

10,471
8,945

8,000

8,552

7,659

5,731

5,759

5,256

4,439

4,329

4,000

6,157

6,000

3,532

3,000

7,071

6,380
5,464
4,066

3,068

2,296

3,919

2,917
1,600

0

0
2019/32020/32021/32023/32022/3

2019/3

Total assets

2020/32021/32022/32023/386,87787,6012022/32023/3

Net assets

Total assets
Equity ratio（％）
118,963 121,682 80（Millions of yen）

120,000

102,814 101,154

80,000

72.4

72.0

73.0

40,0000
2019/32020/390,000108,063

71.1

70.4

（Millions of yen）

2021/370

60,00060

30,000002023/32022/3

Dividends per share
Payout ratio

100.4

200

0

60

150

110
27

30

24

27

27

33

2019/32020/32021/32022/340

100

120 2050

002023/3

ROA

249.12203.50220.26
183.61139.84116.77101.41137.92100.2555.03

2019/32020/32021/32022/32023/3

ROE

（%）
12

（%）
12

9

9

6

2021/3

（Yen）
250

200

40.8
29.4

（％）
100

130 80
64.9

150

36

2020/3Whole Financial Year

（Yen）
250

29.5

2019/378,264Six Month Ended September 30

Annual dividend

50

71,953EPS

Interim dividend

100

72,419

6.2

5.4

5.6

5.9

8.7
7.6

6

7.7

8.1

5.4

3.9

3

3

0

0
2019/35

2020/32021/32022/32023/3

2019/32020/32021/32022/32023/3※ We conducted a reverse stock split on October 1, 2018, at a ratio of 1 share for every 2 shares of common stock, and the dividend amount is calculated based on the standard after
the said reverse stock split.
※ The dividend per share for the fiscal year ending March 31, 2019 includes a commemorative dividend of 10 yen per share for the 100th anniversary of the Company's founding.

I C on s ol id a t e d F in a n cia l D oc u m e n t
Outline of Consolidated Balance SheetThe previous fiscal year
Year ended March 31, 2022

The current fiscal year
Year ended March 31, 2023

26,671

118,963

121,682

Current
assetsCurrent
assets77,331

74,540Intangible assets

891

Investments andother assets

Non-current
assets44,42344,351

The current fiscal year
Year ended March 31, 2023

Total liabilities and net assets Total liabilities and net assets
Property, plant andequipment

Current liabilities

Intangible assets

Non-current
liabilities

28,399118,963

121,682

Liabilities

Liabilities

34,081

32,08622,215  791

Non-current
assets

16,860The previous fiscal year
Year ended March 31, 2022

Total assets

Total assets
Property, plant andequipment(Millions of yen)

Net assets

9,870

Net assets

86,877

Investments andother assets

87,601

Cost of sales
56,338Selling, general and administrative expenses 17,542

82,911

OperatingprofitOrdinary
profit12,219The current fiscal year
(From April 1, 2022 to March 31, 2023)

74,870Net
sales

Non-current
liabilities(Millions of yen)

The previous fiscal year
(From April 1, 2021 to March 31, 2022)

8,552

21,862

15,160Outline of Consolidated Statements of Income

7,640

Current liabilities

9,030
6,380

Profitattributableto owner ofparentNet
sales

10,47139
695
ーーExtraordinary
Extraordinary
income
loss

484
ー
1,924
Nonー
operatingNonoperating expenses
incomeOperatingprofitOrdinary
profit

9,814
7,071
2,742
ー
Incometaxes

Profitbeforeincometaxes

Outline of Consolidated Statements of Cash FlowsProfitattributableto owner ofparent(Millions of yen)

The current fiscal year
(1 April, 2022 - 31 March, 2023)
Cash and cash
equivalents at
end of period

Cash and cash
equivalents at
beginning of period

33,49433,063
8,783
ーCash flows fromoperating activities△6,439ーCash flows frominvesting activities

Sales by Business

1,827ー
Effect of exchange ratechange on cash and cash
equivalents

Operating income by Business

Others5,215mil
Building &Construction Materials
5,149mil
％

D

6.3
6.2％

Belts(Japan)
28,300mil

34.1％
53.4％

△3,741ーCash flows fromfinancing activities

Building &Construction Materials
204milOthers

1.6％ 1.2％ 160mil

C

C
B

B

26.6％

A

Belts(except Japan)
3,458mil

82,911 mil

A

70.6％
Belts(Japan)
9,172milBelts(except Japan)
44,246mil

Total Sales

D

Operating income(before adjustment deduction)

12,996 mil

6I N e w s R ele a s e

New plant in India begins operations

Contributing to the Realization of a Decarbonized Society ～Endorsement of TCFD
(Task Force on Climate-related Financial Disclosure) Recommendations～
Mitsuboshi Belting Ltd. (Head Office: Kobe, Hyogo; President: Hiroshi Ikeda) announces its support for the TCFD (Task Force on
Climate-related Financial Disclosure)*1 recommendations and has joined the TCFD Consortium*2, a forum for discussion amongsupporting companies and financial institutions.

Mitsuboshi Belting Ltd. (Head Office: Kobe, Hyogo, Japan) is actively developing global sales expansion activities, and is reviewing
and restructuring its production system in accordance with the Mid-Term Business Plan (FY2021-2023).
As a part of these efforts, a new plant of MITSUBOSHI BELTING-INDIA PRIVATE LIMITED, an affiliate company in India, has been
completed and started operations. In order to meet the growing demand for automobile and motorcycle belts in the Indian market,
the production capacity has been expanded to about three times of the old plant, with plans to increase it to about five times in the
future. We are also considering using the new plant as an export base.

Overview of the New Plant◦Company Name：MITSUBOSHI BELTING-INDIA PRIVATE LIMITED◦Location：Supa Parner Industrial Park MIDC, Maharashtra◦Site Area：80,000㎡

Accelerating efforts to become carbon neutral by 2050 ～Energy consumption at
Nagoya Plant switched to “Carbon Neutral City Gas”～

Mitsuboshi Belting Ltd. is promoting ESG management practices with the aim of contributing to the realization of a sustainable
society and sustainable growth of the Group. One of the Mitsuboshi Belting Group's materiality targets set for this fiscal year is"contribution to the realization of a decarbonized society," and we are working to achieve our target greenhouse gas emission
reduction (decrease of 22% or more in FY2023, 46% in FY2030, and carbon neutrality in 2050 compared to 2013 levels at eight sites
in Japan). To achieve this goal, we are promoting various measures, including the installation of solar panels at each business site
and the conversion to fuels that emit less greenhouse gases.
We will continue to promote sustainable business activities based on our corporate philosophy "To give attentive consideration
to both humanity and nature." and analyze climate-related risks and opportunities in line with TCFD recommendations, aiming to
expand information disclosure regarding our response to climate change.
※1
TCFD is a task force established by the Financial Stability Board (FSB) in 2015 at the request of the G20, which recommends that companies assess the financial impact ofclimate change risks and opportunities and disclose information based on four categories: governance, strategy, risk management, and indicators and targets.
（TCFD Web Site：https://www.fsb-tcfd.org/）※2
The TCFD Consortium is an organization and consortium established as a forum for companies and financial institutions that support the TCFD Proposal to work together
to promote effective corporate information disclosure and to discuss measures to link disclosed information to appropriate investment decisions by financial institutions.
（TCFD Consortium Web site：https://tcfd-consortium.jp/en）

Selected as a constituent of the “FTSE Blossom Japan Sector Relative Index”
Mitsuboshi Belting Ltd. (Head Office: Kobe City, Hyogo Prefecture; President: Hiroshi Ikeda) has been elected as a constituent of the
FTSE Blossom Japan Sector Relative Index.

“FTSE Russell confirms that Mitsuboshi Belting Ltd. has been independently assessed according to the index criteria and has satisfied
the requirements to become a constituent of the FTSE Blossom Japan Sector Relative Index. The FTSE Blossom Japan Sector RelativeIndex is used by a wide variety of market participants to create and assess responsible investment funds and other products.”

Mitsuboshi Belting Ltd.(Head Office: Kobe City, Hyogo Prefecture), as part of its efforts to become carbon neutral by 2050, switched
to “Carbon Neutral City Gas※1" provided by TOHO GAS Co., Ltd. (Head Office: Nagoya City, Aichi Prefecture) to reduce CO₂
emissions. This will reduce approximately 2,400 tons of CO₂ emissions per year at the Nagoya Plant.
In order to contribute to the realization of a sustainable society, our group has set a mid- to long-term goal to achieve carbon
neutrality by 2050, and is working to realize a decarbonized society through our business activities.
We will continue to contribute to the realization of a sustainable society by reducing CO₂ emissions and conserving resources
throughout the Group based on our basic philosophy, “To give attentive consideration to both humanity and nature.”.
※1 The term "Carbon Neutral City Gas“ refers to city gas that utilizes carbon neutral LNG, which offsets the greenhouse gases produced in each of theprocesses of natural gas extraction, transportation, manufacturing, and combustion with CO₂ credits.

7

The FTSE Blossom Japan Sector Relative Index, created by global index provider FTSE Russell, is designed to be sector-neutral,reflecting the relative performance of Japanese companies with superior environmental, social, and governance (ESG) performancein their respective sectors. In addition, to facilitate the transition to a low-carbon economy, for companies with high greenhouse gas
emissions, only those companies recognized for their improvement efforts by the Transition Pathway Initiative (TPI) Management
Quality Score are included.
The FTSE Blossom Japan Sector Relative Index has also been adopted by the Government Pension Investment Fund (GPIF), theworld's largest public pension fund management organization, as a benchmark for ESG passive management and is widely used tocreate and evaluate sustainable investment funds and other financial products.
Mitsuboshi Belting Group will continue to promote initiatives to solve social and environmental issues through its business activities
based on the corporate philosophy, "To give attentive consideration to both humanity and nature." and strive to further enhance its
corporate value.

8

Kobe Head Office

Tokyo Head Office

Kobe Plant R&D center

Nagoya Plant

Shikoku Plant

Shiga Plant

Ayabe Production System Development Center

Mitsuboshi Belting Kohki Co., Ltd.

★Kobe Head Office★Tokyo Head Office★Kobe Plant R&D center★Nagoya Plant★Shikoku Plant★Shiga Plant★Ayabe Production System Development Center★Mitsuboshi Belting Kohki Co., Ltd.

★ MITSUBOSHI POLAND Sp.z o.o.
★
Mitsuboshi Belting Europe GmbH★
MBL (USA) CORPORATIONSUZHOU MITSUBOSHI BELTING CO., LTD. ★ ★
MBL SHANGHAI INTERNATIONAL TRADING CO., LTD.
★
MITSUBOSHI BELTING-INDIA PRIVATE LIMITED★
★

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

STARS TECHNOLOGIES INDUSTRIAL LIMITED★ MITSUBOSHI OVERSEAS HEADQUARTERS PRIVATE LIMITED

PT. MITSUBOSHI BELTING INDONESIA ★★
★ PT. SEIWA INDONESIA
PT. MITSUBOSHI BELTING SALES INDONESIA…Plant & Sales Office…Plant…Plant…Sales…Sales office

MBL (USA) CORPORATION（USA）

MITSUBOSHI POLAND Sp.z o.o.
（Poland）

STARS TECHNOLOGIESINDUSTRIAL LIMITED（Thailand）

9

Mitsuboshi Belting Europe GmbH
（Germany）

SUZHOU MITSUBOSHI BELTING CO., LTD.
（China）

MITSUBOSHI OVERSEAS
HEADQUARTERS PRIVATE LIMITED（Singapore）

MITSUBOSHI BELTING-INDIA
PRIVATE LIMITED（India）

PT. MITSUBOSHI BELTING INDONESIA（Indonesia）

MOI TECH HONG KONG LIMITED（Hong Kong）

PT. SEIWA INDONESIA（Indonesia）

MBL SHANGHAI INTERNATIONAL
TRADING CO., LTD.
（China）

PT. MITSUBOSHI BELTING SALESINDONESIA（Indonesia）

MITSUBOSHI BELTING VIETNAM
CO., LTD.
（Vietnam）

MITSUBOSHI BELTING LTD. GROUP

10

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

The global economy has been recovered in the current fiscal year due toCash flow from operating activities achieved an income of 8,783 million yen,relaxation or lifting of behavioral restrictions by COVID-19. On the other hand,which was an decreace of 261 million yen over the previous fiscal year.

the unclear and unpredictable economic situation is still continuing due to

Major factors for this decrease are that corporate tax paid increased by 2,351

supply chain confusion, inflation of the energy and raw material cost arise

million yen compared to the previous fiscal year, while profit before income

from lengthening for Russia's invasion of Ukraine, higher interest rates due totaxes increased by 1,074 million yen.

suppressed inflation and rapid yen exchange rate fluctuations.

Cash flow from investing activities resulted in expenditure of 6,439 million yen,

Under these circumstances, Mitsuboshi Belting Ltd.("The Company") review

which was a increase of 941 million yen over the previous fiscal year.

the mid-term business plan 2021(FY2021 to FY2023) in May 2022 and the

Major factors for this increase are that payments into time deposits increased

company is working to establish a strong corporate structure which resilent toby 1,550 million yen, while incomes from time deposits also increased by 2,131

change, evolving from strengthening our financial position to improving capitalmillion yen compared to the previous fiscal year.

efficiency to increase earings and improve our balance sheet.

Cash flow from financing activities resulted in expenditure of 3,741 million yen,

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

which was an decrease of 496 million yen compared to the previous fiscal year.

sales of 82,911 million yen (10.7% increase compared to the previous fiscal year),

Major factors for this decrease are that incomes of long-term borrowings

the operating income of 9,030 million yen (18.2% increase compared to theincrease by 5,000million yen, while purchase of treasury shares increased by 525

previous fiscal year), the ordinary income of 10,471 million yen (22.4% increase

million yen and payments of dividents increase by 4,735 million yen compared

compared to the previous fiscal year) and the income attributable to owners ofto the previous fiscal year.

parent was 7,071 million yen (10.8% increase compared to the previous fiscal

After adding 1,827 million yen of exchange rate difference to the total amountyear).

of cash flows through operating, investing and financing activities, the amountof increase in cash and cash equivalents was 430 million yen. In addition, as aresult of adding the opening balance of 33,063 million yen, the balance of cash
and cash equivalents at the end of the current fiscal year was 33,494 million yen.

Belts
Sales and Operating Income（Japan）●Business of Belts（Japan）
Millions of yen(Sales)

0
,7
27

I

8,500

I

27,000

I

8,000

I
7,

7,000

I

24,000I

2023/36,500

I

2022/3■ Operating Income

Belts
Global Sales and Operating Income（except Japan）
24
6
3,

45
8

44
,

3,

I

36
,

I

2022/3■ Total Sales

2023/3■ Operating Income

1,500

I

35,000

2,000

I

I

48
8

I

37,000

I

2.500

I

39,000

3,500

3,000

I

41,000I

43,0004,000

I45,000Millions of yen(Income)84
7

Millions of yen(Sales)I

11

I

25,000I

Regarding the automotive belts, although sales for motorcycle and utility vehicles decreased due
to adjsutment inventory volume in US aftermarket, sales for automobile remained steady insouth east Asia and Europe.
As a result, overall sales increased.
Regarding indsutrial belts, sales for aglicurtural machine slight decreased, however sales forother fields increased in south east Asia and Europe due to demand expansion and sales
promotion activities.
And sales for OA machines increased due to solving the semiconductor shortage.
Including the impact of the depreciation of the yen, as a result, the consolidated net sales by thissegment stood at 44,246 million yen (21.3% increase compared to the previous fiscal year) while
the consolidated operating income by this segment stood at 3,458 million yen (10.1% decrease
compared to the previous fiscal year).

7,500

19
2

26,000■ Total Sales●Global Business (except Japan) of Belts

9,
17
2

30
28
,
74

9,000

I

I

28,0009,500

I29,000Millions of yen(Income)I

Regarding the automotive belts, although sales of the belts for motorcycle repair decreased due
to our coustomer adjusted the inventory volume, sales of system product for automobile andthe belts for bus and truck repair increased.
As a result, sales of automotive belts increased.
Regarding the industrial belts, although sales of injection molding machine have been strong in
the current fiscal year,overall sales slight decreased due to our coustomer were difficult topurchase parts of goods.
In contrast, regarding the conveyor belts, sales increased because the demands recovery forfood industry and strong sales for large logistics facilities. And sales of engineering plastics
materials also increased, because of demand recovery in current fiscal year and sales promotion
activities for main product(ex. cast nyron)
As a result, the consolidated net sales by this segment stood at 28,300 million yen (1.9% increase
compared to the previous fiscal year) while the consolidated operating income by this segment
stood at 9,172 million yen (27.5% increase 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 capital investment, the Group invested total 3,638 million yen by ourthis management principle, we are strenuously making efforts to further improveown capital. For instance, the renovation of office and warehouse at Sendai Sales

fundamental technologies and to positively use simulation technologies for

Office, the expantion of the facility for Automotive timing belts, the renewal of

luidity analysis, impact analysis and stress analysis so that we may cope withthe scouring machines, and the renewal of the calendar facilities

customers' demand which is diverse and changeable in a timely manner.
At the same time, we are performing overall research and development
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 through cooperation
between R&D department, Research & Designing sections in our operating
divisions, and Development department of each group company. Besides, theGroup is pursuing joint research with universities and public research institutes
as well as joint development with other companies under a close tie-up andcooperation, for the purpose of carrying out the research effectively anddeveloping a cutting edge technology.
The total R&D expenses of the group for the current fiscal year was 3,178 million
yen.
The total R&D expenses included the basic research expenses of 717 million yenthat is not allocatable to each division.

Building & Construction Materials
Sales and Operating Income
Millions of yen(Sales)

7,000

I

500

I

8,000

I

●Business of Building & Construction Materials

Millions of yen(Income)5,000

I

In civil engineering sector, although the number of construction projects had been same as

4,000

I

5,

300

20
4

I

0

200

13

6

I

1,000

I

100

I

stood at 204 million yen (49.5% increase compared to the previous fiscal year).

2,000

I

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

3,000

I

As a result, the consolidated net sales by this segment stood at 5,149 million yen (4.0% decreaseIprevious fasical year, sales decreased due to reduction in the size of each case.

5,
14
9

on public facilities due to relaxation of behavioral restrictions by COVID-19.

I

6,000

36
3

I

400

In construction sector, sales increased because demand recover for renovation work with a focus■ Total Sales

2023/30I2022/3■ Operating Income

OthersSales and Operating Income
Millions of yen(Sales)I

200

I

2022/3■ Total Sales

2023/3■ Operating Income

0

I

I

0

50

I

1,000

I

100

I

2,000

150

I

3,000

I

segment stood at 160 million yen (35.3% decrease compared to the previous fiscal year).

160

As a result, the consolidated net sales by other businesses stood at 5,215 million yen (0.5%decrease compared to the previous fiscal year) while the consolidated operating income by this

5,
2

24

8

15

24
2
5,

I

4,000

250

I

purchased products, etc.

5,000

I

Other businesses include the supply of engineering structural foams, electronic Materials, and

300

I

6,000

I

●Other Businesses

Millions of yen(Income)12

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

4. Risks to the Business
Listed below are the various risks that our president recognises it's possible toaffect significantly to consolidated company's financial statement, businessperformance and cash flow.
Note that matters pertaining to the future presented herein are determined byus as of the end of the current fiscal year.

(1) Economic Status
The Group develops, manufactures and provides functional components
principally in the automobile, general engineering, agricultural machines, IT andconstruction ｍaterial industries. Our main markets are Japan, Asia, U.S. andEurope, etc. The change in demand from various industries and the economic
status around the world could affect us adversely.
The Group distributes our main products, power transmission belts, to theindustries above. Low demand or a reduction in equipment investment in eachcompany could cause our market to shrink and have a detrimental impact on our
performance as well.
Approximately 75% of power transmission belts sold by our company are
manufactured in other countries. As the Group is expected to be more
dependent on overseas manufacturing in the future due to growing global
economy, a sluggish global economy could negatively affect our operating
performance.
War, 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 Group may have difficulty procuring materials and products
to customers. To reinforce our product material supply system, We have taken
several countermeasures, including a review of gloval production structure,.
However, there is no guarantee that all risks are eliminated.
Therefore, the domestic and international economic situation and industry trend
may have an impact on our business performance and financial situation.

(2) Abnormal Situation due to COVID-19
The Group manufactures and provides products for various industries mainly inJapan, Asia, the U.S. and Europe, etc. So, In the situation such as the spread of
COVID-19 in all over the world, socioeconomic activities aroound the world may
stagnate, which may affect the Group's financial conditions and businessperformance.
Under these circumstances, the Group established COVID-19 countermeasures
headquarters, and reviewed working systems and promoted working fromhome. In addition, through the activities of the Risk Management Committee, we
are working to minimize business risks by standardizing the manuals for infection
spread prevention and formulating BCPs. We will promote our business byenhancing the systems for comunicating with customers even in severe
situations.

(3) Impact on Automobile Industry
Approximately 40% of the Group's sales are dependent on the automotive
industry. Although The Group does not belong to any specific automobile
manufacturer, but unmanageable factors, such as a economy slump in
automobile industries, poor business performance of client company, damages
caused by large-scale natural disasters, and changes in component procurement
policy could affect us.
Although the Group have engaged in management in order to maintain andimprove customer satisfaction for all clients including those in the automobile
industry, such changes in these circumstances may affect our businessperformance.
Regarding the progress of vehicle electrification, the Group is constantly
watching the trends and taking countermeasures against the decrease indemand of belts for internal combustion engines as a medium to long-term risk.

(4) Material Procurement
The Group's production bases need a variety of materials such as rubber, fabric,
fiber and resin, which are essential for manufacturing products. We procure thesematerials from diverse suppliers who can supply products stably, inexpensively

13

and with no quality problems. Through the activities of the Risk Management
Committee, the Group is making preparations for purchasing important materials
and processed products from multiple companies so that we do not become
excessively dependent on specific business partners. Also, we request ourbusiness partners to formulate BCPs.
However, in a phase of a soaring resource price including crude oil, there is apossibility that a rapid rise in market price of major raw materials could lead to asignificant increase in manufacturing costs. Moreover, stable and efficient
procurement of raw materials from overseas and supply of raw materials tooverseas affiliated companies could be interfered by changes in export/import
restrictions, etc.
Therefore, in the case that the Group is not able to procure raw materials flexibly
or that procurement costs continue to rise extremely, it may have an impact on
our business performance.

(5) Exchange Rate Fluctuation
The Group manufactures and sells its products mainly in Japan, Asia, U.S. andEurope, etc. Exchange rate fluctuations may have a strong influence ontransactions denominated in foreign currencies involving export in each area andforeign assets and liabilities such as deposit, account receivable and loans.
Since our consolidated financial statements are converted into Japanese Yen,
exchange rates used to convert into Japanese Yen have a influence on its valueeven if there is no fluctuation of value on its local currency basis. The
appreciation of the yen against other currencies could affect our businessperformance.
The Group has taken various measures to reduce or avoid the exchange rate risks
as much as possible. Nonetheless, as there are not few cases that would not be
dealt with in the short term, it may affect our business performance and adecrease in asset value potentially.

(6) O fficial Restrictions on Businesses in Japan andOverseas
In the countries where the Group is operating businesses, we are exposed to avariety of regulations on export/import controls, custom duty, and business
investment, etc. Also our activities should be restricted legally by antimonopoly
laws, patent rights, tax, and the environmental regulation including waste
disposal and recycling. If our business activities are not able to accommodate
quickly and flexibly to these business environments, it would rise costs andcompel us to retreat from overseas businesses, which could affect our businessperformance.

(7) Product Quality
In order to maintain and improve the product quality of the Group, we haveestablished a strict quality control standards based on customer demand and theGroup's standards. In the case that any defective products are found or customer
complaints are received, we enrolled in insurance to minimize losses.
Nevertheless, any expense which is not covered by any available insurance could
affect the Goup's business performance or financial situation.

(8) Risks from Natural Disasters
The Group's production bases could be subject to a catastrophic damage caused
by natural disasters such as earthquakes and floods. In such situations, the Groupwould be difficult to supply products to our customers, or temporary massive
burden of expense for repairs would be incurred, resulting in a drop in sales.
In preparation for such disasters, we will establish production systems in Japanand overseas including back-up for overseas production bases. In addition, we
are working to strengthen our systems by considering the way to avoid risks for
product delivery through the Risk Management Committee activities, in order tosupply our products to cusomers promptly after large-scale accidents ordisasters.
In spite of these efforts, however, there is a possibility of temporary suspension ofoperations, delays in delivery, and a huge amount of expenses for repairs, which
could affect our business performance.
Even if the Group's production bases are not damaged, our sales may decline if
major customers suffer catastrophic damage due to natural disasters, or if the
supply chain is disrupted or production is forced to cease.

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

The Company believes that enhancing corporate governance is one of the most

The Company has a Board of Directors comprising eight members, of whommanagement priorities, in order to secure the trust of its shareholders and fulfill

three are outside directors. The Company also has a Board of Corporate Auditors

its corporate social responsibilities.

consisting of four members, of whom three are outside corporate auditors. The

In accordance with this basic philosophy, the Company strives to enhance its

Board of Directors make decisions on important matters and supervise thebusiness productivity by responding promptly and flexibly to the changes in theexecution of operations by directors. Regarding important metters, we hold abusiness environment and the markets. The Company will enhance its corporate

management meeting to have prior discussions sufficiently before the meetinggovernance as following Basic Policy by addressing strengthening of theof the Board of Directors.

supervisory function of management and the internal control system, in order to

As an arbitrary mechanism, Nomination and Remuneration Advisory Committee

maintain and enhance its management efficiency and transparency.

has been set up with aim of strengthening the independence, objectivity andaccountability of the functions of the Board of Directors regarding the[Basic Policy]

appointment, dismissal, and compensation, etc. of the management team.

1. T he Company strives to respect its shareholders’ rights and secure its

The committee is a voluntary advisory board consisting of three or moreshareholders’ equality.

members, the majority of whom are independent outside directors.

2. The Company strives to respect its stakeholders' rights and positions, and work

The Company employs an executive officer system.

properly in harmony with its stakeholders (shareholders, customers,

By separating the functions of management decision-making and supervisionemployees, communities and so on) .

from operational execution, the Company aims to strengthen its operational

3. The Company strives to disclose its corporate information timely and property,

execution structure and bolster management efficiency.

and, thereby, secure transparency and fairness.
4. The Company strives to fulfill properly the functions and responsibilities of its
board of directors meeting and so on, in light of its fiduciary responsibility andaccountability to its shareholders.
5. The Company strives to have constructive dialogues with its shareholders.

Governance Structure
General Meeting of Shareholders

Auditing

Board of Directors

Board of Corporate Auditors（eight directors, including
three outside directors）
adviceNomination andRemuneration
Advisory Committee（four corporate auditors, including
three outside corporate auditors）

Appointment,
removalReporting
Cooperation

Accounting audits
Auditing

Management,
supervision

Cooperation

Representative directors
Management Council

Accounting auditor

consult

Appointment,
removal（Ernst & Young ShinNihon LLC）

Appointment,
removalReportingInstructions

Sustainability Promotion
Committee
Risk Management
Committee

Cooperation

Audit depertment

Compliance Committee
SDGs Promotion
Committee
Information Security
Committee

Accounting audits
Internal audits

Work Style Reform
Promotion Committee
Executive officers/business departments, Group companies

14

I C on s ol id a t e d B a l a nc e S h e e tYears ended March 31

ASSETS

Millions of yen

2023/32022/3Current assets
Cash and deposits

35,307

34,708Notes and accounts receivable - trade, and contract assets

16,657

17,788Merchandise and finished goods

17,395

15,324Work in process

2,513

2,115

Raw materials and supplies

4,368

3,892

Other

1,188

833

Allowance for doubtful accounts

△ 100

△ 123

77,331

74,540

Buildings and structures

24,05923,801

Machinery, equipment and vehicles

50,36049,815Tools, furniture and fixtures

16,071

15,667

Land

3,978

3,958

Leased assets

1,870

1,725

Construction in progress

4,738

2,804

Subtotal

101,079

97,773

Accumulated depreciation△ 72,680△ 71,101

28,39926,671

Software

601

823

Goodwill

130

－

Other

59

67

Total Intangible assets

791

891

Investment securities

13,597

15,179Deferred tax assets

1,148

1,205

Other

422

493

Allowance for doubtful accounts

△8

△ 18

Total investments and other assets

15,16016,860Total non-current assets

44,351

44,423

Total assets

121,682

118,963

Total current assets
Non-current assets
Property, plant and equipment

Total property, plant and equipment
Intangible assets

Investments and other assets

15

Years ended March 31

LIABILITIES AND NET ASSETS

Millions of yen

2023/32022/3Current liabilities
Notes and accounts payable - trade

9,889

9,898

Short-term borrowings

2,329

2,327

Current portion of long-term borrowings

1,900

900

Accounts payable - other

1,982

2,646

Income taxes payable

201

1,576

Provision for bonuses

974

928

Provision for product warranties

477

508

Other

4,107

3,429

Total current liabilities

21,862

22,215

4,000

900

142

162

Deferred tax liabilities

4,644

5,206

Retirement benefit liability

1,948

2,226

Provision for retirement benefits for directors (and other officers)

16

13

Asset retirement obligations

363

363

Long-term guarantee deposited

393

386

Other

710

610

Total non-current liabilities

12,219

9,870

Total liabilities

34,081

32,086

Share capital

8,150

8,150

Capital surplus

2,143

2,119

Retained earnings

70,81870,315

Treasury shares△ 7,559△ 6,395

73,552

74,188Valuation difference on available-for-sale securities

8,310

9,368

Foreign currency translation adjustment

5,785

3,344

Remeasurements of defined benefit plans

△ 48

△ 25

Total accumulated other comprehensive income

14,048

12,688

Total net assets

87,60186,877

Total liabilities and net assets

121,682

118,963

Non-current liabilities
Long-term borrowings
Long-term accounts payable - other

Shareholders' equity

Total shareholders' equity
Accumulated other comprehensive income

16

I C onsolid a t ed S t a t emen t s o f Inc ome a nd C ompr ehensi v e Inc ome

Years ended March 31

Millions of yen

2023/32022/3

Net sales

82,911

74,870

Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit

56,33826,572
17,542
9,030

51,442
23,427
15,787
7,640

281
397
556
688
1,924

92
365
627
262
1,347

51
307
―
125
484
10,471

43
276
51
63
435
8,552

39
39

187
187

695
695
9,814

―
―
8,740

2,815
△ 72
2,742
7,071
7,071

2,721
△ 361
2,359
6,380
6,380

Non-operating income
Interest income
Dividend income
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Loss on retirement of non-current assets
Sales discounts
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of investment securities
Total extraordinary income
Extraordinary loss
Impairment loss
Total extraordinary loss
Profit before income taxes
Income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
ProfitProfit attributable to owners of parent
Years ended March 31

Millions of yen

2023/3
ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non controlling interests172022/3

7,071

6,380

△ 1,058
2,441
△ 22
1,360
8,432

1,385
3,097
182
4,665
11,045

8,432―

11,045―

I C on s ol id a t e d S t a t e m e n t s o f c h a n g e s in e qu i t y

Years ended March 31

Millions of Yen

The current fiscal year (From April 1, 2022 to March 31, 2023)
Shareholders' equity

Balance at March 31, 2022

Accumulated other comprehensive income

Treasuryshares

Total
Valuation
Foreign
Remeasurements accumulated
Total
difference
currencyof defined
othershareholders' on availabletranslation
benefit planscomprehensive
equityfor-saleadjustment
incomesecurities

Total net
assetsSharecapitalCapitalSurplusRetainedearnings

8,150

2,119

70,315 △ 6,395

74,188△ 6,568△ 6,568△ 6,568

7,071

7,071

7,071

△ 1,204 △ 1,204△ 1,204

9,368

3,344

△ 25

12,68886,877

Changes during period
Dividends of surplus
Profit attributable to owners of parent
Purchase of treasury shares
Disposal of treasury shares

24

40

Change in scope of consolidation

65

65

―

―

Net changes in items other thanshareholders' equity
Total changes during period―24503 △ 1,164

Balance at March 31, 2023

8,150

2,143

70,818 △ 7,559△ 1,058

2,441

△ 22

1,360

1,360

△ 636 △ 1,058

2,441

△ 22

1,360

724

73,552

5,785

△ 48

14,04887,601

8,310

Years ended March 31

Millions of Yen

The previous fiscal year (From April 1, 2021 to March 31, 2022)
Shareholders' equity

Balance at March 31, 2021

Accumulated other comprehensive income

Treasuryshares

Total
Valuation
Foreign
Remeasurements accumulated
Total
difference
currencyof defined
othershareholders' on availabletranslation
benefit planscomprehensive
equityfor-saleadjustment
incomesecurities

Total net
assetsSharecapitalCapitalSurplusRetainedearnings

8,150

2,111

65,768 △ 5,788

70,241△ 1,833△ 1,833△ 1,833

6,380

6,380

6,380

△ 679

△ 679

△ 679

72

80

80

―

―

7,983

247

△ 207

8,023

78,264

Changes during period
Dividends of surplus
Profit attributable to owners of parent
Purchase of treasury shares
Disposal of treasury shares

7

Change in scope of consolidation
Net changes in items other thanshareholders' equity
Total changes during period―

7

Balance at March 31, 2022

8,150

2,119

4,547

1,385

3,097

182

4,665

4,665

△ 607

3,947

1,385

3,097

182

4,665

8,612

70,315 △ 6,395

74,188

9,368

3,344

△ 25

12,68886,87718

I C on 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

2023/32022/3Operating activities:
Profit before income taxes

9,814

8,740

Depreciation

4,104

3,867

695

−

Impairment losses
Increase (decrease) in allowance for doubtful accounts

△ 34

13

Increase (decrease) in retirement benefit liability

△ 445

231

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

△ 20

△ 30

Increase (decrease) in provision for retirement benefits for directors (and other officers)

2

△ 12

Increase (decrease) in provision for bonuses

20

9

△ 679

△ 457

51

43

Interest and dividend income
Interest expenses
Foreign exchange losses (gains)

△ 95

△ 124

Loss (Gain) on sales of property, plant and equipment

6△2

Loss on retirement of property, plant and equipment

307

276

Loss (gain) on sales of investment securities

△ 39

△ 187

Decrease (increase) in trade receivables

1,949

△ 921

△ 2,036△ 1,688

Decrease (increase) in inventories
Increase (decrease) in trade payables
Increase (decrease) in accrued consumption taxes

△ 632

175

572

△ 68

Decrease (increase) in other current assets

△ 360

97

Increase (decrease) in other current liabilities

△ 281

529

Other, net
Subtotal

21△3

12,921

10,488Interest and dividends received

679

457

Interest paid

△ 49

△ 43

△ 4,208△ 1,857

9,341

9,044

Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities△ 3,046△ 1,496

Proceeds from withdrawal of time deposits

Payments into time deposits

2,136

5

Purchase of property, plant and equipment△ 5,600△ 6,058

Proceeds from sales of property, plant and equipment

69

32

Purchase of investment securities△5△4

Proceeds from sales of investment securities
Other, net
Net cash provided by (used in) investing activities

50

226

△ 602

△ 84

△ 6,997△ 7,3802△0Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings

5,000

−

Repayments of long-term borrowings

△ 900

△ 900

Purchase of treasury shares△ 1,204△ 679

Dividends paid

△ 6,568△ 1,833

Other, net
Net cash provided by (used in) financing activities168△ 3,245

1,827

904

Net increase (decrease) in cash and cash equivalents

430

△ 677

Cash and cash equivalents at beginning of period

33,06333,741

Cash and cash equivalents at end of period

33,49433,063

Effect of exchange rate change on cash and cash equivalents

19

△ 70
△ 3,741

Mitsuboshi Belting Group Code of Conduct
1. Compliance・ We, the Mitsuboshi Belting Group, will act in good faith and comply with all applicable laws, regulations, and social normsof each country and region where we conduct business activities.

5. Quality
・ Based on our management principle "To contribute to society by supplying goods of high performance, high precision,and high quality," we will execute our duties, keeping in mind that quality assurance for customers is our top priority.

・ We will respect corporate ethics, abide by internal regulations, and will not engage in any misconduct.

・ We will provide safe and superior quality products and services.

・ We will execute operations and education based on our policy and framework for thorough compliance on various

・ We will promptly respond to complaints with sincerity.

systems, including the internal reporting system.

6. Safety and health2. Human rights and labor・ We will support and respect the protection of personality and human rights.
・ We will not tolerate any discrimination on the grounds of race, nationality, gender, sexual orientation, gender identity,age, religion, creed, ethnicity, immigration, disability, poverty, marital status, family status, or any other reason.

・ To ensure that everyone can work with peace of mind, we will appropriately manage the health and safety of ouremployees and prevent accidents and disasters.
・ We will comply with health- and safety-related laws and regulations and health and safety management guidelines.
・ We will work to prevent occupational accidents through risk assessment and health and safety training.

・ We will not engage in inhumane treatment, including abuse, corporal punishment and any form of harassment, or any act
that violates the dignity of a person.
・ We will pay fair wages in compliance with applicable laws and regulations.
・ We will comply with the legal working hours and holidays.
・ We will not engage in any forms of forced labor.
・ We will not unreasonably require employees to hand over their identity documents or work permits, or unreasonably
collect deposits.
・ We will not employ children under the legal working age.
・ We will guarantee our employees' freedom of association and the right to collective bargaining.

7. Information security
・ We will identify the information assets to be protected and manage and protect them appropriately.
・ We will comply with laws and regulations on information security as well as contractual security requirements.
・ In the event of an information security-related incident or accident, we will promptly investigate the cause and strive
to minimize damage and prevent recurrence.

8. Supply chain
・ We will disseminate CSR Guidelines, which are based on our Code of Conduct, to our suppliers to promote the3. Environment
・ We will establish an environmental management system that ensures the continuous improvement of our performanceon environmental issues, and we will strive to conserve resources and energy.
・ We will work to reduce greenhouse gas (GHG) emissions.
・ We will work to reduce and recycle waste.
・ We will work to manage and reduce wastewater, sludge, and exhaust emissions.

implementation of sustainability initiatives.
・ We will conduct procurement activities in consideration of the effects on local communities of the use of raw
materials that may cause social problems, such as human rights issues and environmental issues, and will takemeasures to avoid their use if there is any concern.

9. Coexistence with local communities

・ We will strive to make effective use of water resources and address water risks.

・ We will value partnerships with local communities.

・ We will properly manage chemical substances in products and will grasp and report the amount of chemical substances

・ We will conduct social contribution activities that will lead to solving issues of local communities.

handled to the regulating authorities.
・ We will not use any substances prohibited by laws and regulations in our products and manufacturing processes.
・ We will conduct all business activities, including raw materials procurement, in consideration of the conservation of
biodiversity and will strive to realize a sustainable society where people and nature coexist in harmony.

10. Information disclosure
・ We will disclose information to our stakeholders in a timely and appropriate manner to ensure the transparency of ourcorporate activities.

4. Fair corporate activities
・ We will conduct fair trade that respects commercial ethics and free competition and will not engage in privatemonopolies, unreasonable trade restrictions, or unfair trade practices (such as unfair competition and abuse of superiorbargaining position).
・ We will establish appropriate relationships with local governments and public officials, as well as customers andsuppliers, and will take measures to prevent corruption.
・ We will eliminate any relationships with antisocial forces and organizations.
・ We will respect the intellectual property rights of third parties, such as patent rights, copyrights, and trademark rights.
・ We will establish points of contact for complaints and consultation and guarantee the protection of whistleblowers.
・ We will not engage in insider trading.
・ We will act in a way to avoid situations that may cause a conflict of interest with the company.

20

November 1, 2022
Mitsuboshi Belting Ltd.

21

2023
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.com

F i n a n c i a l

R e v i e w

Year ended March 31,2023※ It is strictly prohibited to duplicate and/or modify part or all of this ﬁnancial review regardless of the form.