2022

F i n a n c i a l

R e v i e w

Year ended March 31,2022

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

CSR Basic Policy and SDGs Initiatives ���������������

20

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 in
1919, 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 theprovision.
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"thinking about people and thinking about the earth." We aim to develop into aprosperous future.

President

12

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 29,2022)

President

Member of the Board

Member of the Board

Member of the Board

Hiroshi Ikeda

Yoshio Yamaguchi

Masayoshi Nakajima

Toshimi Kumazaki

Member of the Board

Member of the Board

Member of the Board

Member of the Board

Shinji Kuramoto

Ryuzo Miyao

Shinya Okuda

Member of the Board

Keiji Mataba

Yuka Miyake

Board of Corporate Auditors (June 29,2022)
Corporate Auditor (standing)

Kenkichi Masuda

Corporate Auditor

Corporate Auditor

Yasuhiro Tsuji

Jun Tanaka

Corporate Auditor

Hiroko Takiguchi

Executive Officers (June 29, 2022)
President, Executive Officer

Senior Managing Executive Officer

Senior Managing Executive Officer

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

Toshimi Kumazaki

Toru Shimomura

Toshimichi Takada
Masaru Matsui

3

Yoshio Yamaguchi
Keiji Mataba

Kazutoshi Ishida
Akihiro Nagata
Koki Inoue

Masayoshi Nakajima
Shinji Kuramoto

Kazuhiro Takeda
Isao Ideguchi
Masatsugu Tsuji

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, 2022)

Employees

4,201 (Non-consolidated: 730) (March 31, 2022)

Fiscal Year-End

March 31

Public Accounting Firm

Ernst & Young ShinNihon LLC

Lines of Business

Power Transmission Belts and related products

Metal Nanoparticles Related Products

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

Operating income

15.4

％

Six Month Ended September 30
Whole Financial Year
（Millions of yen）

increase from the previous year（％）
15

（Millions of yen）

80,00072,002

69,5949,000

74,87071,051

8,429

64,86260,00037,20036,76435,585

4,738

37,06830,459

8,127

7,640

7,299
12.1

6,000

40,00053.8％

Six Month Ended September 30

Whole Financial Year
Operating marginincrease from the previous year

11.3
4,727

10.3

4,404

7.7

3,000

20,000

10.2

4,968

10

3,998

5

1,959

0

0
2018/3

2019/32020/32021/3

Ordinary Profit
Whole Financial Year
（Millions of yen）

9,000

2020/32022/32021/356.9％

Six Month Ended September 30
Whole Financial Year

increase from the previous year

increase from the previous year

（Millions of yen）

8,945

8,808

2019/3

Profit attributable to owners of parent

48.5％

Six Month Ended September 30

02018/32022/3

9,000

8,552
7,659

6,000

6,252

6,000

5,759

5,256

5,227

4,439

4,329

3,000

3,627

3,000

2,296

6,380

6,157

3,532

5,464
4,066

3,068

2,917
1,600

0

0
2018/3

2019/32020/32022/32021/3

2018/3

Total assets

2019/32020/372,41971,953

2019/32020/32022/32021/3

Net assets

Total assets
Equity ratio（Millions of yen）

118,963

120,000

95,80280,000102,814 101,154

71.3

73.0
72.4

40,0000
2018/3

2019/32020/3（Millions of yen）

120,000

108,063

71.1

70.4

（％）
80

70

80,00060

40,0000068,3482022/32021/3

2018/3

Dividends per share
Payout ratio

Whole Financial Year

（Yen）
150

143

（％）
90

（Yen）
250

200

64.9

100

60
24.2

0

54
29.5

29.4

57

60

40.8

30

22

24

27

27

33

2018/3

2019/32020/32021/32022/3206.65203.50220.26
183.61150
100

119.89139.84116.77101.41

100.25
55.03

50
0

ROA

0
2018/3

2019/32020/32021/32022/3

ROE

（%）
12

（%）
12

9

9

6

2022/3Six Month Ended September 30

Annual dividend

50

2021/386,877EPSInterim dividend

50

78,264

6.7

6.2

5.6

5.4

9.5

8.7

7.7

7.6

6

5.4

3.9

3

3

0

0
2018/3

5

2019/32020/32021/32022/3

2018/3

2019/32020/32021/32022/3※ The "Partial Amendments to Accounting Standard for Tax Effect Accounting" (ASBJ Statement No. 28, February 16, 2018) and others are effective from FY 2019; for FY 2018, theamounts are after retroactive application of such accounting standards.
※ 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.
※ We conducted a reverse stock split on October 1, 2018, at a ratio of 1 share for every 2 shares of common stock; net income per share is calculated as if such reverse stock split had
been conducted at the beginning of the fiscal year ended March 31, 2018.

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, 2021

The current fiscal year
Year ended March 31, 2022

Current
assetsCurrent
assetsIntangible assets

74,54068,751

1,149

Investments andother assets

14,650Property, plant andequipment

Current liabilities

Intangible assets

Non-current
liabilities

19,65826,671  891

Non-current
assetsNon-current
assets44,42339,312The current fiscal year
Year ended March 31, 2022

Total liabilities and net assets
Total liabilities and net assets

118,963

108,063

23,511The previous fiscal year
Year ended March 31, 2021

Total assets

Total assets
Property, plant andequipment(Millions of yen)

10,141

Investments andother assets

118,963

108,063

Liabilities

Liabilities

29,79916,860(Millions of yen)

Cost of sales
51,442
Selling, general and administrative expenses 15,787

74,870OperatingprofitOrdinary
profit9,870

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

64,862Net
sales

Non-current
liabilities

86,87778,264The previous fiscal year
(From April 1, 2020 to March 31, 2021)

5,759

22,215

Net assets

Net assets

Outline of Consolidated Statements of Income

4,968

Current liabilities

32,086

7,640
4,066

Profitattributableto owner ofparent

Net
sales

8,740

8,552
435
1,347
ー
ー
NonNonoperating
operating expenses
incomeOperatingprofit187
ーExtraordinary
incomeOrdinary
profit

6,380
2,359
ー
Incometaxes

Profitbeforeincometaxes

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

The current fiscal year
(1 April, 2021 - 31 March, 2022)
Cash and cash
equivalents at
beginning of period

Cash and cash
equivalents at
end of period

33,741
9,044
ーCash flows fromoperating activities

33,063△7,380ーCash flows frominvesting activities△3,245ーCash flows fromfinancing activities

Sales by Business

Operating income by Business

Others5,242mil
Building &Construction Materials
5,363mil％

Building &Construction Materials
136mil

D

7.0
7.2％

Others

1.2％ 2.2％ 248mil

Power Transmission
Belts(Japan) C
27,774mil

37.1％
48.7％

904
ー
Effect of exchange ratechange on cash and cash
equivalents

B
A

C
B

33.7％
Power Transmission
Belts(except Japan)
3,847mil

62.9％

74,870 mil

APower Transmission
Belts(Japan)
7,192milPower Transmission
Belts(except Japan)
36,488mil

Total Sales

D

Operating income(before adjustment deduction)

11,425 mil

6I N e w s R ele a s e

KPIs for FY2023 (final year under MTP)
To achieve our FY2030"target position," we are using the period until FY 2023 as time for strengthening

ROE and value of cross-shareholdings sold as new KPIs, and to achieve these, have reset (raised) our

Profitability"dividend payout ratio" target.

Before revision

RevisedFY2023 KPI target

FY2023 KPI target

・Net sales: 75.0 billion yen
・Operating profit: 8.3 billion yen(at least 11%)

・Net sales: 80.0 billion yen
・Operating profit: 8.3 billion yen
・ROE: 8%
・Value of cross-shareholdings sold:at least 1.5 billion yen (over three years)

Capitalefficiency−

Capitalinvestment

・3-year capital investment budget:
15.0 billion yen

・3-year capital investment budget:
23.0 billion yen

Shareholder
returns

・Dividend per share: at least 54 yen(*consolidated payout ratio: 35%)・3-year average consolidated total
return ratio: 50%

・Dividend payout ratio (FY2021): 65%
・Dividend payout ratio (FY2022): 100%・Dividend payout ratio (FY2023): 100%・CO2 emission reduction target:
at least 20% vs. FY2013

・CO2 emission reduction target:
at least 22% vs. FY2013

ESG

Estimatedexchange rates

7

of our foundation, and have set targets for

105 yen/USD
115 yen/EUR

115 yen/USD
125 yen/EUR

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

Although lockdowns were implemented in some countries and regions due

Cash flow from operating activities achieved an income of 9,044 million yen,

to the re-expantion of COVID-19, the global economy has been recovoered inwhich was an increase of 432 million yen over the previous fiscal year.

the current fiscal year as vaccinations were expanded. On the other hand, theMajor factors for this increase are that profit before income taxes increased byunclear and unpredictable economic situation is still ongoing, which is caused

2,883 million yen compared to the previous fiscal year, while inventory assets

from the chip shortage, rising cost of raw materials and logistics, increasing

increased by 2,098 million yen.

geopolitical risks and concerns about high-inflation due to Russian's invasion ofCash flow from investing activities resulted in expenditure of 7,380 million yen,

Ukraine.

which was a decrease of 4,309 million yen over the previous fiscal year.

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

Major factors for this decrease are that payments into time deposits increased byconsolidated subsidiaries (together with “the Group”) have continued to take

1,493 million yen and purchase of property, plant and equipment also increased

measures to prevent infection with COVID-19. In addition, in order to achieve theby 2,340 million yen compared to the previous fiscal year.

mid-term business plan 2021 which run from FY2021 to FY2023, the Group has

Cash flow from financing activities resulted in expenditure of 3,245 million yen,

been strengthening our corporate structure by further improving management

which was an increase of 859 million yen compared to the previous fiscal year.

efficiency and reducing costs to become a strong company that can withstand

Major factors for this increase are that repayment of long-term borrowings

changes in the environment.

decreased by 1,300 million yen compared to the previous fiscal year, while

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

purchase of treasury shares increased by 679 million yen.

sales of 74,870 million yen (15.4% increase compared to the previous fiscal year),

After adding 904 million yen of exchange rate difference to the total amountthe operating income of 7,640 million yen (53.8% increase compared to theof cash flows through operating, investing and financing activities, the amountprevious fiscal year), the ordinary income of 8,552 million yen (48.5% increaseof decrease in cash and cash equivalents was 677 million yen. In addition, as acompared to the previous fiscal year) and the income attributable to owners of

result of adding the opening balance of 33,741 million yen, the balance of cash

parent was 6,380 million yen (56.9% increase compared to the previous fiscal

and cash equivalents at the end of the current fiscal year was 33,063 million yen.

year).

Power Transmission Belts
Sales and Operating Income（Japan）
27
,7
74

I

7,000

I

27,000

7,500

6,500

I

26,000

I
6,000

24
,7
77

I

25,000

I

5,500

I

4,
76
2

I

2021/3■ Total Sales

2022/34,500

I

23,0005,000

I24,000I■ Operating Income

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

4,500

I

3,

I
I

2,
73
5
,6
11
29

I

2021/3■ Total Sales

2022/3■ Operating Income

2,000

I

I

28,0002,500

I30,000

I

3,000

I

32,000

4,000

3,500

I

34,000I

36,000

84
7

36
,4

88

38,000Millions of yen(Income)I

11

Regarding global Business (except Japan) of Power Transmission Belts, sales in any region of Asia
and Europe and the U.S. have recovered significantly compared to the previous fiscal year when
was damaged greatly by COVID-19.
In the U.S., sales of belts for snowmobiles and utility vehicles have been strong, and sales ofautomotive belts also have increased due to the sales expansion in aftermarket. In Southeast Asia
and China, sales for motorcycles increased significantly. Moreover, although there were
production adjustments at users due to the chip shortage, sales for automotive belts exceeded
the previous fiscal year as a result of focusing on sales expansion in aftermarket.
Regarding industrial belts, sales have increased due to sales expansion in aftermarket in Asia andEurope. Also, regarding belts for OA equipment, although production at users recovered
gradually, sales throughout the current year remained at the same level as the previous fiscal
year because of the chip shortage in the second half of the period.
As a result, the consolidated net sales by this segment stood at 36,488 million yen (23.2%
increase compared to the previous fiscal year) while the consolidated operating income by thissegment stood at 3,847 million yen (40.7% increase compared to the previous fiscal year).

28,000Millions of yen(Income)I●Global Business (except Japan) of Power Transmission Belts

Millions of yen(Sales)I

Regarding the business of belts in Japan, the demand recovered in all industries because theeconomic activities of major customers have been recovered compared to the previous fiscal
year.
Regarding the automotive belts, although our customers adjusted the production volume dueto the chip shortage, sales for installed car production line increased because of the sales
expansion for the belt drive system products.
Also sales of belts for aftermarket increased due to the strong demand of used cars.
Regarding the industrial belts, sales for injection molding machine and robot industry have beenstrong in the current fiscal year, and sales for agricultural machinery also increased due to theeffects of government subsidies.
Regarding conveyor belts, sales increased because the demands in food and logistics industry
have recovered.
Sales of engineering plastics materials also increased due to expansion of demands in theindustry.
As a result, the consolidated net sales by this segment stood at 27,774 million yen (12.1%
increase compared to the previous fiscal year) while the consolidated operating income by thissegment stood at 7,192 million yen (51.0% increase compared to the previous fiscal year).

7,
19
2

●Business of Power Transmission Belts（Japan）

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 4,369 million yen

this management principle, we are strenuously making efforts to further improveby our own capital. For instance, the construction of a new factory in Shiga

fundamental technologies and to positively use simulation technologies forfactory's premises, the redevelopment of Kobe office, the new installation of

luidity analysis, impact analysis and stress analysis so that we may cope with

an automated warehouse, the renewal of the management server, and thecustomers' demand which is diverse and changeable in a timely manner.

expantion of the facility for free span belts.

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 2,961 million
yen.
The total R&D expenses included the basic research expenses of 809 million yenthat is not allocatable to each division.

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

I

500

400

On the other hand, in civil engineering sector, sales decreased due to a decrease in construction

4,000

I

1

I

29

200

13
6

I

0

300

I

1,000

I

100

I

stood at 136 million yen (53.2% decrease 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 5,363 million yen (6.7% decrease

5,
36
3

5,000

I

74

recovery in demand for renovations of public and private property.

5,

6,000

I

In construction sector, sales achieved the same level as the previous fiscal year because of a

projects such as waste disposal sites and a reduction in scale of projects.

I

7

7,000

I

8,000

I

●Business of Building & Construction Materials

Millions of yen(Income)■ Total Sales

2022/30I2021/3■ Operating Income

OthersSales and Operating Income
Millions of yen(Sales)
42

250

4,

I

72
6

24
8

5,
2

I

200

I

4,000

300

I

applying metal nanoparticles, and purchased products, etc.

5,000

I

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

6,000

I

●Other Businesses

Millions of yen(Income)As a result, the consolidated net sales by other businesses stood at 5,242 million yen (10.9%
12

3

I

150
100

I

2021/3■ Total Sales

2022/3■ Operating Income

0

I

I

0

50

I

1,000

I

2,000

I

segment stood at 248 million yen (100.8% increase compared to the previous fiscal year).

3,000

I

increase compared to the previous fiscal year) while the consolidated operating income by this12

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. 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. In the situation such as the spread of COVID19 in all over the world, socioeconomic activities around the world may stagnate,
which may affect the Group's financial conditions and business performance.
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 communicating 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, unmanageable factors, such as a economy slump in automobile
industries, poor business performance of client company, damages caused bylarge-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, changes in these circumstances may affect our business performance.
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
and with no quality problems. Through the activities of the Risk Management
Committee, the Group is making preparations for purchasing important materials

13

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 Group'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 nine members, of whom threemanagement priorities, in order to secure the trust of its shareholders and fulfill

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 matters 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

Board of Directors

Board of Corporate Auditors（nine 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,
removalAuditing・
Monitoring

ReportingInstructions

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 n c e S h e e tYears ended March 31

ASSETS

Millions of yen

2022/32021/3Current assets
Cash and deposits

34,70833,771－

15,938Notes and accounts receivable - trade, and contract assets

17,788－Merchandise and finished goods

15,324

12,944Work in process

2,115

2,014

Raw materials and supplies

3,892

3,364

833

825

△ 123

△ 107

74,54068,751

Buildings and structures

23,801

22,250Machinery, equipment and vehicles

49,81549,988Tools, furniture and fixtures

15,667

15,627

Land

3,958

3,943

Leased assets

1,725

1,487

Construction in progress

2,804

1,103

Subtotal

97,773

94,399△ 71,101△ 70,887

26,671

23,511

Software

823

1,090

Other

67

59

Total Intangible assets

891

1,149

Investment securities

15,17913,245

Deferred tax assets

1,205

1,029

Other

493

393

Allowance for doubtful accounts

△ 18

△ 18

Total investments and other assets

16,86014,650Total non-current assets

44,42339,312

Total assets

118,963

108,063

Notes and accounts receivable - trade

Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment

Accumulated depreciation
Total property, plant and equipment
Intangible assets

Investments and other assets

15

Years ended March 31

LIABILITIES AND NET ASSETS

Millions of yen

2022/32021/3Current liabilities
Notes and accounts payable - trade

9,898

8,716

Short-term borrowings

2,327

2,325

900

900

Accounts payable - other

2,646

2,048

Income taxes payable

1,576

681

Provision for bonuses

928

886

Provision for product warranties

508

215

Other

3,429

3,884

Total current liabilities

22,215

19,658Long-term borrowings

900

1,800

Long-term accounts payable - other

162

193

Deferred tax liabilities

5,206

4,823

Retirement benefit liability

2,226

1,999

Provision for retirement benefits for directors (and other officers)

13

26

Asset retirement obligations

363

367

Long-term guarantee deposited

386

376

Other

610

555

Total non-current liabilities

9,870

10,141

Total liabilities

32,086

29,799

Share capital

8,150

8,150

Capital surplus

2,119

2,111

Retained earnings

70,31565,768Treasury shares△ 6,395△ 5,788

74,18870,241

Valuation difference on available-for-sale securities

9,368

7,983

Foreign currency translation adjustment

3,344

247

Remeasurements of defined benefit plans

△ 25

△ 207

Total accumulated other comprehensive income

12,688

8,023

Total net assets

86,87778,264

Total liabilities and net assets

118,963

108,063

Current portion of long-term borrowings

Non-current liabilities

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

2022/32021/3

Net sales

74,87064,862

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

51,442
23,427
15,7877,640

45,86818,993
14,025
4,968

92
365
627
262
1,347

84
341
152
544
1,123

43
276
51
63
435
8,552

59
96
45
131
332
5,759

187
187
8,740

97
97
5,857

2,721
△ 361
2,359
6,380
6,380

1,876
△ 85
1,791
4,066
4,066

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
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

2022/3
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 interests

17

2021/3

6,380

4,066

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

2,313
1,542
△ 41
3,815
7,881

11,045―

7,881―

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, 2021 to March 31, 2022)
Shareholders' equity

Balance at beginning of period

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
Balance at end of period

―

7

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

12,68886,877

Years ended March 31

Millions of Yen

The previous fiscal year (From April 1, 2020 to March 31, 2021)
Shareholders' equity

Balance at beginning of period

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

63,272 △ 5,788

67,745△ 1,570△ 1,570△ 1,570

4,066

4,066

4,066

△0

△0

―

―

―

―

5,669 △ 1,294

△ 166

4,207

71,953

Changes during period
Dividends of surplus
Profit attributable to owners of parent
Purchase of treasury shares△0

Disposal of treasury shares
Change in scope of consolidation△00

Net changes in items other thanshareholders' equity
Total changes during period
Balance at end of period

―

△0

8,150

2,111

2,496

2,313

1,542

△ 41

3,815

3,815

△0

2,495

2,313

1,542

△ 41

3,815

6,310

65,768 △ 5,788

70,241

7,983

247

△ 207

8,023

78,26418

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

2022/32021/3Operating activities:
Profit before income taxes

8,740

5,857

Depreciation

3,867

3,972

13

△3

Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in retirement benefit liability

231

277

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

△ 30

△ 73

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

△ 12

3

Increase (decrease) in provision for bonuses
Interest and dividend income
Interest expenses

9

38

△ 457

△ 426

43

59

△ 124

△ 57

Loss (Gain) on sales of property, plant and equipment△2△3

Loss on retirement of property, plant and equipment

276

96

△ 187

△ 97

Foreign exchange losses (gains)

Loss (gain) on sales of investment securities
Decrease (increase) in trade receivables

△ 921

220

△ 1,688

410

Increase (decrease) in trade payables

175

△ 984

Increase (decrease) in accrued consumption taxes

△ 68

△ 127

97

371

Decrease (increase) in inventories

Decrease (increase) in other current assets
Increase (decrease) in other current liabilities

529

288

Other, net

△3

296

Subtotal

10,488

10,119457

426Interest and dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities

△ 43

△ 59

△ 1,857△ 1,873

9,044

8,612

△ 1,496△3

Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits

5254

Purchase of property, plant and equipment△ 6,058△ 3,718

Proceeds from sales of property, plant and equipment

32

254

Purchase of investment securities

△4

△ 36

Proceeds from sales of investment securities

226

266

Other, net

△ 84

△ 88

△ 7,380△ 3,071△0△1

Repayments of long-term borrowings△ 900△ 2,200

Purchase of treasury shares

△ 679

△0

△ 1,833△ 1,570

Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings

Dividends paid
Other, net
Net cash provided by (used in) financing activities△ 331△ 4,104

904

1,160

Net increase (decrease) in cash and cash equivalents

△ 677

2,597

Cash and cash equivalents at beginning of period

33,741

31,143

Cash and cash equivalents at end of period

33,06333,741

Effect of exchange rate change on cash and cash equivalents

19

168△ 3,245

I C S R B a sic P ol ic y a n d S D G s Ini t ia t i v e s

CSR Basic Policy
CSR Basic Policy and SDGs Initiatives
The Mitsuboshi Belting Group's CSR activities are based on the basic philosophy of "To give attentive consideration to both humanity and nature."
and we aim to coexist with our stakeholders (shareholders, customers, employees, local communities, etc.) by pursuing advanced technologicalcapabilities to provide advanced ideas and "high performance, high precision, and high quality."
We will strive for a comfortable and prosperous future by coexisting with our stakeholders (shareholders, customers, employees, local communities,etc.) and continuously contributing to people and society. We will continue to contribute to people and society, aiming for a comfortable andprosperous future.

I Contribution to society
By providing safe and highly reliable products based on superior technology, we willcontribute to the world's "manufacturing" by cooperating with related business
partners and playing a part in the products needed by society.

I Cooperation and cooperation with the local community
We value communication with society at large, and contribute to society bycoordinating and coordinating with local communities while fulfilling our businessactivities.

I Contribution to the global environment
We aim to create a company that is always conscious of coexistence with the global
environment by creating products that have less impact on the environment andpromoting environmental conservation as a group.

I Respect for human rights
We will respect the human rights of people and employees in society, and aim to be
a company where each employee can work comfortably, play an active role, andprovide a rewarding workplace.

I Continuous strengthening of business governanceWe aim to be a company where both the Group and its stakeholders can growtogether by complying with laws and regulations and continuing legal businessactivities.

20

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※ It is strictly prohibited to duplicate and/or modify part or all of this ﬁnancial review regardless of the form.

Q156DATA2208UR01948B74