2020

F i n a n c i a l

R e v i e w

Year ended March 31,2020

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

President

Hajime Kakiuchi

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

Board of Directors
President

Hajime Kakiuchi

Board of Corporate
Auditors

President, Executive Officer

Hajime Kakiuchi

Managing Executive Officer

Executive Officer

Corporate Auditor(standing)

Senior Managing
Executive Officer

Managing Executive Officer

Executive Officer

Managing Executive Officer

Executive Officer

Managing Executive Officer

Executive Officer

Managing Executive Officer

Executive Officer
Executive Officer

Member of the Board

Kenkichi Masuda

Member of the Board

Corporate Auditor

Masayoshi Nakajima

Yoshio Okushima

Member of the Board

Corporate Auditor

Yoshio Yamaguchi

Takashi Katayama

Yasuhiro Tsuji

Member of the Board

Corporate Auditor

Hiroshi Ikeda

Executive Officers

Yoshio Yamaguchi
Senior Managing
Executive Officer

Masayoshi Nakajima
Vice-Senior Managing
Executive Officer

Jun Tanaka

Takashi Katayama

Takashi Sasaki
Keiji Mataba

Shinji Kuramoto

Toru Shimomura

Toshimi Kumazaki

Member of the Board

Managing Executive Officer

Managing Executive Officer

Member of the Board

Managing Executive Officer

Executive Officer

Ryuzo Miyao

Hiroshi Ikeda

Shinya Okuda

Takeshi Hamura

Kazutoshi IshidaToshimichi Takada
Naotsugu Morita
Akihiro Nagata
Nobuyasu Nishikawa
Isao Ideguchi
Masaru Matsui

Kazuhiro Takeda（June 26, 2020）

Contents

1

Management Message ����������

1

Financial Highlights������������

2

History �����������������

4

Global Network  �������������

5

Business Overview ������������

7

Consolidated Balance Sheets �������

11

Consolidated Statements of Income ����13

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

14

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

15

Consolidated Statements of Cash Flows���16

Notes To Consolidated Financial Statements�

17

Investor Information �����������

18

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

Millions of yen

2020

2019

2018

Sales Business Segment :Power Transmission Belts(Japan)¥27,266¥28,395¥28,037

Power Transmission Belts(except Japan)

32,49532,917

31,974

Building & Construction Materials

6,872

5,978

4,854

Others

4,417

4,710

4,727

Total

71,051

72,002

69,594

46.3%

46.1%

46.5%

Exports sales ratio
Cost of sales¥49,206¥49,510¥47,182

Selling, general and administrative

14,545

14,364

13,982

Operating income

7,299

8,127

8,429

Income before income taxes

7,814

8,876

8,921

Income attributable to owners of parent

5,464

6,157

6,252

101,154

102,81495,802¥183.61¥203.50¥206.65

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

54.00

60.00

50.00

2,474.56

2,393.66

2,258.96

Gross profit margin

30.7%

31.2%

32.2%

Operating income margin

10.3%

11.3%

12.1%
326.80%328.70%347.80%Capital expenditures

Current ratio¥5,964¥3,259¥3,239Depreciation expense¥3,324¥3,012¥2,999Equity ratio

71.1%

70.4%

71.3%

Long-term debt ratio against equity

13.0%

14.8%

12.2%

Number of shares outstanding (thousands)

32,60432,60465,208

Note: Income statement and balance sheet figure for the periods ended March 31, 2020, 2019, and 2018 were audited by Accounting Auditors and which are different from ones
disclosed in Tokyo Stock Exchange in consideration of expected readers.
・The change was applied retrospectively following the revision of ASBJ Statement No. 28 Partial Amendments to Accounting Standard for Tax Effect Accounting (February 16,2018). And, the major management indicators for the periods ended March 31, 2018 is the number applied retrospectively following this accounting standard.
・The Company performed a two-for-one share consolidation effective as of October 1, 2018.
Net income per share, Cash dividents per share and Book value per share are calculated on the assumption that the share consolidation was performed at April 1, 2017.

Consolidated Statements of Income（Japanese Yen）
Net Sales

Operating income

Ordinary income

71,051mil

7,299mil

7,659milSales by Business
Building &Construction Materials
6,872milProfit attributableto owners of parent

5,464milOperating income by Business
Others4,417milD

6.2％

Others

2.6％ 0.5％ 55mil

Power Transmission
Belts(Japan) C
27,266mil

9.7％

38.4％
45.7％

Building &Construction Materials
261mil

A

C

33.6％

B

Power Transmission
Belts(except Japan)
3,446milB

63.3％

71,051 mil

APower Transmission
Belts(Japan)
6,486milPower Transmission
Belts(except Japan)
32,495mil

Total Sales

D

Operating income(before adjustment deduction)

10,249 mil

2

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

Operating income
Operating income
Operating margin

1.3% decrease
from the previous year

（Million Yen）
80,00067,062

66,396

69,59472,002（Million Yen）
9,000

71,051

7,630

60,0006,000

11.4

40,00010.2% decrease
from the previous year
8,278

8,429

12.5

12.1

8,127
11.3

7,299
10.3

3,000

20,000
0

2016

2017

2018

2019

Ordinary income

2016

2017

2018

14.4% decrease（Million Yen）
9,000

7,788

8,487

8,808

7,659

3,000

3,000

2017

2018

from the previous year

（Million Yen）
9,000

8,945

6,000

2016

2020

11.2% decrease

6,000

0

2019

Income attributable to owners of parent
from the previous year

2019

5,691

0

2020

Total assets & Equity ratio

2016

6,663

6,252

6,157

2017

2018

2019

2020

63,136

68,34872,41971,953

2017

2018

2019

2020

216.29206.65203.50

2017

2018

2019

2020

8.7

7.6

2019

2020

5,464

Total net assets

Total assets
Equity ratio（％）
80（Million Yen）
120,000

80,000

87,27868.5

89,912

95,802
71.3

70.2

102,81470.4

101,154

2016

2017

2018

2019

60,00060

30,0000

071.1

40,000

0（Million Yen）
90,00070

2020

Cash dividends & Payout ratio

59,7502016

EPS(Earnings Per Share)

Cash dividends
Payout ratio
（Yen）
90

60

30

0

29.5
20.4
36

2016

20.3
44

24.2
50

60

29.4
54

2017

2018

2019

2020

240
180

176.71

6.6

7.5

183.61

120

0

60
0

2016

（％）
12

9

9

6.7

6.2

5.4

3

3

（Yen）

ROE(Return On Equity)

（％）
12

0

20

10

ROA(Return On Assets)

6

（％）
30

9.5

10.8

9.5

6
3

2016

2017

2018

2019

2020

0

10

5

0

2020

（％）
15

2016

2017

2018

0

I H is t o r y

2019
MITSUBOSHI 100th Anniversary

1966

2016

Released "HYPERFLEX™" Coupling.

Released "Smastar™", Alternator
Dumper Pulley absorbs the rotation
fluctuation of automotive engine.

1969

Started manufacturing
Polyurethane Timeng Belts.

Released "MIZUSHEET",
a water-shielding sheet forcivil (engineering) work.

1963
Released Waterproofing Sheet.
Released Steel Cord Conveyor Belts.

1957

Started manufacturing Timing Belts.

1971

Released Cast-Nylon.

1979

2015
Released "Smart Tension",a simple belt tension
measurement app
for smartphones.

2010

Releaseｄ "Giga Torque GX
Timing belt & pulley" - for ultra
heavy duty use.

Released Light Conveyor Belt.

1980

Started manufacturing
Engineering Structural Foams.

2007 Released Silver paste "MDot™".

1940

Startedmanufacturing
V-belts.

1996

1936

Started manufacturing Conveyor Belts.

1929

Released "MITSUBOSHI Hi-COLOR™ F".

"e-POWER™"
2003 Released- energy-saving belt

1999 Released "Worm Wheel".

Started manufacturing Flat Belts.

1919

Established in Kobe, Japan.

4

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

MBL (USA) CORPORATION

Mitsuboshi Belting Ltd.

Mitsuboshi Belting Europe GmbHMITSUBOSHI POLAND Sp.z o.o.

MBL SHANGHAI INTERNATIONAL
TRADING CO., LTD.

SUZHOU MITSUBOSHI BELTING CO., LTD.

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

P.T. SEIWA INDONESIA

MITSUBOSHI BELTING-INDIA PRIVATELIMITED

5

MITSUBOSHI OVERSEAS HEADQUARTERS
PRIVATE LIMITED

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

SUZHOU MITSUBOSHI BELTING CO., LTD.

MBL（USA) CORPORATION

Mitsuboshi Belting Ltd.
（Kobe Head Office）

MOI TECH
HONG KONG LIMITED

Mitsuboshi Belting Ltd.
（Tokyo Head Office）

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

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

P.T. Mitsuboshi Belting Indonesia

STARS TECHNOLOGIESINDUSTRIAL LIMITED6

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

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

In this fiscal year, Japanese economy also showed slow down due to global

Cash flow from operating activities achieved an income of 7,914 million yen,economy slow down from the beginning of the year, and domestic companies'

which was an decrease of 851 million yen over the previous fiscal year.

profits had been on a downward trend, mainly in the manufacturing industry.

Major factors for this decrease are trade receivable decreased by 1,281 million

In addition, the global economy has modulated due to effect of US-China tradeyen, but ｐrofit before income taxes decreased by 1,062 million yen and trade

friction and China's economic slowdown etc, and the global economy has been

payables decreased by 805 million yen compared to he previous fiscal year.

down rapidly and been serious situation due to spread of infection of COVID-19

Cash flow from investing activities resulted in expenditure of 349 million yen,since the new year.

which was an increase of 7,527 million yen over the previous fiscal year.

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

Major factors for this increase are proceeds from withdrawal of time deposits

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

increased by 4,855 million yen and payments for time deposits decreased bysales operation promoting and the manufacturing system, and working to2,246 million yen compared to the previous fiscal year.

improve business efficiency and to attain further cost reduction.

Cash flow from financing activities resulted in expenditure of 6,208 million yen,

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

which was an decrease of 7,592 million yen compared to the previous fiscal year.

of 71,051 million yen (1.3% decrease compared to the previous fiscal year),

Major factors for this increase were proceeds from long-term debt decreased

the operating income of 7,299 million yen (10.2% decrease compared to theby 3,300 million yen and purchase of treasury shares increaseｄ by 2,462 million

previous fiscal year), the ordinary income of 7,659 million yen (14.4% decrease

yen compared to the previous fiscal year.

compared to the previous fiscal year) and the income attributable to owners of

Subtraction the effect of exchange rate change on cash and cash equivalents ofparent was 5,464 million yen (11.2% decrease compared to the previous fiscal

864 million yen from the total amount of cash flows through operating, investingyear).

and financing activities, resulting in an increase of cash and cash equivalents of

The situation by business is as follows.

493 million yen It became a circle. In addition, as a result of adding the opening
balance of 30,650 million yen to this, the balance of cash and cash equivalents at
the end of the this fiscal year was 31,143 million yen.

Power Transmission Belts
Sales and Operating Income（Japan）●Business of Power Transmission Belts（Japan）
for installed car production line a little bit of increased compared to the previous fiscal year due

30,000Million Yen(Income)
7,500

9

I

Million Yen(Sales)I

In automotive belts, sales of belts for aftermarket were similar to the previous fiscal year, but sales

7,
95
,3

6,

48
6

28

66
,2
27

6,000

2019
■ Total Sales

44
6
95
,4

3,000

32

2,500

I

32,000I

expantion of demand for wind-power generation, in the result, whole sales were similar to the

3,

91
32
,

were a bit of increased in Europe. In Asia, although the sales for agricultural machines decreased,I

33,000I

In industrial belts, sales in the U.S. were similar to the previous year, and sales for aftermarket

3,500

7

sales in Asia increased.

I

34,0004,000

ISoutheast Asia increased due to increased demand of motorcycles at same area led to whole

35,000Million Yen(Income)I

were decreased, so whole sales were similar to the previous year. On the other hand, sales inMillion Yen(Sales)I

variable speed belt for snowmobile and utility vehicle were steady, but sales for automotive belts

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

41
1

In the Europe, sales for both automotive and motorcycles belts decreased. In the U.S, sales of

5,000■ Operating Income

3,●Global Business（except Japan）of Power Transmission Belts

2020

I

25,0005,500

Isegment stood at 6,486 million yen (9.1% decrease compared to the previous fiscal year).

6,500

I

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

26,000I

As a result, the consolidated net sales by this segment stood at 27,266 million yen (4.0%I

bit of decreased due to sales to foods industry decreased slightly.

27,000I

On the other hand, sales of conveyor belts for were strong, however sales of plastics belts a little

28,000I

And sales of belts for OA equipment also decreased due to decrease in productions by users.

7,000

I

manufacturing restrained capital investment.

29,000I

machine tools market. In engineering plastics materials, sales decreased due to whole of theI

In industrial belts, sales decreased significantly due to the down in injection modeling machine,13

to sales of new products increased and adapted in new model automotive.

previous year.

30,000

I

2,000

I

31,000I

Sales of belts for OA equipment decreased due to sales for Japanese users decreased.
As a result, the consolidated net sales by this segment stood at 32,495 million yen (1.3%
segment stood at 3,446 million yen (1.0% increase compared to the previous fiscal year).

2019■ Total Sales

2020■ Operating Income

1,500

I

7

decrease compared to the previous fiscal year) while the consolidated operating income by this2. Research and Development Activities
The management principle of the Group is; “To contribute to society by

3. S ummary of Investment in Plant andEquipment

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

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

this management principle we are strenuously making efforts to further improvecan meet the user needs, we invested total 5,964 million yen by our own capital.

fundamental technologies and to positively use simulation technologies for

For instance renewal of core system, expanding the manufacturing facilities

luidity analysis, impact analysis and stress analysis so that we may cope withof belt and functional system parts for automobile, increase test facilities, andcustomers' demand which is diverse and changeable in a timely manner.

renew the domestic and foreign aging facilities.

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 by R&D and Research &Designing sections in our operating divisions in cooperation with Development
Department of each group company. Besides, we are pursuing joint researchwith universities and public research institutes as well as joint developmentwith other companies under a close tie-up and cooperation, for the purpose ofcarrying out research effectively and developing a cutting edge technology.
The total R&D expenses of all our group companies for this fiscal year was 2,814
million yen.
The total R&D expenses included the basic research expenses of 791 million yen
not allocatable to each division, for Silver nanoparticles paste, Coatings & inks forglass, Surface treatments for glass, Conductive copper paste, Thick film copper
circuit boards, etc.

Building & Construction Materials
Sales and Operating Income
Million Yen(Sales)

I

5,000

I

engineering sector.

4,000

I

300

24

7

26
1

I

1,000
0

I

200

I

2,000

I

100

I

stood at 261 million yen (5.5% increase compared to the previous fiscal year).

3,000

I

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

IAs a result, the consolidated net sales by this segment stood at 6,872 million yen (15.0% increase

5,
97
8

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

400

I

6,000

I

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

6,

87

2

7,000

500

I

I

●Business of Building & Construction Materials

Million Yen(Income)

8,000■ Total Sales

2020

0

I

2019

■ Operating Income

OthersSales and Operating Income

4,
41
7
17
9

I
I

150

2,000

I
100

I

0

I

50

I

1,000

55

I

segment stood at 55 million yen (69.2% decrease compared to the previous fiscal year).

200

I

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

3,000

250

I

nanoparticles machinery and equipment and purchased products, etc.
As a result, the consolidated net sales by other businesses stood at 4,417 million yen (6.2%

I

4,000

300

I

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

5,000

I

●Other Businesses

Million Yen(Income)4,71
0Million Yen(Sales)■ Total Sales

2020■ Operating Income

0

I

2019

8

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

4. Risks to the Business(5) Material Procurement

Listed below are the various risks that our president recognises it's possible to

Our production bases need a variety of materials such as rubber, fablic, glass fiber

affect significantly to consolidated company's financial statement, businessand resin which are essential for product manufacturing. We procure these

performance and cash flow.

materials from diverse suppliers considering a stability, price and quality.

Note that matters pertaining to the future presented herein are determined by

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

us as of the end of fiscal year.

possibility that a rapid rise in market price of major raw materials could skyrocket
manufacturing costs. Moreover, stable and efficient procurement of raw(1) Economic Statusmaterials from overseas and supply of raw materials to overseas affiliated

The Group develops, manufactures and provides functional components

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

principally in the automobile, general engineering, IT and construction industries.

or procurement costs continue to rise extremely, it may have a impact on our

Our main markets are Japan, Asia, USA, and Europe, etc. The change in demandbusiness performance.

companies could be interfered by export/import restrictions, etc.

from various industries and the economic status around the world could affect us
adversely.
The Group distributes our main products, power transmission belts, to the(6) E xchange Rate Fluctuationindustries above. Low demand or a reduction in equipment investment in each

The Group manufactures and sells its products mainly in Japan, Asia, USA andcompany could cause our market to shrink and have a detrimental impact on our

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

performance as well.

transactions denominated in foreign currencies involving export in each area andApproximately 75% of power transmission belts sold by our company areforeign assets and liabilities such as deposit, account receivable and loans.

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

When preparing our consolidated financial statements, exchange rates used tooverseas manufacturing in the future due to growing global economy, a sluggish

convert into Japanese Yen have a influence on its value denominated in

global economy could affect our operating performance.

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

War, terror, riots, disaster like earthquake, epidemic could strike a sharp blow on

Appreciation of the yen against other currencies, especially the U.S. dollars andeconomy. Slowdown in demand could be expected during the event. it is also

Euro having a large impact on the Group, could affect our business performance.

expected to difficult to procure materials and provide products to customers. To

The Group has taken as many effective measures to reduce or avoid thereinforce our product material supply system, we have taken several

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

countermeasures. However, there is no guarantee that all risks are eliminated.

not be cleared in the short term, it may affect our business performance and a

Therefore, the domestic and international economic situation and industry trend

decrease in asset value potentially.

may have an impact on our business performance and financial situation.

(2) Abnormal Situation due to COVID-19(7) O fficial Restrictions on Businesses in Japan andOverseas

The Group manufactures and provides products for various industries mainly inIn the countries where our businesses operate, the Group is exposed to a variety

Japan, Asia, the U.S. and Europe, etc. So, in the situation that spreads and affects

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

all over the world such as COVID-19, the economic activities of the entire global

etc. Also our activities should be restricted legally by antimonopoly laws, patenteconomy may stagnate, and the financial statement and business performancerights, tax, and the environmental regulation including waste disposal andof the Group may be affected.

recycling. If our business activities are not able to accommodate quickly andIn this situation, the Group will review of work system, positive introduce

flexibly to these business environments, it would rise costs and compel us totelework and minimize business risk by formulating BCP.

retreat from overseas businesses, it could affect our business performance.

Also, the Group will enhance the communication sysytem with custmers toconstract better structure and promote the business activity even in sirious
situiation.

(8) Product Quality
In order to maintain and improve the product quality of the Group, we have(3) Price Competition

established a strict standards based on customer demand standards and theMarket competition in our main business areas such as automobile, IT andcustomer complaints are received, the Group enrolled in insurance to minimize

construction industries is getting extremely severe.

losses.

A demands for competitive price and high value-added products from our

Nevertheless, any expense which is not covered by any available insurance could

customers is getting harsh. We have reinforced and enhanced our research andaffect business performance or the financial situation of the Group.

group standards. However, in the case that any defective products are found ordevelopment systems as well as our technical expertise with the aim of providing
high performance, high precision, and high quality products. We have also been
making our efforts to strengthen production and sales constantly towards supply(9) Risks from Natural Disastersof our product worldwide.

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

However, despite our such activities, market competition could have effect on

disasters such as earthquakes and floods. In the event of natural disasters, thebusiness performance.

Company would suffer from a stable supply to our customers and a temporary
massive burden of expense arising from a drop in sales and incurred for9(4) Impact on Automobile Industry

restoration.

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

system by establishing a production system in Japan and overseas including

Company does not belong to any members of specific car makers, but

back-up to overseas production bases, as well as examining risks for delivery of

unmanageable factors, such as a economy slump in automobile industries, poor

products etc through the Risk Management Committee activities.

business performance of client companey, damages caused by large-scale

In spite of these efforts, however, there is a possibility that a temporary

natural disasters, and changes in component procurement policy could affect us.

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

Although the Group have engaged in managerial improvement in order toincurred for restoration occur. It could affect our business performance.

maintain customer satisfaction for all clients including those in the automobile

Even if our production bases of the Group are not damaged, if major customers

industry, such changes may affect our business performance.

In preparation for such disasters, we are working to strengthen and enhance oursuffer catastrophic damage due to natural disasters, or if the supply chain is[Basic Policy]

disrupted or production is forced to cease, sales will be reduced, the decrease

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

could affect our business performance.

2. The Company strives to respect its shareholders’ rights and positions, and work
properly in harmony with its stakeholders (shareholders, customers,
employees, communities and so on).
3. The Company strives to disclose its corporate information timely and property,

5. Corporate Governanceand, thereby, secure transparency and fairness.
4. The Company strives to cause its board of directors meeting and so on fulfill(1) Basic Stance on Corporate Governanceproperly the functions and the responsibility, in light of its fiduciary
responsibility and accountability to its shareholders.

The Company considers corporate governance one of its topmost management

5. The Company strives to have constructive dialogues with its shareholders.

priorities, in order to secure the trust of its shareholders and fulfill its corporatesocial responsibilities.
In accordance with this basic philosophy, the Company strives to enhance its(2) Overview of the Corporate Governance Systembusiness productivity in prompt and flexible response to the changes in the

The Company has in place a Board of Directors comprising seven members, ofbusiness environment and the market, and for maintenance, the Company

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

addresses strengthening of supervisory function to management and thehas four members, of whom two are outside corporate auditors.

internal control in order to maintain and enhance its management efficiency and

The Board of Directors meets monthly to make decisions on important items andtransparency, and, thereby, enhance its corporate governance in accordance

supervise the execution of operations by directors.

with the following Basic Policy.

The Company employs an executive officer system.
By separating the functions of management decision-making and supervisionfrom operational execution, the Company aims to strengthen its operational
execution structure and bolster management efficiency.

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

ReportCooperation

Accounting auditor

Auditing

Board of Directors

Appointment,
removal

Accounting audits
Management,
supervision

Auditing

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

Cooperation

Instructions

Cooperation

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

Accounting audits

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

Appointment,
removalInternal audits

Executive officers/business departments, Group companies

10

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

Years ended March 31

ASSETS

Millions of yen

Thousands of U.S.dollers

2020

2019

2020

2019

Cash on hand and in banks¥31,360¥34,789$288,156$319,669

Trade notes and accounts receivable

14,687

15,433

134,955

141,812Merchandise and finished goods

12,983

12,812

119,297

117,725

Work in process

2,099

1,809

19,292

16,624

Raw materials and supplies

3,128

2,928

28,75026,909

Other

1,021

726

9,387

6,674

Allowance for doubtful accounts

(110)

(107)

(1,015)(992)

65,17068,391

598,824

628,423

Investment securities

10,04010,42492,262

95,787

Deffered tax assets

976

1,047

8,970

9,624

Other

345

328

3,176

3,019

Allowance for doubtful accounts

(18)

(9)

(167)

(82)

Total investments and long-term receivables

11,344

11,791

104,241

108,348

Buildings and structures

22,115

21,849203,211200,771

Machinery, equipment and vehicles

47,331

46,716434,909429,264

Tools, furniture and fixtures

14,964

14,659137,501

134,699

Land

3,930

4,268

36,12039,217

Leased assets

1,324

605

12,173

5,564

954

1,259

8,771

11,574

Subtotal

90,62189,359832,686

821,091

Accumulated depreciation(67,377)(67,596)(619,104)(621,123)

23,244

21,762

213,582

199,968

Software

1,118

10

10,280

95

Other

277

858

2,548

7,892

1,396

869

12,828

7,988¥101,154¥102,814$929,476$944,728

Current assets

Total current assets
Investments and long-term receivable

Property, plant and equipment

Construction in progress

Net property, plant and equipment
Intangible assets

Total Intangible assets
Total assets

11Years ended March 31

LIABILITIES AND NET ASSETS

Millions of yen

Thousands of U.S.dollers

2020

2019

2020

2019

Trade notes and accounts payable¥9,103¥9,519$83,647$87,467

Short-term loans payable

2,324

2,325

21,36021,365Current portion of long-term loans payable

2,200

1,580

20,215

14,518

Accounts payable-other

1,916

1,954

17,60817,962

Income taxes payable

652

867

5,992

7,969

Provision for bonuses

837

819

7,696

7,530

2,792

2,598

25,65923,873

19,826

19,664

182,180

180,687

Long-term loan payable

2,700

4,420

24,80940,613

Deferred tax liabilities

3,797

3,735

34,89434,324

Net defined benefit liability

1,581

1,585

14,53014,572

22

24

210

226

1,273

964

11,698

8,864

Total long-term liabilities

9,374

10,73086,142

98,601

Total liabilities

29,20130,395

268,323

279,289

Common stock

8,150

8,150

74,88974,889

Capital surplus

2,111

2,111

19,401

19,401Retained earnings

63,272

59,713581,384

548,682

Treasury stock(5,788)(3,320)(53,184)(30,513)

Total shareholders' equity

67,74566,654622,490

612,460

Valuation difference on available-for-sale securities

5,669

5,907

52,09454,277

Foreign currency translation adjustment(1,294)27(11,898)

256

Remeasurements of defined benefit plans

(166)

(169)

(1,533)(1,554)

Total accumulated other comprehensive income

4,207

5,765

38,662

52,979Total net assets

71,95372,419661,153

665,439¥101,154¥102,814$929,476$944,728

Current liabilities

Other
Total current liabilities
Long-term liabilities

Provision for directors' retirement benefits
Other

Shareholders' equity

Accumulated other comprehensive income

Total liabilities and net assets

12

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

Millions of yen

Thousands of U.S.dollers

2020

2019

2020

2019

Net sales¥71,051¥72,002$652,865$661,601

Cost of sales

49,20649,510452,137

454,929

Gross profit

21,84522,492200,727

206,671

Selling, general and administrative expenses

14,545

14,364

133,654

131,986

Operating income

7,299

8,127

67,072

74,684

Interest income

242

219

2,231

2,020

Dividends income

350

338

3,216

3,109

Foreign exchange gains

―

73

―

676

Other

290

453

2,671

4,168

Total non operating income

883

1,085

8,119

9,974

Interest expenses

57

19

528

182

Foreign exchange losses

210

―

1,938

―

Loss on disposal of fixed assets

91

55

840

513

Sales discounts

50

53

463

492

Other

112

138

1,036

1,268

Total operating expenses

523

267

4,807

2,458

7,659

8,945

70,38482,200Gain on sales of investment securities

154

―

1,423

―

Total extraordinary income

154

―

1,423

―

Impairment loss

―

69

―

639

Total extraordinary loss

―

69

―

639

Income before income taxes

7,814

8,876

71,807

81,561

Income taxes-current

2,141

2,384

19,675

21,914

Income taxes-deferred

208

334

1,917

3,072

2,349

2,719

21,592

24,986

Net income

5,464

6,157

50,21556,575

Income attributable to owners of parent¥5,464¥6,157$50,215$56,575

Non-operating income

Non-operating expenses

Ordinary income
Extraordinary income

Extraordinary loss

Income taxes

Total income taxes

Per share of common stock

13

Yen

U.S.dollers

Net income¥183.61¥203.50

$1.69

$1.87

Cash dividends¥54.00¥60.00

$0.50

$0.55

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

Millions of yen

Thousands of U.S.dollers

2020

2019

2020

2019

¥5,464¥6,157$50,215$56,575(237)(1,274)(2,182)(11,712)(1,322)

612(12,155)

5,631

2

153

21

1,413

Total comprehensive income(1,558)(507)(14,316)(4,666)Comprehensive income

3,906

5,649

35,89851,908

3,906

5,649

35,89851,908――――Net Income
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans(Details)
Comprehensive income attributable to owners of the parent
Comprehensive income attributable to non controlling interests

14

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

Years ended March 31
Current consolidated fiscal year (From April 1, 2019 to March 31, 2020)

Millions of Yen
Shareholders' equity

Balance at March 31, 2019

Commonstock

CapitalSurplusRetainedearnings

Treasurystock
at cost¥8,150¥2,111¥59,713(¥3,320)

Accumulated other comprehensive income
Total
Valuation
Foreign
Remeasurements
accumulated
Total share difference
currencyof defined benefit
otherholders'
on availabletranslationplanscomprehensive
equityfor-saleadjustment
incomesecurities¥66,654¥5,907¥27(¥169)¥5,765

Total net
assets¥72,419

Amount of changes during consolidated
accounting year
Dividends from retained earnings(1,906)(1,906)(1,906)

Profit attributable to owners of parent

5,464

5,464

5,464

(2,467)(2,467)Purchase of treasury stock(2,467)

Net changes of items other thanshareholders' equity
Total amount of changes duringconsolidated accounting year
Balance at March 31, 2020―
¥8,150―3,558(2,467)

1,091¥2,111 ¥63,272 (¥5,788) ¥67,745(237)(1,322)2(1,558)(1,558)(237)(1,322)2(1,558)(466)¥5,669 (¥1,294)(¥166)

Current consolidated fiscal year (From April 1, 2019 to March 31, 2020)

Thousands of U.S.dollers
Shareholders' equity

Balance at March 31, 2019

¥4,207 ¥71,953

Retainedearnings

Treasurystock
at costAccumulated other comprehensive income
Total
Valuation
Foreign
Remeasurements
accumulated
Total share difference
currencyof defined benefit
otherholders'
on availabletranslationplanscomprehensive
equityfor-saleadjustment
incomesecurities

Commonstock

CapitalSurplus$74,889$19,401 $548,682 ($30,513) $612,460$54,277$256($1,554)

Total net
assets$52,979 $665,439

Amount of changes during consolidated
accounting year
Dividends from retained earnings(17,514)(17,514)(17,514)

Profit attributable to owners of parent

50,21550,21550,215(22,670)(22,670)

Purchase of treasury stock(22,670)

Net changes of items other thanshareholders' equity
Total amount of changes duringconsolidated accounting year
Balance at March 31, 2020

15―
$74,889―

32,701(22,670)

10,030$19,401 $581,384 ($53,184) $622,490(2,182)(12,155)

21(14,316)(14,316)(2,182)(12,155)

21(14,316)(4,285)$52,094 ($11,898)($1,533)$38,662 $661,153

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

Years ended March 31

Millions of yen

Thousands of U.S.dollers

2020

2019

2020

2019

Profit (loss) before income taxes¥7,814¥8,876$71,807$81,561

Depreciation

3,324

3,012

30,54927,678

13

(15)

121

(146)

Operating activities:

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

91

158

840

1,454

(150)

(171)

(1,382)(1,573)

Increase (decrease) in provision for retirement benefits for directors (andother officers)

(1)

(3)

(15)

(33)

Increase (decrease) in provision for bonuses

27

22

254

209
(5,129)

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

Interest and dividend income

(592)

(558)

(5,448)Interest expenses

57

19

528

182

Foreign exchange losses (gains)

97

(33)

892

(306)

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

(27)

(29)

(250)

(274)

Loss on retirement of property, plant and equipment

91

55

840

513

Loss (Gain) on sales of investment securities

(148)

(0)

(1,367)(0)

Impairment loss

―

69

―

639

Decrease (Increase) in trade receivables

817

(464)

7,510

(4,272)(1,094)(1,045)(10,056)(9,607)

(32)

773

(299)

7,110

Increase (Decrease) in accrued consumption taxes

125

(25)

1,155

(237)

Decrease (Increase) in other current assets

(387)

26

(3,561)247

Decrease (Increase) in inventories
Increase (Decrease) in trade payables

Increase (Decrease) in other current liabilities

(298)

(80)

(2,741)(739)

Subtotal

9,726

10,58689,376

97,277

592

558

5,448

5,129

Interest and dividends received
Interest paid

(57)

(19)

(530)

(183)

(2,347)(2,359)(21,566)(21,678)

7,914

8,765

72,72780,545

Payments into time deposits(1,199)(3,445)(11,021)(31,662)

Proceeds from withdrawal of time deposits

5,125

270

47,093

2,485

Purchase of property, plant and equipment(4,367)(3,891)(40,130)(35,757)

Income taxes paid
Net cash provided by (used in) operating activities
Investing activities:

Proceeds from sales of property, plant and equipment

139

15

1,283

139

Purchase of investment securities

(4)

(4)

(43)

(41)

Proceeds from sales of investment securities

192

0

1,772

0

Other, net

(235)

(820)

(2,163)(7,538)(349)(7,876)(3,208)(72,374)

Net cash provided by (used in) investing activities
Financing activities:
Net increase (decrease) in short-term borrowings

1

1

10

13

Proceeds from long-term borrowings

600

3,900

5,513

35,835

Repayments of long-term borrowings(1,700)(948)(15,620)(8,710)Purchase of treasury shares(2,467)(5)(22,670)(46)

Dividends paid

(1,906)(1,573)(17,514)(14,456)

Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents

(736)

9

(6,762)89(6,208)1,384(57,045)

12,726(864)

301(7,942)

2,774

Net increase (decrease) in cash and cash equivalents

493

2,576

4,531

23,671

Cash and cash equivalents at beginning of period

30,65028,074

281,637

257,966

Cash and cash equivalents at end of period¥31,143¥30,650$286,169$281,637

16

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

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

2. Summary of Significant Accounting Policies(1) Scope of consideration(a) Number of consolidated subsidiaries: 22 companies.
(b) Nonconsolidated subsidiaries: 1
The above is unconsolidated and does not apply equity method as it isa small-scale and none of its total assets, net sales, net income or loss,
retained earnings or other items have a significant impact on
consolidated financial statements.
(2) Year-ends of consolidated subsidiaries
22 companies except for 2 companies located in China aligned thefiscal year with parent company (January - December fiscal yearchanged April-March fiscal year) and others prepare provisional
settlement of accounts so that consolidated financial statements is
prepared using financial statements at the same reporting date.
(3) Investment securities
Marketable securities:
They are carried at cost moving-average method and revaluated at fairvalue with changes in unrealized holding gain or losses.
Non-marketable securities:
They are carried at cost moving-average method.
(4) Evaluation of Inventories
Inventories held for the purpose of usual use:
Inventory is stated at the lower of cost determined by the grossaverage method or net realizable value.
(5) Depreciation of property, plant and equipment
Declining-balance method:
Buildings acquired on or after April 1, 1998, buildings and structuresacquired on or after April 1, 2016 and specific fixed assets (all fixed
assets in the office used for developing a production system andproducing prototypes) acquired by the Company and its domestic
consolidated subsidiary are depreciated by the straight-line method
over their estimated lives.
Fixed assets owned by foreign subsidiary companies are depreciatedby the straight-line method.
(6) Depreciation of intangible assets and deferred charges
Straight-line method.

17(7) Depreciation of leased assets(a) Lease assets related to ownership transfer finance lease transactions
Same method as depreciation method applied to self-owned fixed
assets.
(b) Lease assets related to ownership non-transfer finance leasetransactions
Straight-line method with the lease term as the useful life and theresidual value at zero.
(8) Accounting method for retirement benefits(a) Periodic allocation method for estimated benefit obligation
Upon calculating the retirement obligations, the method of attributing
expected benefit to periods until the end of fiscal year is projected unit
credit.
(b) Amortization of actuarial gains and loss and past service cost
Past service is recognized in profit or loss by straight-line method overa certain period within the expected average remaining working livesof employees (12- 15 years) in the year in which it arises.
Actuarial gain or loss is recognized in profit or loss by straight-line
method over a certain period within the expected average remaining
working lives of employees (12 - 15 years) from the next year in which
it arises.
(c) Application of simple method at small enterprises, etc.
Some domestic consolidated subsidiaries apply a simple method inwhich an estimated amount required to be paid for voluntary
retirement benefits is deemed as the retirement benefit obligations in
the calculations of net defined benefit liability and retirement benefit
expenses.
(9) Range of cash and cash equivalentsin the consolidated cash flow statement
Cash and cash equivalents include cash on hand, time deposit which
can be withdrawn on demand and highly liquid investments with amaturity of three months or less, which are readily to be convertible to
known amounts of cash which are subject to insignificant risk ofchanges in value.
(10) Calculation method of Per Share of Common Stock
Net income per share is computed by dividing net income available tocommon shareholders by the weighted-average number of commonshares outstanding for the year.
Cash dividends per share presented in the consolidated of income are
dividends attribute to the respective years including dividends to be
paid after the year-end.

3. Conversion to U.S. Dollars
Amounts in U.S dollars are shown solely for convenience and are
unaudited.The rate of ¥108.83 to U.S.＄1 on March 31, 2020,
approximate current rate has been used for the purpose ofpresentation of the accompanying consolidated financial statements
in U.S. dollars. These translations should not be construed as
representations that the yen amounts actually represent, or have beenor could be converted into, U.S. dollars at that or any other rate.

I In v e s t or In f o r m a t io n ( A s o f M a r c h 31, 2020)

Corporate data
Company Name:

Mitsuboshi Belting Ltd.

Established:

October 10, 1919

Common Stock:8,150 million yen

Fiscal Year-End:

March 31

Public Accounting Firm:

Ernst & Young ShinNihon LLC

Number of Employees:

727（Consolidated : 4,277）

Major shareholders(Top10)

Ownership breakdown
Number of shares held(Thousands)

Name

Japan Trustee Services Bank, Ltd.

3,006

The Master Trust Bank of Japan, Ltd.

1,514

MUFG Bank, Ltd.

1,170

Client stock ownership

948

STATE STREET BANK AND TRUST CLIENTOMNIBUS ACCOUNT OM02 505002

823

NORTHERN TRUST CO．(AVFC）RE FIDELITY
FUNDS

760

MITSUI & CO., LTD.

750

Mitsubishi UFJ Trust and Banking Corporation

686

DAIDO LIFE INSURANCE COMPANY

677

Employee stock ownership

617

Financial institutions/
D
Brokerages
30.1%
C

Individuals, etc.
36.3%

B
A

Foreign corporations
17.8%

Other corporate entities
15.8%

Stock price and trading volume on the Tokyo Stock Exchange

4

5

6

7

8

9

10 11 12

1

2

3

4

5

6

7

8

9

10 11 12

1

2

3

4

5

6

7

8

9

10 11 121

2

Stock Price
(¥)
3500

3

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

0

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

4

2017

5

6

7

8

9

10 11 12

1

2018

2

3

4

5

6

7

8

9

10 11 12

1

2

3

4

5

6

7

8

9

10 11 122019

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

1

2

3

2020

18

Kobe Head Office:4-1-21 Hamazoe-dori, Nagata-ku, Kobe 653-0024, Japan
Tel: +81-78-671-5071 / Fax: +81-78-685-5670
Tokyo Head Office:2-3-4, Nihonbashi Chuo-ku, Tokyo 103-0027, Japan
Tel: +81-3-5202-2500 / Fax: +81-3-5202-2520
www.mitsuboshi.com※ It is strictly prohibited to duplicate and/or modify part or all of this financial review regardless of the form.

Q14200102009UR01892B18