2021

F i n a n c i a l

R e v i e w

Year ended March 31,2021

I Ma n a g eme nt M e ssag e
In our more than 100-year history since ourfounding in 1919, we have continued ourp a s s i o n f o r m a n u f a c t u r i n g, a n d h a v econtributed to society by providing productsthat support people's lives while cherishing
our strong beliefs as a manufacturer.
T h e c u r r e n t s o c i o-e c o n o m i c s i t u a t i o ncontinues to be unstable, and the industrial
structure of the automobile industry andother industries is entering a new phase.
As the business environment surrounding ourcompany is constantly changing, we believethat excellent forward thinking that can

Chairman

Hajime Kakiuchi

President

Hiroshi Ikeda

accurately capture the trends of the times,s u c h a s c h a n g e s i n p e o p l e's t h i n k i n g,
lifestyles, and trends, will be an importantbase for our company.
In the future, major innovations will be required in business operations and technological development, but our groupof employees will work together to ensure that we continue to make progress one step at a time.
Looking ahead to the next 100 years, we will face reality and realize sustainable growth and transformation through ourbusiness activities to solve social issues based on the basic philosophy of "To Give Attentive Consideration to Both
Humanity and Nature", aiming for development into a prosperous future.

Board of Directors
Chairman

Hajime Kakiuchi
President

Hiroshi Ikeda
Member of the Board

Board of Corporate
Auditors

President, Executive Officer

Corporate Auditor

Hiroshi Ikeda(standing)

Senior Managing
Executive Officer

Kenkichi Masuda

Yoshio Yamaguchi

Corporate Auditor

Yoshio Yamaguchi

Yoshio Okushima

Member of the Board

Corporate Auditor

Masayoshi Nakajima

Yasuhiro Tsuji

Member of the Board

Corporate Auditor

Toshimi Kumazaki

Executive Officers

Senior Managing
Executive Officer

Masayoshi Nakajima
Managing Executive Officer

Toshimi Kumazaki

Jun Tanaka

Managing Executive Officer

Member of the Board

Keiji Mataba

Keiji Mataba

Vice-Senior Managing
Executive Officer

Takashi Sasaki

Vice-Senior Managing
Executive Officer

Shinji Kuramoto
Vice-Senior Managing
Executive Officer

Toru Shimomura

Executive Officer

Toshimichi Takada
Executive Officer

Naotsugu Morita
Executive Officer

Akihiro Nagata
Executive Officer

Nobuyasu Nishikawa

Managing Executive Officer

Executive Officer

Managing Executive Officer

Executive Officer

Kazutoshi Ishida

Kazuhiro Takeda

Isao Ideguchi
Masaru Matsui

Director, Member of the Board

Ryuzo Miyao（June 29, 2021）

Director, Member of the Board

Shinya Okuda

Contents

1

Management Message ����������

1

Consolidated Balance Sheets �������

13

Financial Highlights������������

2

Investor Information �����������

4

Consolidated Statements of Income /Comprehensive Income����������

15

News Release  ��������������

5

Global Network �������������

7

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

16

Business Overview ������������

9

Consolidated Statements of Cash Flows���17

Notes To Consolidated Financial Statements�

18

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

Millions of yen

2021

2020

2019

Power Transmission Belts(Japan)¥24,777¥27,266¥28,395

Power Transmission Belts(except Japan)

29,61132,49532,917

Building & Construction Materials

5,747

6,872

5,978

Others

4,726

4,417

4,710

Total

64,862

71,051

72,002

46.3%

46.3%

46.1%

Sales Business Segment :Exports sales ratio
Cost of sales¥45,868¥49,206¥49,510

Selling, general and administrative

14,025

14,545

14,364

Operating income

4,968

7,299

8,127

Income before income taxes

5,857

7,814

8,876

Income attributable to owners of parent

4,066

5,464

6,157

108,063

101,154

102,814¥139.84¥183.61¥203.50

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

57.00

54.00

60.00

Book value

2,691.63

2,474.56

2,393.66

Gross profit margin

29.3%

30.7%

31.2%

Operating income margin

7.7%

10.3%

11.3%

349.70%328.70%347.80%Capital expenditures

Current ratio¥3,669¥5,964¥3,259Depreciation expense¥3,972¥3,324¥3,012Equity ratio

72.4%

71.1%

70.4%

Long-term debt ratio against equity

13.0%

13.0%

14.8%

Number of shares outstanding (thousands)

32,60432,60432,604

Note: Income statement and balance sheet figure for the periods ended March 31, 2021, 2020, and 2019 were audited by Accounting Auditors and which are different from ones
disclosed in Tokyo Stock Exchange in consideration of expected readers.
・The Company performed a two-for-one share consolidation effective as of October 1, 2018.
Net assets per share and net income per share are calculated on the assumption that the share consolidation was performed at April 1, 2018.

Consolidated Statements of Income（Japanese Yen）
Net Sales

Operating income

Ordinary income

64,862mil

4,968mil

5,759milSales by Business
Building &Construction Materials
5,747milProfit attributableto owners of parent

4,066milOperating income by Business
Others4,726mil

D

7.3％
8.9％

A

64,862 mil

B

34.6％

B

D
C

Power Transmission
Belts(except Japan)
2,735mil

60.2％

APower Transmission
Belts(Japan)
4,762milPower Transmission
Belts(except Japan)
29,611mil

Total Sales

Others

3.7％ 1.5％ 123mil

Power Transmission
Belts(Japan) C
24,777mil

38.2％
45.6％

Building &Construction Materials
291milOperating income(before adjustment deduction)

7,913 mil2

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

Operating income
Operating income
Operating margin

8.7% decrease（Millions of yen）
80,00066,396from the previous year
69,59472,002

71,05160,000（Millions of yen）
9,000

64,8626,000

31.9% decrease
from the previous year

8,278

8,429

12.5

12.1

40,000

11.3

7,299
10.3

2017

2018

2019

2020

0

2021

Ordinary income

2017

2018

2019

2020

25.6% decrease

from the previous year
8,808

from the previous year

（Millions of yen）
9,000

8,945
7,659

5,759

6,000

6,000

3,000

6,663

6,252

6,157

5,464

3,000

0

2017

2021

Income attributable to owners of parent

24.8% decrease（Millions of yen）
9,000
8,487

4,968
7.7

3,000

20,000
0

8,127

2018

2019

2020

0

2021

Total assets & Equity ratio

2017

2018

2019

2020

72,41971,953

2019

2020

4,066

2021

Total net assets

Total assets
Equity ratio（Millions of yen）
120,000

80,000

89,91270.2

95,802

102,814

71.3

70.4

101,15471.1

108,063
72.4

40,000

0

2017

2018

2019

2020

2021

（％）
80

（Millions of yen）
90,00070

60,00060

30,0000

0Cash dividends & Payout ratio

63,136

68,3482017

2018

78,2642021

EPS(Earnings Per Share)

Cash dividends
Payout ratio
（Yen）
90

40,8

60

30

0

44

20.3

2017

29.5

24.2

60

50

2018

29.4

30

54

57

2019

2020

2021

7.5

6.7

2018

206.65203.50183.61139.84

0

60
0

2017

10.8

9

6.2

5.4

3

2017

216.29

180

（％）
12

6

3

240

2018

2019

2020

2021

ROE(Return On Equity)

（％）
12

0

（Yen）

120
15

ROA(Return On Assets)

9

（％）
45

2019

2020

3.9

2021

9.5

8.7

7.6

5.4

6
3
0

2017

2018

2019

（％）
15

2020

2021

10

5

0

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, 2021)

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:

729（Consolidated : 4,271）

Major shareholders(Top10)

Ownership breakdown
Number of shares held(Thousands)

Name

Custody Bank of Japan, Ltd.

3,047

The Master Trust Bank of Japan, Ltd.

1,757

MUFG Bank, Ltd.

1,170

Client stock ownership

966

STATE STREET BANK AND TRUST CLIENTOMNIBUS ACCOUNT OM02 505002

800

NORTHERN TRUST CO．(AVFC）RE FIDELITY
FUNDS

760

MITSUI & CO., LTD.

750

Mitsubishi UFJ Trust and Banking Corporation

686

NIPPON ACTIVE VALUE FUND PLC

650

Employee stock ownership

635

Financial institutions/
D
Brokerages
29.3%
C

Individuals, etc.
35.6%

B
A

Foreign corporations
19.8%

Other corporate entities
15.3%

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

2018

5

6

7

8

9

10 11 12

1

2019

2

3

4

5

6

7

8

9

10 11 12

1

2

3

4

5

6

7

8

9

10 11 122020

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

1

2

3

2021

4

I Ne w s R e le a s e

Mid-Term Business Plan（FY2021-2023)
The Mitsuboshi Group will strive to establish a more solid management base with our strength in technological capabilities and pricecompetitiveness, along with taking the initiative in realization of a sustainable society, adhering to the corporate philosophy of “to giveattentive consideration to both humanity and nature” and the motto of “produce quality and sell quality".
We take advantage of information technology and try to reduce environmental impact through business operations in an eﬀort to minimize
eﬀects of unavoidable circumstances such as natural disasters.
As the financial targets, we aim to achieve net sales of 75.0 billion yen in FY2023 by organizing aggressive sales promotion worldwide.

Financial target
Sales
Operating proﬁt

70.0
7.3

Sales
Operating proﬁt

FY2021

73.0
8.0

Sales
Operating proﬁt

FY2022

FY202375.0
8.3(billion yen)Exchange rate: USD = ¥105 EUR = ¥115
For operating profit margin, we aim to secure 11% or more with united eﬀorts of all the Mitsuboshi Group
employees to strengthen the profitable structure of the company.

Return of proﬁts to shareholders◦Dividend per share: 54 yen or more (Consolidated dividend payout ratio of 35%)
◦Average consolidated total return ratio for the three-year period: 50%

Capital investment plan
Total amount of capital investment 15.0 billion yen

Strengthening of sales structure

5

Automotive industry

General industry◦Expand sales of belts for motorcycles and utility vehicles as well
as for passenger vehicles◦P r o m o t e r e l a t e d s y s t e m
products◦Expand aftermarket sales◦Develop new products for large & high-speed agricultural
machinery◦Develop new products forindustrial robots and electric
injection machines

Conveyor belts & systems

Engineering plastics◦Develop new products for food industry and logistics industry.
◦Expand sales of light conveyor belts and FREESPAN belts◦Expand sales of high-performance materials and processed
products◦Upgrade the existing products
and develop new products

Construction materials
Roofing:◦Expand sales in the metal roofing restoration market◦Develop eco-friendly products and labor-saving products
Civil engineering:◦Expand sales in the market of waste material disposal sites/
agricultural civil work/rivermanagement

Electronic materials◦Develop new applications of silver nano particles/conductive
paste/metallized ceramic substrates◦D evelop new products for automobile components andinformation equipment

Other Policy
Strengthening of production structure

Strengthening of capacity for technological development◦Review the production capacity of all the production sites andestablish optimal production structures.
◦Enhance cost competitiveness and improve product quality
through development of innovative production methods,
including utilization of IoT and AI.

◦I mprove technological development skills by developing
information literacy skills.
◦Conduct training on effective problem solving methods for
improvement of technical capabilities.

Securing and training of human resources

Strengthening of quality control and environmental management system◦R eform the management system and secure competenthuman resources.
◦Implement work style reform to allow employees to choose
flexible work styles.

◦S trengthen the structure of quality control system andenvironmental management system in order to eliminate
customer complaints.
◦Maintain ISO9001, IATF16949 and ISO14001 certifications.

Maintenance of workplace

Promotion of SDGs

◦Perform maintenance on buildings and facilities in terms ofbusiness continuity planning from a longterm perspective.

◦Contribute to society through business activities◦CO₂ emission reduction target (from 2013 level) 2023 - 20% ormore / 2030 - 35% / 2050 - Carbon neutral

Promotion of SDGs (Detail)Mitsuboshi Belting Group (the Group) agree SDGs put forward by United Nations and contribute to the realization of a sustainable society throughcorporate activities.
The Group has set 6 of our 17 goals as our main goals.
Based on 100 years of history, the Group aims for a more sustainable future.

【 6 goals have been set 】

6

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 SHANGHAIINTERNATIONAL
TRADING CO., LTD.
SUZHOU MITSUBOSHIBELTING CO., LTD.

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

MITSUBOSHIBELTING-INDIA
PRIVATE LIMITED

PT. MITSUBOSHI BELTING INDONESIA
PT. MITSUBOSHI BELTING SALES INDONESIA

PT. SEIWA INDONESIA

PT. SEIWA INDONESIA
MITSUBOSHI BELTING-INDIA
PRIVATE LIMITED

7

PT. MITSUBOSHIBELTING SALESINDONESIA
PT. MITSUBOSHI BELTING
INDONESIAMBL SHANGHAI INTERNATIONAL
TRADING CO., LTD.

SUZHOU MITSUBOSHI BELTING CO., LTD.

MBL (USA) CORPORATIONKOBE HEAD OFFICE

MOI TECH
HONG KONG LIMITEDTOKYO HEAD OFFICE
MOI TECH HONG KONG LIMITEDMITSUBOSHI BELTING VIETNAM CO., LTD.
STARS TECHNOLOGIES INDUSTRIAL LIMITEDMITSUBOSHI OVERSEAS
HEADQUARTERS PRIVATE LIMITEDMITSUBOSHI BELTING
VIETNAM CO., LTD.
…Plant & Sales Office…Plant…Sales office

MITSUBOSHI OVERSEAS
HEADQUARTERS PRIVATELIMITEDSTARS TECHNOLOGIESINDUSTRIAL LIMITEDMITSUBOSHI BELTING LTD. GROUP8

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 has suffered a significant decline ofCash flow from operating activities achieved an income of 8,612 million yen,corporate profits and deterioration of employment environment to spread ofwhich was an increase of 698 million yen over the previous fiscal year.

COVID-19. However, although there are industry disparities, economic activity

Major factors for this increase are that while profit before income taxes

gradually returned while taking measures against infection, and there was adecreased by 1,957 million yen, inventories decreased by 1,504 million yen andmovement toward recovery in production and personal consumption.

other current assets decreased by 758 million yen compared to the previous

In global economies, demand recovered globally in the second half of the year,

fiscal year.

driven by China, which recovered quickly.

Cash flow from investing activities resulted in expenditure of 3,071 million yen,

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

which was a decrease of 2,722 million yen over the previous fiscal year.

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

Major factors for this decrease are that while payments into time deposits

on infection prevention measures and personal safety and employment

decreased by 1,196 million yen, but proceeds from withdrawal of time deposits

maintenance of employees, while working to maximize sales and profits.

by 4,871 million yen compared to the previous fiscal year.

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

Cash flow from financing activities resulted in expenditure of 4,104 million yen,of 64,862 million yen (8.7% decrease compared to the previous fiscal year),which was an increase of 2,104 million yen compared to the previous fiscal year.

the operating income of 4,968 million yen (31.9% decrease compared to the

Major factors for this increase are that while proceeds from long-term

previous fiscal year), the ordinary income of 5,759 million yen (24.8% decrease

borrowings by 600 million yen and purchase of treasury shares decreased bycompared to the previous fiscal year) and the income attributable to owners of

2,467 million yen compared to the previous fiscal year.

parent was 4,066 million yen (25.6% decrease compared to the previous fiscal

After add the eﬀect of exchange rate change on cash and cash equivalents ofyear).

1,160 million yen to the total amount of cash flows through operating, investing

The performance of the segment is as follows.

and financing activities, an increase of cash and cash equivalents of 2,597 million
yen. In addition, as a result of adding the opening balance of 31,143 million yen
to this, the balance of cash and cash equivalents at the end of this fiscal year was
33,741 million yen.

Power Transmission Belts
Sales and Operating Income（Japan）●Business of Power Transmission Belts（Japan）

66

I

6,000
5,500

24
,

77

7

I

I

23,000

5,000

I

4,500

I

24,000I

4,76
2

25,000I

segment stood at 4,762 million yen (26.6% decrease compared to the previous fiscal year).

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 24,777 million yen (9.1%

6,500

I

due to slow production activity of companies in Japan throughout the period.

27,000

7,000

6,
48
6

decreased due to the large decline in the first half of the period.
And sales of industrial belts, conveyor belts and engineering plastics materials also decreased

Millions of yen(Income)I

28,000I

aftermarket are on the rise as the recovery of customers' production, but sales amountMillions of yen(Sales)27,2

In automotive belts, sales volume of belts for installed car production line and belts for■ Total Sales

33,000

4,500

44
6
3,

3,500

I

I

31,0004,000

I32,000China, and orders have increased significantly compared to the beginning of the fiscal year.
And in industrial belts, sales increased because of recovering the demand to belts for theMillions of yen(Income)I

However, since the third quarter, demand for belts for automotive has recovered in the U.S. andMillions of yen(Sales)Ieach country at the beginning of the fiscal year.

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

I

decreased due to the stagnation of economic activity caused by lockdowns implemented by■ Operating Income

49
5

In the global business (except Japan) of power transmission belts, sales of the entire business

4,000

32
,

●Global Business (except Japan) of Power Transmission Belts

2021

I

2020

28,000

3,000

I

2,500

I

29,000I

As a result, the consolidated net sales by this segment stood at 29,611 million yen (8.9%

2,
73
5

29
,

production of office equipment.

I

30,000I

On the other hand, sales of belts for OA equipment decreased due to the effect of decreased

61
1agricultural machineries in China and Southeast Asia.

decrease compared to the previous fiscal year) while the consolidated operating income by this2020
■ Total Sales

2021■ Operating Income

2,000

I

9

segment stood at 2,735 million yen (20.6% decrease compared to the previous fiscal year).

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

3. Summary of Investment in Plant andEquipment

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

Regarding 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, the Group invested total 3,669 million yen by ourfundamental technologies and to positively use simulation technologies forown capital. For instance, expanding the manufacturing facilities of system for

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

automotive installation of new belt construction method line, preparing the millcustomers' demand which is diverse and changeable in a timely manner.

facilities and information core system.

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, the Group is pursuing joint
research with universities and public research institutes as well as joint
development with other companies under a close tie-up and cooperation, forthe purpose of carrying out research eﬀectively and developing a cutting edge
technology.
The total R&D expenses of the Group for this fiscal year was 2,671 million yen.
The total R&D expenses included the basic research expenses of 771 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
Millions of yen(Sales)

I

26
1

2,000

I

1,000

I

0

300

I

200

I

3,000

I

100

I

segment stood at 291 million yen (11.7% increase compared to the previous fiscal year).

29
1

I

74
7

I

4,000

5,

5,000

construction properties such as waste disposal sites and a reduction in scale.

I

delayed, and in civil engineering sector, sales decreased due to the effect of a decrease in

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

400

I

6,000

I

In the construction sector, orders and progress for rooftop waterproofing repair work wereAs a result, the consolidated net sales by this segment stood at 5,747 million yen (16.4%

6,
8

72

7,000

500

I

I

●Business of Building & Construction Materials

Millions of yen(Income)

8,000■ Total Sales

2021

0

I

2020

■ Operating Income

OthersSales and Operating Income

4,
41
7

I

250

I

4,000

300

I

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

5,000

I

●Other Businesses

Millions of yen(Income)4,
72
6Millions of yen(Sales)nanoparticles machinery and equipment and purchased products, etc.

150

12
3

I

2,000

I
100

I

0

I

50

I

1,000

55

I

segment stood at 123 million yen (123.4% increase compared to the previous fiscal year).

200

I

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

3,000

I

As a result, the consolidated net sales by other businesses stood at 4,726 million yen (7.0%■ Total Sales

2021■ Operating Income

0

I

2020

10

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

4. Risks to the Businesspreparations for purchasing from multiple companies so that important materials

Listed below are the various risks that our president recognises it's possible tobusiness partners. Also, we request our business partners to formulate a BCP.

affect significantly to consolidated company's financial statement, business

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

performance and cash flow.

possibility that a rapid rise in market price of major raw materials could skyrocket

Note that matters pertaining to the future presented herein are determined bymanufacturing costs. Moreover, stable and efficient procurement of raw

us as of the end of fiscal year.

materials from overseas and supply of raw materials to overseas affiliatedand processed products do not become excessively dependent on specificcompanies could be interfered by changes export/import restrictions, etc.

(1) Economic Status

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

The Group develops, manufactures and provides functional components

business performance.

principally in the automobile, general engineering, agricultural machines, IT andconstruction industries. Our main markets are Japan, Asia, U.S. and Europe, etc.
The change in demand from various industries and the economic status aroundor procurement costs continue to rise extremely, it may have a impact on our(5) Exchange Rate Fluctuation

the world could affect us adversely.

The Group manufactures and sells its products mainly in Japan, Asia, U.S. and

The Group distributes our main products, power transmission belts, to theEurope, etc. Exchange rate fluctuations may have a strong influence on

industries above. Low demand or a reduction in equipment investment in eachtransactions denominated in foreign currencies involving export in each area andcompany could cause our market to shrink and have a detrimental impact on ourforeign assets and liabilities such as deposit, account receivable and loans.

performance as well.

When preparing our consolidated financial statements, exchange rates used toApproximately 75% of power transmission belts sold by our company areconvert into Japanese Yen have a influence on its value denominated in

manufactured in other countries. As the Group is expected to be more

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

dependent on overseas manufacturing in the future due to growing global

Appreciation of the yen against other currencies, especially the U.S. dollars andeconomy, a sluggish global economy could negatively affect our operating

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

performance.

The Group has taken as many effective measures to reduce or avoid theWar, terror, riots, disaster like earthquake, epidemic could strike a sharp blow on

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

economy. Slowdown in demand could be expected during the event. Our

not be cleared in the short term, it may affect our business performance and aproblem is that the Group may have difficulty procuring materials and products

decrease in asset value potentially.

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.

(6) O fficial Restrictions on Businesses in Japan andOverseas
In the countries where our businesses operate, the Group is exposed to a varietyof regulations on export/import controls, custom duty, and business investment,(2) Abnormal Situation due to COVID-19

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

The Group manufactures and provides products for various industries mainly inrecycling. If our business activities are not able to accommodate quickly andJapan, Asia, the U.S. and Europe, etc. So, in the situation that spreads and affects

flexibly to these business environments, it would rise costs and compel us toall over the world such as COVID-19, the global economic activities may stagnate,

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

and the financial statement and business performance of the Group may beaffected.
In this situation, the Group has established COVID-19 countermeasures

rights, tax, and the environmental regulation including waste disposal and(7) Product Quality

headquarters, reviewed working systems and positive promoted teleworking. In

In order to maintain and improve the product quality of the Group, we haveaddition, through the activities of the Risk Management Committee, we will work

established a strict standards based on customer demand standards and theto minimize business risk by standardizing the infection spread prevention

Group's standards. However, in the case that any defective products are found or

manual and formulating a BCP. Also, we will enhance the communication system

customer complaints are received, we enrolled in insurance to minimize losses.

with customers to construct better structure and promote the business activity

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

even in serious situation.

affect business performance or the financial situation of the Group.

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

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

The Group's production bases could be subject to a catastrophic loss caused byGroup does not belong to any members of specific car makers, butnatural disasters such as earthquakes and floods. In the event of natural disasters,

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

the Group would suffer from a stable supply to our customers and a temporary

business performance of client Company, damages caused by large-scale natural

massive burden of expense arising from a drop in sales and incurred fordisasters, and changes in component procurement policy could affect us.

restoration.

Although the Group have engaged in managerial improvement in order to

In preparation for such disasters, we establish a production system in Japan andmaintain customer satisfaction for all clients including those in the automobile

overseas including back-up to overseas production bases. In addition, throughindustry, such changes may affect our business performance.

the Risk Management Committee activities, we considers the way to avoid risks

Regarding the progress of electrification, the Group is constantly watching thefor product delivery, and can supply products to customers as soon as possible

trends and considering the decrease in demand of belts for internal combustion

after a large-scale accident or disaster occurs and works to strengthen andengine as a medium to long term risk, and is taking measures.

enhance our system.
In spite of these efforts, however, there is a possibility that a temporary

11(4) Material Procurement

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

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

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

and resin which are essential for product manufacturing. We procure thesesuffer catastrophic damage due to natural disasters, or if the supply chain ismaterials from diverse suppliers considering a stability, price and quality. Throughdisrupted or production is forced to cease, sales will be reduced, the decrease

the activities of the Risk Management Committee, the Group is making

could affect our business performance.

incurred for restoration occur. It could affect our business performance.

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

The Company considers corporate governance one of its topmost management

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

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

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

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

Directors make decisions on important items and supervise the execution ofbusiness productivity in prompt and flexible response to the changes in theoperations by directors. Regarding important items, we hold a managementbusiness environment and the market, and for maintenance, the Company

meeting to hold sufficient prior discussions before the meeting of the Board ofaddresses strengthening of supervisory function to management and the

Directors.

internal control in order to maintain and enhance its management efficiency andAs an arbitrary mechanism, Nomination and Remuneration Advisory Committee

transparency, and, thereby, enhance its corporate governance in accordancehas been set up with aim of strengthening the independence, objectivity andwith the following Basic Policy.

accountability of the functions of the Board of Directors regarding theappointment, dismissal, compensation, etc. of the management team.

[Basic Policy]

The committee is a voluntary advisory board consisting of three or more

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

members, the majority of whom are independent outside directors.

shareholders’ equality.

The Company employs an executive officer system.

2. The Company strives to respect its shareholders’ rights and positions, and work

By separating the functions of management decision-making and supervision

properly in harmony with its stakeholders (shareholders, customers,from operational execution, the Company aims to strengthen its operational

employees, communities and so on).

execution structure and bolster management efficiency.

3. The Company strives to disclose its corporate information timely and property,
and, thereby, secure transparency and fairness.
4. The Company strives to cause its board of directors meeting and so on fulfill
properly the functions and the responsibility, in light of its fiduciary
responsibility and accountability to its shareholders.
5. The Company strives to have constructive dialogues with its shareholders.

Governance Structure
General Meeting of Shareholders

Board of Directors

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

Appointment,
removalReporting
Cooperation

Accounting audits

Accounting auditor

consult

Appointment,
removal（Ernst & Young ShinNihon LLC）

Appointment,
removalAuditing・
Monitoring

Auditing

Management,
supervision

Cooperation

Representative directors
Management Council
Risk Management
Committee
Compliance Committee
SDGs Promotion
Committee
Information Security
Committee

ReportingInstructions

Product Development
Council
Quality Assurance
Council

Cooperation

Audit depertment

Health, Safety andEnvironment Council
Technology Committee

Accounting audits
Internal audits

Work Style Reform
Promotion Committee

Executive officers/business departments, Group companies

12

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.dollars

2021

2020

2021

2020

Cash on hand and in banks¥33,771¥31,360$305,045$283,263

Trade notes and accounts receivable

15,938

14,687

143,966

132,663

Merchandise and finished goods

12,944

12,983116,922

117,271

Work in process

2,014

2,099

18,196

18,965

Raw materials and supplies

3,364

3,128

30,39328,262

Other

825

1,021

7,452

9,228

Allowance for doubtful accounts

(107)

(110)

(973)

(998)

68,751

65,170621,003588,655

Investment securities

13,245

10,040

119,643

90,695

Deffered tax assets

1,029

976

9,297

8,818

Other

393

345

3,555

3,122

Allowance for doubtful accounts

(18)

(18)

(164)

(164)

Total investments and long-term receivables

14,65011,344132,332

102,471

Buildings and structures

22,25022,115200,975

199,760

Machinery, equipment and vehicles

49,98847,331

451,525

427,523

Tools, furniture and fixtures

15,627

14,964

141,154

135,166

Land

3,943

3,930

35,61635,507

Leased assets

1,487

1,324

13,433

11,966

Construction in progress

1,103

954

9,971

8,622

Subtotal

94,39990,621

852,677

818,546

Accumulated depreciation(70,887)(67,377)(640,302)(608,591)

23,511

23,244

212,374

209,955

Software

1,090

1,118

9,852

10,105

Other

59

277

534

2,504

1,149

1,396

10,386

12,610¥108,063¥101,154$976,097$913,693

Current assets

Total current assets
Investments and long-term receivable

Property, plant and equipment

Net property, plant and equipment
Intangible assets

Total Intangible assets
Total assets

13Years ended March 31

LIABILITIES AND NET ASSETS

Millions of yen

Thousands of U.S.dollars

2021

2020

2021

2020

Trade notes and accounts payable¥8,716¥9,103$78,735$82,226

Short-term loans payable

2,325

2,324

21,002

20,998

900

2,200

8,129

19,871

Accounts payable-other

2,264

1,916

20,451

17,309

Income taxes payable

681

652

6,154

5,891

Provision for bonuses

886

837

8,009

7,566

3,884

2,792

35,08325,223

19,65819,826

177,566

179,087

Long-term loan payable

1,800

2,700

16,25824,388Deferred tax liabilities

4,823

3,797

43,56534,302Retirement benefit liability

1,999

1,581

18,056

14,283

26

22

238

206

1,492

1,273

13,482

11,499Total long-term liabilities

10,141

9,374

91,602

84,679Total liabilities

29,79929,201

269,168

263,766

Share capital

8,150

8,150

73,61873,618

Capital surplus

2,111

2,111

19,07019,071Retained earnings

65,76863,272594,057

571,511

Treasury stock(5,788)(5,788)(52,286)(52,280)

Total shareholders' equity

70,241

67,745

634,459

611,920

7,983

5,669

72,10951,210Foreign currency translation adjustment

247(1,294)

2,238(11,696)

Remeasurements of defined benefit plans

(207)

(166)

(1,878)(1,507)

Total accumulated other comprehensive income

8,023

4,207

72,46938,005

Total net assets

78,264

71,953706,929

649,926¥108,063¥101,154$976,097$913,693

Current liabilities

Current portion of long-term loans payable

Other
Total current liabilities
Long-term liabilities

Provision for retirement benefits for directors
Other

Shareholders' equity

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

Total liabilities and net assets

14

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 e / C om pr e h e n si v e Inc o m eYears ended March 31

Millions of yen

Thousands of U.S.dollars

2021

2020

2021

2020

Net sales¥64,862¥71,051$585,876$641,778

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

45,86818,993
14,025
4,968

49,206
21,845
14,545
7,299

414,311
171,564
126,687
44,876444,459
197,318
131,384
65,933

84
341
152
544
1,123

242
350
―
290
883

761
3,088
1,377
4,922
10,149

2,193
3,162
―
2,626
7,981

59
―
96
45
131
332
5,759

57
210
91
50
112
523
7,659

538
―
869
411
1,184
3,004
52,022

519
1,905
826
455
1,019
4,725
69,189

97
97
5,857

154
154
7,814

883
883
52,905

1,398
1,398
70,588

1,876
(85)
1,791
4,066
¥4,066

2,141
208
2,349
5,464
¥5,464

16,950(772)
16,17836,727$36,727

19,3401,884
21,22549,363$49,363

Non-operating income
Interest income
Dividends income
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Loss on retirement of non-current assets
Sales discounts
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales 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

Thousands of U.S.dollars

2021

2020

2021

2020

Profit¥4,066¥5,464$36,727$49,363

Other 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

2,313
1,542
(41)
3,815

(237)
(1,322)2(1,558)20,89913,935(371)
34,463(2,145)(11,948)20(14,073)

7,881

3,906

71,19035,289

7,881
―

3,906
―

71,190―35,289―Comprehensive income(Details)
Comprehensive income attributable to owners of the parent
Comprehensive income attributable to non controlling interests

15

Millions of yen

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, 2020 to March 31, 2021)

Millions of Yen
Shareholders' equity

Balance at March 31, 2020

Accumulated other comprehensive income

SharecapitalCapitalSurplusRetainedearnings

Treasurystock¥8,150¥2,111¥63,272(¥5,788)

Total
Valuation
Remeasurements
Foreignaccumulated
Total share differenceof definedcurrency
otherholders'
on availabletranslation benefit plans, netcomprehensive
equityfor-saleof taxadjustment
incomesecurities¥67,745¥5,669(¥1,294)(¥166)¥4,207

Total net
assets¥71,953

Changes during period
Dividends of surplus(1,570)(1,570)(1,570)

Profit attributable to owners of parent

4,066

4,066

4,066

(0)

(0)

―

―

Purchase of treasury shares(0)Change in scope of consolidation(0)0

Net changes in items other thanshareholders' equity
Total changes during period―

Balance at March 31, 2021

¥8,150

2,313

1,542

(41)

3,815

3,815

2,495

2,313

1,542

(41)

3,815

6,310

¥2,111 ¥65,768 (¥5,788) ¥70,241¥7,983¥247(¥207)

(0)

2,496

(0)

Current consolidated fiscal year (From April 1, 2020 to March 31, 2021)

Thousands of U.S.dollars
Shareholders' equity

Balance at March 31, 2020

¥8,023 ¥78,264

Retainedearnings

Accumulated other comprehensive income

Treasury
stock

Total
Valuation
Remeasurements
Foreignaccumulated
Total share differenceof definedcurrency
otherholders'
on availabletranslation benefit plans, netcomprehensive
equityfor-saleof taxadjustment
incomesecurities

SharecapitalCapitalSurplus$73,618$19,071 $571,511 ($52,280) $611,920$51,210 ($11,696)($1,507)

Total net
assets$38,005 $649,926

Changes during period
Dividends of surplus(14,182)(14,182)(14,182)

Profit attributable to owners of parent

36,72736,72736,727

(5)

(5)

―

―

Purchase of treasury shares(5)

Change in scope of consolidation(0)0

Net changes in items other thanshareholders' equity
Total changes during period―

Balance at March 31, 2021

$73,618

20,89913,935(371)

34,463

34,463

22,53920,89913,935(371)

34,46357,002$19,070 $594,057 ($52,286) $634,459$72,109$2,238($1,878)(0)22,545(5)$72,469 $706,929

16

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.dollars

2021

2020

2021

2020

Profit (Loss) before income taxes¥5,857¥7,814$52,905$70,588

Depreciation

3,972

3,324

35,88330,031

(3)

13

(34)

119

Operating activities:

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

277

91

2,510

825

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

(73)

(150)

(660)

(1,358)

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

3

(1)

32

(15)

Increase (Decrease) in provision for bonuses

38

27

346

250

Interest and dividend income

(426)

(592)

(3,849)(5,355)Interest expenses

59

57

538

519

Foreign exchange losses (gains)

(57)

97

(517)

877

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

(3)

(27)

(35)

(246)

Loss on retirement of property, plant and equipment

96

91

869

826

Loss (Gain) on sales of investment securities

(97)

(148)

(883)

(1,344)

Decrease (Increase) in trade receivables

220

817

1,992

7,382

Decrease (Increase) in inventories

410(1,094)

3,708(9,885)

Increase (Decrease) in trade payables

(984)

(32)

(8,892)(294)

Increase (Decrease) in accrued consumption taxes

(127)

125

(1,149)1,135

Decrease (Increase) in other current assets

371

(387)

3,358

(3,501)

Increase (Decrease) in other current liabilities

288

(298)

2,606

(2,695)

Other, net

296

—

2,679

—

Subtotal

10,1199,726

91,40987,859

426

592

3,849

5,355

Interest and dividends received
Interest paid

(59)

(57)

(540)

(521)

(1,873)(2,347)(16,922)(21,200)

8,612

7,914

77,796

71,492

Payments into time deposits(3)(1,199)(27)(10,834)

Proceeds from withdrawal of time deposits

254

5,125

2,297

46,294Purchase of property, plant and equipment(3,718)(4,367)(33,585)(39,449)

Proceeds from sales of property, plant and equipment

254

139

2,296

1,262

Purchase of investment securities

(36)

(4)

(329)

(42)

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

Proceeds from sales of investment securities

266

192

2,408

1,742

Other, net

(88)

(235)

(803)

(2,126)(3,071)(349)(27,743)(3,153)

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

(1)

1

(14)

9

Proceeds from long-term borrowings

—

600

—

5,419

Repayments of long-term borrowings(2,200)(1,700)(19,871)(15,355)(0)(2,467)(5)(22,285)(1,570)(1,906)(14,182)(17,216)

Purchase of treasury shares
Dividends paid
Other, net

17

(331)

(736)

(2,997)(6,648)Net cash provided by (used in) financing activities(4,104)(6,208)(37,071)(56,076)

Effect of exchange rate change on cash and cash equivalents

1,160

(864)

10,480(7,807)

Net increase (decrease) in cash and cash equivalents

2,597

493

23,4604,454Cash and cash equivalents at beginning of period

31,14330,650281,310

276,855

Cash and cash equivalents at end of period¥33,741¥31,143$304,770$281,310

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: 21 companies.
(b) Nonconsolidated subsidiaries: 2
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
21 companies except for 2 companies located in China aligned thefiscal year with parent company (January - December fiscal yearchanged April-March fiscal year) and others prepare provisional
settlement of accounts so that consolidated financial statements is
prepared using financial statements at the same reporting date since
preceding fiscal year.
(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.
(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 ¥110.71 to U.S.＄1 on March 31, 2021,
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.

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.

Q15100102108UR01927B53