Annual Report 2016
Year ended March 31, 2016

Breakthroughsfor the Future

Profile

Management Philosophy

In the 110-year since its founding in Japan in 1906, Bando Chemical Industries, Ltd. has
been pursuing industrial development by making various contributions to rubber and plastic
processing technologies in such areas as power transmission belts and systems, belts used inprecision equipment, and multimedia parts made from urethane and resins.

With a spirit of harmony and in good faith, and to ensure the company’s growth,
the Bando Group will work to earn the trust of our customers and society bycreating and providing products and services of added value and high quality. With
pride as members of the Bando Group, we will contribute to society as a whole.

We are highly regarded by customers throughout the world owing to our efforts to develop
new technologies and products that meet today’s needs while manufacturing and stably supplying people- and environmentally-friendly products of unsurpassed performance and quality.
Possessing an unwavering spirit spanning back to our foundation, we will create a brighter
future through the ceaseless innovation of our business.

Based on our Management
Philosophy, we are focused onContents

Mid-to-Long Term Business Plan
Financial Section

ProfileThe Value We Create

2

Snapshot

10

Products

12

History

14

Global Network

16

Highlights

18

Message from the President

22

Review of Operations

30

CSR

34

Corporate Governance

36

Message from an External Director

42Management

43

44

Management’s Discussion and Analysis

47

Business Risks

48

Consolidated Balance Sheets

44

50	Consolidated Statements of Income andConsolidated Statements of Comprehensive Income
51

Consolidated Statements of Changes in Net Assets

52

Consolidated Statements of Cash Flows

Corporate Data, Investor Information

53“Breakthroughs for the future.”

Mitsutaka Yoshii
President and Representative Director,
Bando Chemical Industries, Ltd.

See the Message from the President on page 22

Cautionary Statements
This annual report includes forward-looking statements related to the Company’s future
performance forecasts. These statements are rationally determined by management
based on information available at the time and therefore are subject to risk and uncertainty. Actual performance may differ from targets due to such factors as changes in theoperating environment.
The Company’s financial statements in English have not been audited by independent
auditors. However, the original Japanese financial statements on which they are based
have been audited by independent auditors. For more detailed information including
notes to consolidated financial statements, please refer to the Company’s Annual Reporton the website:
http://www.bando.co.jp/eng/ir/library/annual.html

1The Value We Create

In the Automotive Industry
As the automotive industry continues to enjoy robust growth,
the move toward more ecologically sound vehicles andinnovation in engine design concepts knows no bounds.

Bando's Products

High-load V-ribbed belts

As world No. 1 automotive power transmission belt maker(OEM), we are contributing to the creation of an environmentallyfriendly society by improving engine efficiency through theongoing evolution of auxiliary drive belts.

VALUE

30%

increase in powertransmission capability
High-load V-ribbed belts, one of Bando's
flagship products, are high-load transmission
belts that contribute to making automobile
engines lighter and more compact. Use ofhigh-strength rubber with a high-strength
core increases transmission capability byapproximately 30% compared to conventional belts, and the belt width is only about
two-thirds that of a conventional belt.

2

BANDO CHEMICAL INDUSTRIES, LTD.

Annual Report 2016

3

The Value We Create

At Manufacturing Plants
Bando's Products

HFD SystemTM

VALUE

Reduces power
consumption by more
than

7%

Bando's Hyper Flat Drive (HFD) SystemTM,
which won the Grand Prize for Excellence inEnergy Efficiency in 2014, is a transmission

Energy conservation and environmental
considerations are not issues for the automotive
industry alone. Bando also contributes to reduced
power consumption and improved efficiency in othermanufacturing industries through the evolutionof industrial power transmission belts used in
manufacturing plants.

4

BANDO CHEMICAL INDUSTRIES, LTD.

system that can contribute significantly toenergy savings and reduced CO2 emissions.
With low belt-bending rigidity to reducetransmission loss, it can reduce power
consumption and CO2 emissions more than
7% compared to V-belts. Owing to a longer
service life and reduced weight, these belts
significantly reduce industrial waste.
Plant HVAC System Compressor

Annual Report 2016

5

The Value We Create

In the Resource Industry

Bando's Products

G-CARRYTM
Conveyor Belt

As economic globalization advances, resource industries are
increasingly expected to provide higher added value throughgreater efficiency and energy savings. For harsh mining
environments Bando develops and manufactures conveyor
belts that not only offer durable performance, but can alsoachieve energy conservation and a reduction in CO2 emissions.
VALUE

Reduces power
consumption by about3%*

Suitableforconveyingbulkmaterials

such as coal, ore, and limestone, and fortransporting bags and powder materials,
the G-CARRYTM, Bando's standard belt,
has been redeveloped with a core-bodycanvas and rubber cover, offering reduced
power consumption and CO2 emissions andimproved durability.
*Results of in-house testing in comparison with Bando's conventional product. Energy savings may vary depending on operating
conditions.

Crushed stone transport conveyor

6

BANDO CHEMICAL INDUSTRIES, LTD.

Annual Report 2016

7

The Value We Create

For Office Automation
Bando's Products

BANCOLLANTM BLADE
G-ModuleTM

VALUE

Thickness precision
improved to±0.02mm
The BANCOLLANTM Blade G-ModuleTM is

Bando's technical capabilities also offer value in bringing high performance tooffice automation equipment.
By making full use of the characteristics of rubber, polyurethane, engineering
plastics and other materials, employing material and structural design
technologies to add optimal functionality, and by offering high quality,
precision processing, Bando improves the efficiency of office automationequipment, contributing to improved work productivity.

designed for use as a cleaning blade forphotoconductive drums, transfer printing
drums, and transfer printing belts. Uniqueprocessing significantly improves thickness
precision (G-Module ±0.02 mm vs. conventional products ±0.1 mm), which is importantfor cleaning accuracy, and contributes toimproved office document printing quality.

8

BANDO CHEMICAL INDUSTRIES, LTD.

Annual Report 20169

Snapshot
3

Top Share in OEM Supply of Automotive Belts

1

Bando Chemical Industries is expanding its businessscale and enhancing profitability in growth markets.

No.
global share

The snapshot below describes our strengths anddistinctive features.

OEM supply of automotive belts

1

Core Business in Automotive-related Fields
Sales of automotive
parts business

42,750 million¥
2016(¥ million)

Consolidated net sales

Sales of automotive parts
business as % of total

45.8%

*

93,272 million

4

The auto industry continues to expand,driven by increased motorization mainlyin emerging countries.

Top Share in OEM Supply of Power Transmission Belts
for Injection Molds and Machine Tools in Japan
Our power transmission belts for injection
molds and machine have been highly
evaluated for their high power transmission
capability and durability, and we hold the
top share in Japan for these product.

Automotive businesses account for
45.8%* of total consolidated net sales
at Bando. We expect the automotive
parts business to provide good growth
opportunities moving forward.

1

No.
share in Japan* ‌Sales of automotive parts business/Consolidated net sales¥

2

Overseas Sales Ratio Continues to Expand
Overseas sales
Overseas sales ratio
Overseas sales(¥ million)
50,000Overseas sales ratio

40,000(%)
50

40

30,00030

20,00020

10,00010

00

We have built up a good reputation
based on our meticulous service to satisfy individual customer needs, excellent
quality, and stable supply capabilities. Asof the end of fiscal 2015, we command
the top global share for OEM supply of
automotive belts.

5

Building an Even Stronger Financial Position
Capital investment / Net interest-bearing debt*
D/E ratio

We are meeting the needs of ourJapanese customers developing global
operations and are also focusing on
business with overseas customers. Our
overseas sales ratio is growing steadily.

Synchronous belts for high load power transmission applications

Capital investment(¥ million)
6,000

Net interest-bearing debt*

D/E ratio(times)
0.6

4,000

0.4

2,000

0.2

0

0

We are working to build an evenstronger financial position, even as we
continue the capital investments needed
for growth.
At the end of fiscal 2015, our net
interest-bearing debt and D/E ratio wereat all-time lows.

-2,000-4,0002007 2008 2009 2010 2011 2012 2013 2014 2015 2016

-2,000-6,000

2012

2013

2014

2015

2016

* Net interest-bearing debt =short-term borrowings + long-term borrowings + corporate bonds – cash and deposits

10

BANDO CHEMICAL INDUSTRIES, LTD.

Annual Report 201611

Products
The Bando Group’s products boast world-class performance and quality based ontechnologies developed over many years.
Bando’s specialty products display our superior design and development capabilities.

Belt BusinessNet sales bybusiness segment

We excel in OEM business in the automotive, industrial machinery, agricultural machineryand conveyance sectors, where we hold a large global market share.
We develop environmentally-friendly power transmission systems and provide
comprehensive product lines suitable for various fields.

Strengths and Characteristics• A full lineup of rubber conveyor belts and light-duty
resin conveyor belts• Precisely meeting customers’ needs with heat andoil-resistant specifications, as well as fray prevention,
non-slip, anti-static and many other models

Main Products

G-CARRYTM

Pipe Conveyor Belts

Mr. COOKTM F2224 Non-Stick
Belts

Lightweight Jointless P-Series
Belts

2016

82.9%

Core Technologies Rubber and resins compound design, dispersion and processing
technologies, power transmission system technologies

Automotive Power
Transmission Belts

Conveyor Belts

Main Products

for four- and two-wheeled vehicles
Strengths and Characteristics• I ntegrated development of automotive auxiliary
drive belts and power transmission systems (Tier 1
manufacturer of power transmission belt systems forautomotive manufacturers)• Development of high-efficiency continuously variable

RIB ACETM

V-Ribbed Belts

Advanced Elastomer Products Business

VS Belts

Net sales bybusiness segment

We maximize materials characteristics through the use of our precision processing, material and structural design technologies, and add optimal functionality to develop pioneering products with high precision and high quality, in consideration of the environment.

transmission (CVT) belts for two-wheeled vehicles

Core Technologies Elastomer and resins compounding design, dispersion andprocessing
Automatic Tensioners

Industrial Power
Transmission BeltsTENSION MASTERTM
Main Products

for industrial and agricultural machinery
Strengths and Characteristics• D evelopment of energy-efficient belts and belts
suited to high power machinery• Global production and sales network, with 22 basesin 15 countries

TM

Red SII V Belts for
agricultural machinery

TM

STS/HP-STS/Ceptor -VI

12

BANDO CHEMICAL INDUSTRIES, LTD.

TM

HFD System

Strengths and Characteristics• Development and provision of high performance,
clean precision parts• Development and provision of functional films forvarious applications, such as in the printing andmedical fields

2016

17.1%

Main Products

BANCOLLANTMBLADE G-ModuleTM

Development Rollers

BANDO GLANMESSETM

Medical films

BANCOLLAN™
Long Synchronous Belts

Annual Report 201613

History
2016

Developed tension
meters of lashing
belt for cargo
Developed C-STRETCH
elastic strain sensor
2015

We have worked to build trust and brand recognition over 110 years since
our founding.
Without contenting ourselves with this, we will incessantly strive to change
and challenge to achieve the next “Breakthrough for the future.”

History of Global Expansion
2015

Commenced operations at a new company in Mexico

2015

Developed Thermal Conductive
Sheets for electronic devices
Established new plant in India
2013
Opened technical center in Thailand
2013
Reorganized Shanghai-based subsidiary into a management company
2012
Commenced sales of TENSION MASTER, atension meter featuring an acceleration sensor
Established subsidiary in Vietnam
2012
Opened technical center in China
2012
Commenced sales of non-flammable BANDO GLANMESSE
2014

Commenced sales of BANCOLLAN Cleaning Blade G-Module
Developed BANDO MDEC, a new method for removing
microscopic dust
Commenced sales of DS5M, double-sided, synchronous power transmission belts
2011

2011
2010
2009

Opened Representative Officein Argentina

Commenced sales of G-CARRY environment-friendly,
energy-saving conveyor belts

2008
2008

Commenced sales of RIB ACE ECO-HT high-load automotive V-ribbed belts
Commenced sales of thin polyolefin films
Commenced sales of FlowMetal, low-temperature sintering nanoparticles
Commenced sales of the Hyper Flat Drive System

2008
2008
2008

Established subsidiaries in India and Turkey
2003
Established subsidiary in Shanghai, China
2002
Established subsidiary in Tianjin, China
1998
Established subsidiary in Hong Kong
1995
Established subsidiaries in Indonesia, Malaysia, and South Korea
1988
Established subsidiaries in Thailand and Spain
1987
Established subsidiary in Taiwan
1985
1982
1981

Established subsidiary in Singapore
1980
Established subsidiaries in the United States and West Germany
1978
Equity participation in industrial rubber product1975
Commenced full-scale production of photocopier cleaning blades
manufacturers in the Philippines and Malaysia
1972
Commenced sales of Japan’s first light-duty conveyor belts
1970

Opened Representative Offices
1969
in the United States and West Germany 1964

Commenced sales of BANDO Automatic Tensioners, automatic automotive belt tensioners
Developed BANDO AVANCE, the world’s first dry belt for continuously variable transmissions (CVT)

Commenced sales of MULITE high-performance plastics products
Commenced sales of RIB ACE automotive V-ribbed belts

Other1970 Listed on the First Sectionof the Tokyo Stock Exchange

2016 Celebrated 110th
founding anniversary

Commenced production of Japan’s first single-ply conveyor belts

1962

Commenced sales of polyurethane products
Commenced sales of SYNCHROBELT toothed belts
1950
Commenced sales of plastic films and sheets
1932
Commenced sales of Japan’s first V belts
1921
Commenced production of Japan’s first conveyor belts
1913
Commenced production of rubber belts
1906
Commenced production of cotton belts
1961

History of Product Development

1962 Listed on the Second Sectionof the Osaka Securities Exchange

1959

14

BANDO CHEMICAL INDUSTRIES, LTD.

A pioneer belt manufacturer since its founding in Japan, the Company
has now grown to manufacture and sell products throughout the world
as it continues to develop products in support of industry.

Annual Report 201615

Global Network
Aiming to become a standout supplier worldwide,
we are expanding our global network based inJapan, China, Asia, the United States, and Europe.

Bando Chemical
Industries’
Global Network

Asia

Bando Jungkong Ltd. Bando Korea Co., Ltd.

Bando Siix Ltd.

Sanwu Bando Inc.

Philippine Belt
Manufacturing Corp.

Bando Manufacturing Bando Manufacturing Pengeluaran Getah Bando(Vietnam) Co., Ltd.
(Thailand) Ltd.*(Malaysia) Sdn. Bhd.

Kee Fatt Industries,
Sdn. Bhd.

Bando (Singapore)
Pte. Ltd.

P.T. Bando Indonesia

Japan*

Bando (India) Pvt. Ltd.

China
Sales by Region

Bando Belt (Tianjin)
Co., Ltd.

Bando Manufacturing(Dongguan) Co., Ltd.

Bando (Shanghai)Management Co., Ltd.*

Bando (Shanghai)Industry Equipment
Element Co., Ltd.

BL Autotec(Shanghai), Ltd.

(as of March 2016)

Head Office

Overseas sales ratio:*Japanese business locations are leading
the development of environment-friendly
products and the expansion of highvalue-added businesses.

48.51%* China Technical Center and Asia Technical Center were opened in2012 and 2013, respectively, both of which are developing productswith optimal specifications for markets.

16

Bando Iberica, S.A.

BANDO CHEMICAL INDUSTRIES, LTD.

Bando Europe GmbH Bando USA, Inc.

Business locations

Asia: 24.21%

Kobe Head Office/
R&D Center

China: 12.37%

Kakogawa Plant

Europe, America &other: 11.93%

Europe, America & other

Bando Belt
Manufacturing(Turkey), Inc.

Japan: 51.49%

Bando Belting de
Mexico, S.A. de C.V.

Ashikaga Plant
Tokyo Branch Office
Nagoya Branch OfficeNankai Plant
Wakayama Plant/
Power Transmission Technical Research Center

Sales and Fabrication Service Affiliates

Manufacturing Affiliates

Higashinihon Bando Co., Ltd.
Nishinihon Bando Co., Ltd.
Bando Elastomer Co., Ltd.
Bando Fukushima Products, Inc.
Vann Corporation
Koyo Sangyo Co., Ltd.
Hokuriku Bando, Inc.

Fukui Belt Industries, Ltd.
BL Autotec, Ltd.
Bando-Scholtz Corporation
Other Service Affiliates

Bando Trading Co., Ltd.
Bando Kosan Co., Ltd.

Annual Report 201617

Highlights
10–Year Summary of Consolidated Financial Statements
Fiscal year endings are March 31 in the years shown below“DOING MORE on the new frontier”“DOING MORE on the new frontier”“Breakthroughs for the future”

1st stage

2nd stage

1st stage• Enhance global development and profitability on core business• Advanced product development• Expand overseas business and enhancecost competitiveness• Accelerate new product development• Evolution and deepening of current businesses• Enhancement of R&D and market development

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Net sales

Millions of yen

95,20098,66287,45373,59384,811

86,37285,77293,434

95,396

93,272

Operating income

Millions of yen

8,027

7,325

2,115

2,450

5,056

4,571

4,095

5,518

4,797

5,961

Operating margin

%

8.4%

7.4%

2.4%

3.3%

6.0%

5.3%

4.8%

5.9%

5.0%

6.4%

Profit attributable to shareholders of theparentMillions of yen

3,985

5,289

(255)

1,234

3,333

1,440

2,510

4,280

3,757

4,386

Net cash provided by operating activities

Millions of yen

9,641

7,805

7,621

8,724

9,529

6,595

7,004

6,459

8,061

9,038

Net cash used in investing activities

Millions of yen(6,288)(9,830)(4,937)(3,147)(4,922)(4,768)(5,781)(5,038)(3,931)(4,184)

Net cash provided by (used in) financing
activities

Millions of yen

1,888(1,575)(675)(2,516)805(4,363)(463)(1,548)(2,472)(3,050)Depreciation and amortization

Millions of yen

4,660

5,684

6,073

5,411

4,907

4,804

4,389

4,174

4,386

4,321

Capital investment

Millions of yen

7,692

7,166

4,176

2,791

3,381

4,619

5,052

5,046

4,198

4,676

Net assets

Millions of yen

42,56844,97238,35240,02040,54239,444

43,22649,27756,77755,205

Total assets

Millions of yen

96,53090,801

76,621

78,02082,90579,65982,20789,623

94,70090,765Interest-bearing debt

Millions of yen

18,717

18,525

17,66915,744

17,653

14,595

15,74615,753

14,487

12,560Shareholders’ equity*

Millions of yen

41,70744,04637,34539,18839,67738,55942,775

48,77256,27354,786

Earnings per share

Yen

39.34

52.68

(2.55)

12.31

33.74

14.84

26.47

45.49

39.95

46.65

Net assets per share

Yen

412

439

372

391

405

402

455

518

598

584

Annual dividend per share

Yen

10.00

10.00

7.00

6.00

8.00

8.00

8.00

10.00

10.00

12.00

Thousand shares

101,310

100,393

100,313100,294

98,78897,034

94,811

94,095

94,063

94,018

%

43.2

48.5

48.7

50.2

47.9

48.4

52.0

54.4

59.4

60.4

times

0.449

0.421

0.473

0.402

0.445

0.379

0.368

0.323

0.257

0.229

ROA

%

4.3

5.6

(0.3)

1.6

4.1

1.8

3.1

5.0

4.1

4.7

ROE

%

9.8

12.3

(0.6)

3.2

8.5

3.7

6.2

9.4

7.2

7.9

times

15.5

6.8

–

24.1

11.5

20.8

11.1

9.3

11.6

10.9

%

25.4

19.0

–

48.7

23.7

53.9

30.2

22.0

25.0

25.7

3,393

3,414

3,436

3,285

3,427

3,545

3,592

3,817

3,930

3,920

Average number of shares outstanding
during the period
Equity ratio
D/E ratio

P/E ratio
Payout ratio
Number of employees* ‘Shareholders’ equity’ = net assets – minority interests

18

BANDO CHEMICAL INDUSTRIES, LTD.

Annual Report 201619

Highlights

Major Indicators

Fiscal 2015 Topics

Fiscal year endings are March 31 in the years shown below

Net sales

Operating income(¥ million)
100,000(¥ million)
8,000

(%)
8

6,000

6

4,000

4

2,000

2

80,000

Product Development and Others

Operating margin

Commenced sales of the Bando Wiper Edge™ EX seal blade
for the sliding portion of machine tools
Commenced sales of SUNLINE™ Belt light-duty
conveyor belts meeting EU regulations

60,00040,00020,000002011 2012 2013 2014 2015 201602011 2012 2013 2014 2015 2016

March

SunlineTM belt
2011 2012 2013 2014 2015 2016

Capital investment

Free cash flow

Net assets
Total assets(¥ million)
8,000(¥ million)
6,000(¥ million)
100,000

6,000

4,500

4,000

3,000

2,000

1,500

0

0

Net assets

Commenced sales of high-load Ceptor™-X S8M Type and S14M Type toothed belts

February

Developed a tension meter of lashing belt for
cargo

Total assets

January

80,0002016

Tension meter of lashing belt for cargo

December

60,0002011 2012 2013 2014 2015 2016

Shareholders’ equity*
Equity ratio
Shareholders’ equity(¥ million)
60,000(%)
62.5

2011 2012 2013 2014 2015 2016

Annual dividend per share
(yen)
12

Payout ratio
(%)
60

ROA
(%)
14
12

60.0

10

50

50,000

57.5

8

40

55.0

6

30

52.5

4

20

35,000

50.0

2

10

30,00047.5

00Interest-bearing debt
D/E ratio
Interest-bearing debt(¥ million)
30,0002011 2012 2013 2014 2015 2016

Raw material costs (indicators)(times)0.5
0.4

18,0000.3

12,000

0.2

6,000

0.1

2011 2012 2013 2014 2015 2016

BANDO CHEMICAL INDUSTRIES, LTD.

Commenced innovations on production lines for belt products

October

September
Kakogawa Plant

Ashikaga Plant

8

AugustCompletely renewed our
corporate website

420Commenced operations at
a new company in Mexico

ROE

10

July
2011 2012 2013 2014 2015 2016

Corporate website top page

Exchange rate transition

1.50

USD
(%)
160

1.25

140

1.00

120

Naphtha0.0

CottonNatural rubber

Aluminum

0.75

0.50

’11/12THBEURQUICK-CHANGE GIGATM

May

Consolidated subsidiary BL Autotec,
Ltd. commenced sales of heavyduty next-generation tool changer,
QUICK-CHANGE GIGA™

April’12/12’13/12’14/12 ’15/12 ’16/3

80’10/12

Relocated the Tokyo Branch Office

Management100* Raw materials cost (indicators) base is 2011/12.

20

NovemberJune

D/E ratio

24,00002011 2012 2013 2014 2015 2016

6

40,0002011 2012 2013 2014 2015 2016

Developed the C-STRETCH™ elastic strain sensor

ROA
ROE

55,00045,00020,0000Annual dividend per share
Payout ratio

Equity ratio

40,000Nankai Plant achieved a record of 3,700,000 hours of accident-free operation’11/12’12/12’13/12’14/12 ’15/12 ’16/6* Exchange rate base is 2010/12.

March
2015

Annual Report 201621

Message from the President“We will work to achieve theprofit targets of our midterm business plan, reaping
the results of the past three
years and accelerating our key
initiatives.”
In fiscal 2015, the third year of Bando’s five-year mid-termbusiness plan, sales and profits fell in the Automotive Parts
Business as production declined in Asia and automobile
production volume in Japan slumped, but thorough cost
reduction efforts ensured a rise in profits.
Our goal for fiscal 2016 is to quickly reap the results of ourefforts over the past three years to strengthen our business

Mitsutaka Yoshii
President and Representative Director,
Bando Chemical Industries, Ltd.

22

BANDO CHEMICAL INDUSTRIES, LTD.

foundation and our profit structure, ensuring we achieve our
profit target for the final year of the plan.

Annual Report 201623

Message from the President

Performance in Fiscal 2015
Sales were down, but cost reductions
and other factors contributed to anincrease in profit.
In fiscal 2015, the Bando Group focused on the key
initiatives for the third year of our mid-to-long termbusiness plan, “Breakthroughs for the future.” While
sales growth was seen in CVT belts for two-wheeledvehicles in India and Vietnam, and in the Industrial
Products Business in the U.S., China, and Asia, adecline in production in China of automobiles for
key automotive customers in China and Asia, andthe impact of a slump in automotive production
volume in Japan saw net sales in the Belt Businessfall by 2.8% year on year, to ¥75,878 million. In
the Advanced Elastomer Products Business, salesof high value-added performance film products
increased, but with a drop in sales of precision parts

associated with declines in production at major
office equipment manufacturers, net sales fell by
0.6% year on year, to ¥15,620 million.
As a result, consolidated net sales decreased
2.2% from the previous fiscal year to ¥93,272 million.
However, thanks to a drop in naphtha prices,which resulted in lower raw material procurement
prices; a thorough effort to reduce costs; and an
improvement in profitability associated with efforts
to increase production at overseas production sites,
operating income increased 24.3% year on year, to¥5,961 million. Profit attributable to shareholdersof the parent, meanwhile, saw some impact fromforeign exchange losses, but still grew 16.7% year
on year, to ¥4,386 million. Our year-end dividendrose by ¥1 over the previous year, to ¥6 per share,
while the annual dividend increased by ¥2, to ¥12
per share, in line with initial forecasts.

Consolidated earnings
Fiscal 2014 results

Fiscal 2015
Results

YoY¥95,396 million¥93,272 million−2,123Operating income¥4,797 million¥5,961 million+1,163

Profit attributable toshareholders of the parent¥3,757 million¥4,386 million+628

Net sales”Breakthroughs for the Future” Mid-to-Long TermBusiness Plan: Overall Image and Progress
Aiming to be a standout global
supplier in two steps
In 2013, the Bando Group embarked on its midto-long term business plan “Breakthroughs forthe future,” which ends in fiscal 2022. Under thisplan, we aim to provide value-added products that
contribute to environmental preservation, energy

24

BANDO CHEMICAL INDUSTRIES, LTD.

conservation and higher functionality further refining
our core technologies and reliable product quality inthe fields of rubber, elastomers, and resins—where
we have built up extensive expertise since theCompany’s founding—to become a standout
supplier of belts and high-performance products in
the global market.
In the first stage of the plan, from fiscal 2013

to fiscal 2017, we are working to evolve and deepen
the Group’s current operations, particularly inthe belt business, and strengthen research anddevelopment as well as market development inorder to establish new businesses. Specifically, we
are focusing on the key measures based on the fiveguidelines of the mid-term business plan: evolutionof global market strategy, product evolution, evolution in manufacturing, new businesses creation, andevolution in management quality.

In the second stage, from fiscal 2018 to fiscal
2022, toward the realization of our aspirations,
we will create new business based on the resultsof the first stage to make a contribution equal inimportance to our belt business. Leveraging the two
earnings drivers, we will concentrate on expanding
earnings to become a truly global supplier with net
sales of around ¥150 billion by fiscal 2022.

Chart 1 Overall image of the mid-to-long term business plan

“Breakthroughs for the future”
mid-to-long term business plan

Aiming to be a standout global supplier•Global development of belt and high-performance product businesses•Provide value-added products that contribute to environmental preservation, energy conservation andhigher functionality•Leverage core technologies and reliable product quality in rubber, elastomers and resins
Breakthroughs for the future
Second stage from fiscal 2018 to fiscal 2022

Breakthroughs for the futureFirst stage from fiscal 2013 to fiscal 2017

•Evolution and deepening of current businesses•Enhancement of R&D and market development•Realization of aspirations for 10 years ahead•Establishment of a business to accompany
the Belt Business

BF-1: Five Guidelines
Evolution of global
market strategy

Product evolution

Evolution in
manufacturing

Progress of BF-1 in the first stage
As the first step to achieving the numerical targets
by fiscal 2022, Bando aims to generate net sales of¥100 billion and operating income of ¥10 billion in
fiscal 2017, the final fiscal year of the first stage.
As of the end of the third year of the five-year
first stage, we believe our target of ¥100 billion in
net sales in fiscal 2017 is within range. However,reaching our targets of ¥10 billion in operating

New businesses
creation

Evolution in
management
quality

income and an operating margin of 10% will
require us to accelerate our efforts to implement
various initiatives. In the remaining two years of
BF-1, therefore, we will work to quickly reap theresults of the strategic investments (see Chart 3 )and other efforts implemented over the past three
years, while at the same time focusing on three
initiatives requiring acceleration (see Chart 4 ),thereby increasing the likelihood of achieving ouroperating income target.

Annual Report 201625

Message from the President

Chart 2 BF-1 Numerical targets and progress(¥ billion)

2012

2013

2014

2015

2016
(Forecast)

Net sales

85.7

93.4

95.3

93.2

94.0

Operating income

4.0

5.5

4.7

5.9

6.0

Operating margin

4.8%

5.9%

5.0%

6.4%

6.4%

Fiscal year

BF-1 final year targets
Fiscal 2017

Net sales ¥100 billion
Operating income ¥10 billion(Operating margin of 10.0%)

BF-1 (from fiscal 2013 to fiscal 2017)
Chart 3 BF-1 Strategic investments carried out over the past three years
Location

Description

Date

India/Bangalore Plant

Opened integrated production plant

Fiscal 2013

Thailand/Bando Manufacturing (Thailand) Ltd.

Renewed the equipment of the main plant

Fiscal 2013

Indonesia/P.T. Bando Indonesia

Expanded production capacity

Fiscal 2013

China/Bando (Shanghai) Industry Equipment Element Co., Ltd.

Expanded production capacity

Fiscal 2014

Mexico/New company established

Sales of transmission belts and related products

Fiscal 2015

Japan: Renewal of conveyor belt production lines at the Kakogawa Plant

Providing high value-added products

Fiscal 2015

Japan: Renewal of the precision belt production line at the Ashikaga Plant

Providing high value-added products

Fiscal 2015

Chart 4 BF-1 Three initiatives requiring acceleration over the next two years

1 	Accelerate overseas sales initiatives in response to changes in exchange rates andother external conditions

for automobiles, two-wheeled vehicles, agricultural
machinery and general industrial use, as well as
light-duty conveyor belts. We will move forward todevelop new customers, mainly in Japan, China, and
the ASEAN region.
Currently, belts for two-wheeled vehicles are
selling particularly well, and sales of these belts
have been growing at rates higher than domestic
market growth in India, where we opened a factoryin Bangalore in 2013, and in Vietnam, where we
opened a factory in 2012. In both cases, this has

been due to an expansion in scale, and improvements in profitability created by producing locally,
the fruits of which have been a major improvementin profit structure.
In other regions as well, clearly establishingand implementing these kinds of measures aimed
at gaining competitive advantage will enable us tosolidify our position as Asia’s leader in the transmission belt segment, preparing us to accelerate
growth toward achieving our BF-1 profit target.

Chart 5 Growth in belts for two-wheeled vehicles in India and Vietnam

Change in net sales and production volume ofbelts for two-wheeled vehicles in India
Net sales

Production volume

250

200

150

Net sales of belts for two-wheeled vehicles
in Vietnam

About

2.3 times

200

About
150

Fiscal 2013
2Q
Net sales = 100
Production volume = 100

1.6 times

Fiscal 2013
1Q
Net sales = 100

100
100
50
50

2 	Accelerate development of high value-added products and expand sales
3 	Accelerate investments in innovative production methods to strengthen cost

0

2Q

3Q

Fiscal 2013

4Q

1Q

2Q

3Q

Fiscal 2014

4Q

1Q

2Q

3Q

4Q

Fiscal 2015

0

1Q

2Q

3Q

Fiscal 2013

4Q

1Q

2Q

3Q

Fiscal 2014

4Q

1Q

2Q

3Q

4Q

Fiscal 2015

competitiveness, and progress in building an optimal production structure

Key Initiatives for Fiscal 2016
Operating environment
In fiscal 2016, the yen is forecast to continue
strengthening against a backdrop of uncertainty
about the global economy. Still, we expect to see
growth in sales of automotive power transmission
belts in the U.S. and Europe, and in belts for twowheeled vehicles in Southeast Asia, as well as market expansion for industrial power transmission belts
in the U.S. and Asia, and for belts for agricultural
machinery in China and Asia. Given this operating
environment, and bearing in mind the three

26

BANDO CHEMICAL INDUSTRIES, LTD.

initiatives requiring acceleration, noted previously,
the Bando Group will also work to accelerate ourefforts toward evolution of a global market strategy,
product evolution, evolution in manufacturing andnew business creation as laid out in the guidelines inour mid-term business plan.

Evolution of global market strategy
Utilizing the business foundation bolstered by thepast three years of strategic investment, we will
strengthen our sales structure primarily around belts

Product evolution
In product evolution, we continue to work on developing high-performance products to match market
needs, and to improve added value. However, while
global automobile production volumes are forecast
to grow in fiscal 2016, that growth is not expected
to be dramatic, and the Bando Group plans tocompensate for that by utilizing our unique businessplatform for growth in belts for two-wheeled vehicles, Industrial Materials Business, and Advanced
Elastomer Products Business.
In the Belt Business, sales of Double Cog
Belts, high-performance CVT belts developed in2015 for two-wheeled vehicles, have grown thanks

to a strong reputation among customers. In the
Industrial Products Business, we introduced highvalue-added products that perform at top-classlevels in their respective markets, including the
CeptorTM-X toothed belt for high-load industrial
machinery, developed in 2015; the SunlineTM Belt
series of light-duty conveyor belts designed for foodconveyance (compliant with European Commission
regulations); and the Bando Wiper EdgeTM EX forthe sliding portion of machine tools. In the highperformance elastomer products business, we also
worked to expand sales of development rollers withlonger service life for OA equipment, which deliver
the industry’s highest level of performance.

Annual Report 201627

Message from the President

New businesses creation

Double Cog BeltsTM

CeptorTM-X

SunlineTM Belt

While accelerating our strategy of adding
higher value to these existing products, we arealso focused on developing new products thatstay ahead of the market. For example, we are
currently working to develop a synchronous drive
belt for electric power systems. This is just, onecase in which our belts are finding applications infields outside of engine auxiliary drives. We expect
to see a growing need for this product, which
contributes to noise reduction, for luxury cars andautomated driving systems, and by approaching

relevant customers, we will further expand this newmarket.
The Bando Group already has a significant
share of the domestic market for belts for agricultural machinery. Capturing overseas markets
remains an issue, however, and we are working tostrengthen development of products such as belts
for heavy-duty machinery and farming equipmentthat take foreign market characteristics into consideration, and timing those efforts to model changes
in existing manufacturers’ products.

Evolution in manufacturing

our search for materials both in Japan and overseas,
while working to link these efforts to product development and the building of an optimized global
production structure. In building that structure, ouremphasis is on optimizing the balance between procurement, production and supply, and preparations
have begun for production transfers in 2017 withthe goal of implementing the concepts we havedeveloped to date. Through this series of efforts, wehope to see the cost of sales ratio, which was 71% in
fiscal 2015, improve to around 60% in fiscal 2016.

We are focusing on strengthening our cost competitiveness to capture global markets. In developing
and establishing innovative manufacturing methods,
BF-1 strategic investment enabled us to renew ourconveyor belt production line at the Kakogawa
Plant and develop new manufacturing methods forpolyurethane belts at the Ashikaga Plant, but wewill work to further reduce costs by accelerating
our efforts to reap the fruits of these successes. To
advance development purchasing, we will continue

In BF-1, the first phase of the mid-to-long termbusiness plan, we aim to strengthen research anddevelopment and new market development, andin BF-2, the second phase, our goal is to establish
a secondary business to our existing Belt Business.
Using environmental protection, energy conservation and high performance as key objectives, wespent the last three years focusing research anddevelopment on the key markets for optoelectronics, transportation/automobiles, energy androbotics, with a specific concentration on researchand development and new product developmentin the fields of power electronics, printer electronics
and welfare/nursing care. As a result, products
have now appeared that have realistic potential forcommercialization and for which mass production isscheduled to begin.
For example, Free CrystalTM, an optically clear
adhesive (OCA) scheduled for launch in Octoberof this year, can be used to fill air layers between
elements in touch panel displays, greatly improving

Chart 7 New businesses creation: Immediate main products
Target areas

Ashikaga Plant

75

Product development

Research

Product development/
Customer assessment

Thermal conductive sheets(for electronic devices)

Sample products on sale, withimprovement developments
underway toward mass production

Metal nanoparticle past
FlowMetal™

Assessed by several companies,
work begun on precision production
process toward mass production

Optically clear adhesive sheets
Free Crystal™

Sales launched from October 2016

Automotive/
transportation

Tension meter of lashing belt for
cargo

Under joint development with Sankyu Inc.
(Fiscal 2016 sales launch is projected)

Robotics

Industrial robotic devices
QUICK-CHANGE GIGA™

Sales launched from fiscal 2015

Elastic strain sensor
C-STRETCH™

Assessment kits on sale primarily
for the medical, welfare andnursing care fields

Optoelectronics

Chart 6 Image of a reduced cost to sales ratio (%)
80

visibility. This product, born out of our many years ofexperience in elastomer materials technology andmolding technology, is expected to find application
in automobiles and other uses as well.
In addition, the tension meter of lashing belt
for cargo developed jointly with Sankyu Inc., amajor logistics company, provides highly precise,numerical control of tension on lashing belts,
preventing the lack of tension that can be one causeof cargo load collapse, and generating value byenhancing transport reliability. Sales of the productare expected to commence in fiscal 2016.
By focusing on these and other efforts, as
noted in the chart below (see Chart 7 ) over the
next two years of BF-1, the Bando Group will work
to cultivate new businesses to act as nextgeneration pillars for the Company. In areas otherthan those shown below, we will continue to refine
our core technologies for compounding, dispersing
and combining elastomers and resins, merging
these with new technologies to create a base of
on-point technology for generating new products
and developing new markets.

Kakogawa Plant
70

Mass
production

Other
65
Fiscal 201328

BANDO CHEMICAL INDUSTRIES, LTD.

Fiscal 2014

Fiscal 2015

Fiscal 2016

Tailor-made rubber products forreactive 3D printers

Engaged in the Cross-ministerial Strategic
Innovation Promotion Program (SIP)

Annual Report 2016

29

Review of Operations

Belt Business
Expanding sales and improving profitability tostrengthen competitivenessAtsushi Someda

Yuji Honda

Executive Officer, General Manager,
Automotive Parts Division

General Manager, Industrial Products DivisionMarket Conditions
In the global automobile market, while growth will belimited in the mature markets of Japan, Europe and North
America, significant growth is expected overall due tomarket expansion in emerging countries, with global sales
forecast to reach 100 million units annually by around 2020.

Position and Target in the Mid-to-Long Term Business Plan
The Belt Business serves as the greatest earnings driverto achieve the Group’s mid-to-long term business plan,
Breakthroughs for the future. Under BF-1—the first part ofthat plan—which finishes in the fiscal year ending March
31, 2018, we will achieve earnings growth centered on thisPerformance for the Fiscal Year Ended March 31, 2016
The segment achieved net sales of ¥75,878 million, down 2.8% from the previous fiscal year. Sub-segment results are as follows.

Sales of accessory drive power transmission belts grew in the U.S.,
while sales of variable speed belts for scooters remained strong inIndia, Vietnam and Europe. Meanwhile, sales of power transmission
systems declined due to production cuts at major customers in China,
and a drop in the number of models using our parts in South Korea.
Also a recoil from last-minute demand in Japan before an increase in
the light vehicle tax, as well as a drop in domestic production volume
resulted in decreased sales of ancillary drive transmission systems. As
a result, sales for the sub-segment fell 6.4% year on year.

Industrial Products Business
While sales of conveyor belts for resource development declined inJapan, sales of belts for agricultural machinery grew in China thanks
in part to the return of subsidies for the purchase of agricultural
machinery, as did sales of power transmission belts for industrial
and agricultural machinery in Thailand, Vietnam and India. In the
U.S., a strong economy led to growth in sales of industrial powertransmission belts, and over all, sub-segment net sales increased 2.2%
year on year.
Segment profit increased 26.3% year on year to ¥5,248 million,
mainly due to the lower price raw materials such as naphtha andcost reduction measures in addition to enhanced profitability atoverseas production bases.

30

BANDO CHEMICAL INDUSTRIES, LTD.

(Millions of units)
110

Grand Total

Outlook

100
90
80
70

segment in a bid to solidify our growth foundation for the
five-year period of BF-2 (from the fiscal year ending March
31, 2019 to the fiscal year ending March 31, 2023) andbeyond.

Automotive Parts Business

Global Automotive Industry Outlook

Sales of Automotive Parts Businessby Product(¥ billion)
50

45.6

Other

42.7

40

Power transmission systemproducts
Power transmission belts

30

60
50

2010

0

2015

2016

Note: Sales by product represents
the figure before deduction ofinter-segment transactions

Sales of Industrial Products Businessby Product(¥ billion)

Other

40

32.3

33.0

30

Industrial power transmission
beltsLight-duty conveyor belts
Conveyor belts

20

We will continue our initiatives designed to continuously
solidify our leading position in Asia’s belt markets.
In the Automotive Parts Business, we will strengthen
sales in the repair market for four-wheeled and two-wheeledvehicles in China and the rest of Asia. In the Industrial
Products Business, we will work to expand sales in China, andintroduce new products for agricultural machinery, as well as
products with superior environmental performance.

In terms of profit, we will work to expand operating
income through sweeping cost reduction efforts at our
production bases and by promoting a global optimized
production structure. In conveyor belts and polyurethanebelts, we will continue ramping up innovative manufacturingmethods and promoting automation as we work to improve
profitability.

Net sales and segment profit(¥ million)
2015

0

Net sales
Automotive Parts
Industrial Products
Segment profit

2016 (results)

2015

2016

Note: Sales by product represents
the figure before deduction ofinter-segment transactions

78,10145,68032,3104,155

75,87842,75033,0285,248

Change(2,223)(2,928)718
1,093

Ongoing capital investment (for the fiscal year ending Mar. 31, 2017)
Location

Nankai Plant
Kakogawa Plant
Wakayama Plant

102022 (Year)Key Initiatives for the Fiscal Year Ending March 31, 2017

20
10

2015

Source: IHS

Power Transmission Technical Research Center
Bando USA, Inc.
Bando Korea Co., Ltd.
Bando Belt (Tianjin) Co., Ltd.
Bando Manufacturing (Thailand) Ltd.
Bando (India) Pvt. Ltd.
Total

Description

Expansion of equipment relating to powertransmission belts, etc.
Expansion of equipment relating to industrial products, including conveyor belts, etc.
Expansion of equipment relating to powertransmission belts, etc.
Investment in testing and research facilities

Expansion of equipment relating to powertransmission belts, etc.

% change
–2.8%
–6.4%
2.2%
26.3%
(¥ million)

Amount invested

Expected completion date

1,284

Mar. 2017

376

Mar. 2017140

Mar. 2017

110
144
723
191
750
121
3,839

Mar. 2017
Mar. 2017
Mar. 2017
Mar. 2017
Mar. 2017
Mar. 2017

Annual Report 201631

Review of Operations

Advanced Elastomer Products Business
Focus on expanding sales ofhigh value-added products

Takayuki Nagase
Executive Officer, General Manager,
Advanced Elastomer Products DivisionMarket Conditions

Position and Target in the Mid-to-Long Term Business Plan
The Advanced Elastomer Products Business offers clean,high performance products made of elastomers and resins
in a bid to contribute to target achievement in the mid-tolong term business plan, Breakthroughs for the future (fromthe fiscal year ended March 31, 2014 to the fiscal year ending March 31, 2023). As our second core business after theBelt Business, the Advanced Elastomer Products Businesswill achieve steady growth by accelerating the change toa high-added-value product portfolio, aimed at driving
forward the uses of our core elastomer and resin compounddesign, dispersion and processing technologies.

Global shipment quantities in the copier and multi-function
printer markets, which include major customers for our
precision parts business, are expected to grow around 1.7%
in 2016 and around 2.0% in 2017*. While the Japanesemarket for the copier and multi-function printer is somewhat saturated and is expected to remain more or less flat,
we expect increased demand for the A4-sized copier andmulti-function printer in Europe and the U.S., and also in
Asia.

The number of domestic housing starts, which are closely
linked to sales of high-performance film products, is basically projected to decrease going forward. Nevertheless,the home renovation market is forecast to grow to beinga market of ¥7.3 trillion in 2020, an increase of about 12%compared with 2015, against a backdrop of increases inhousing stock.

* Quantitative base
Source: Japan Business Machine and Information System Industries
Association’s “Projections of 2015 global shipments of officemachinery, and forecasts for 2016 to 2017” (published February 23,2016).

(¥ trillion)
8

Forecasts of Size of
Housing Renovation Market
7

6.9

6.6

6.5

7.3

6.6

6

Source: Estimates from Yano Research InstituteLtd., based on “Building Starts
Statistics” from the Ministry of Land,
Infrastructure, Transport and Tourism;
the “Annual Report on the Family
Income and Expenditure Survey” andthe “Basic Resident Registration” from
the Ministry of Internal Affairs andCommunications; and the “Household
Projections for Japan (National survey)”
by the National Institute of Populationand Social Security Research.

5
4
3

Performance for the Fiscal Year Ended March 31, 20162
1

For the fiscal year ended March 31, 2016, net sales declined 0.6% year on year, to ¥15,620 million. Sub-segment results
are as follows.

Precision Parts
Sales of precision belts and high-performance rollers for officemachinery were flat, and sales of blades and other precision polishing materials fell as major customers reduced production. As
a result of these and other factors, sub-segment sales decreased
2.5% year on year.

High-Performance Films
While sales of industrial films declined, there was an increase insales of film used in construction materials and for decorative
displays, and year on year sales in the sub-segment rose 4.2%.
Segment profit increased 131.0% year on year, to ¥759 million,
thanks in part to growth in sales of high value-added products andthe results of efforts to reduce costs.

32

BANDO CHEMICAL INDUSTRIES, LTD.

Sales of Precision Parts Businessby Product(¥ billion)
12

11.0

10.8

10

Other

8

Precision belts

6

Blades, high performancerollers

4
2
0

2015

2016

Note: Sales by product represents
the figure before deduction ofinter-segment transactions

Sales of High-performance Films Businessby Product(¥ billion)
6

4.5

4.7

Manufacturing materials
Decorative display

2

Construction materials

0

Note: Sales by product represents
the figure before deduction ofinter-segment transactions

2015

2016

2013 2014 2015 2016

(Forecast)

2020(Forecast)

Key Initiatives for the Fiscal Year Ending March 31, 2017
We will continue to refine our technologies for compounding, dispersing and combining elastomers and resins, which
are our core technologies, and accelerate our actions torebuild our product portfolio with a greater emphasis onhigh value-added products.

In the high-performance Elastomer Products Business,
we will work to increase sales of development rollers withlonger service life for OA equipment and other high valueadded products, while expanding sales in the market for
optoelectronics with our TOPXTM Precision Abrasive Film,the BANDO MDECTM cleaning system and other products.

Net sales and segment profit(¥ million)
2015

Net sales
Precision parts
High-performance films
Segment profit

15,713
11,0964,550
329

2016 (results)

15,62010,822
4,742
759

Change
(93)
(275)
192
430

% change
–0.6%
–2.5%
4.2%
131.0%

Other
Medical-related

40

Ongoing capital investment (for the fiscal year ending Mar. 31, 2017)
Location

Description

Nankai Plant

Expansion of equipment relating to chemical products, etc.
Expansion of equipment relating to industrial products and powertransmission belts, etc.

Ashikaga Plant
Total(¥ million)
Amount invested

Expected completion date281

Mar. 2017335

Mar. 2017

616

Annual Report 2016

33

CSR
Note: The tables below refer to Bando’s domestic facilities in Japan.

Basic Stance on Corporate Social Responsibility (CSR)
The Bando Group’s stance on CSR lies in business activities rooted in the positive contributions it makes to people’s lives
and the development of society, which are embodied in the Group’s management philosophy. In an effort to harmoniously
coexist with stakeholders—customers, shareholders and investors, employees, business partners (including suppliers
and retailers), and local communities—it is vital that we provide products and services that meet the needs of society
while undertaking business activities that help preserve the global environment. The chief objective of the Group’s CSR
activities is to gain the trust of society, which is consistent with its corporate culture and in keeping with its obligations tostakeholders.

Reduction of Energy Consumption

Curtailment of Waste Generation

Energy consumption

Waste generation(KL/GJ)
35,000(t)
8,000Energy consumption (KL/GJ)

Waste generation (t)

6,000
4,000

30,0002,000

CSR Management

25,000

The Bando Group’s CSR promotion system is led by the Company’s
CSR Promotion Committee.
Chaired by Bando’s executive in charge of CSR, the CSR
Promotion Committee decides on CSR policy for the entire Group,and monitors committees established for each CSR promotion
theme as well as the CSR functions of individual departments. The
Committee is also responsible for prioritizing issues, tracking the
progress of CSR activities, promoting public information disclosure,and interacting with stakeholders.

President

Head office/business facilities
Group affiliates

CSR Promotion
Committee
Chair: Executive incharge of CSR

CSR Promotion
Committee
secretariat

0

FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015

The Company’s industrial waste largely consists of rubber and plastics. Sincerubber is difficult to recycle, we work to curtail the generation of this type ofwaste.

Emission and Transfer Volumes of
PRTR Substances

Reduction of VOC Gas Emissions

PRTR substance emission and transfer volumes(t)250

Transfer volume (t)VOC emission volume(t)
400

Emission volume (t)Transfer volume + emission volume

200

CSR Promotion Themes and Major Achievements in Fiscal 2015

300
Target
200

100
100

Major
achievements

CSR promotion themes

Major
achievements

CSR promotion themes

50

34

Compliance/Business Ethics

The Environment

Quality

The Group fully complies with the law
and takes sincere actions to gain thetrust of society

Work for environmental preservation
by developing eco-friendly products
and by being attentive to the environment in manufacturing practices

Provide safe and reliable products
and services

Head Office Environment Committee;
Manufacturing Planning Center, Safety andEnvironmental Promotion Department

Manufacturing Planning Center,
Quality Control Department• Held Code of Conduct workshops at
business locations• Selection and testing of information
leak prevention equipment, and taught
information security using e-learning

Human Rights/Labor/Safety
Allow employee growth throughtheir work, and provide safe, dynamic
workplaces
Head Office Health and Safety Committee;
Human Resources Department;
Manufacturing Planning Center, Safety
and Environmental Promotion Department• Held mental health classes and walking
activities• Enhanced training programs for eachcareer stage and position• Health and safety education and installationof disaster simulation equipment(Work-related injuries resulted in lost time during
the fiscal year under review: 0 in Japan, 1 indomestic affiliates, 11 in overseas affiliates)

BANDO CHEMICAL INDUSTRIES, LTD.

• Reduced unit volume of waste generation

Raw material-related wastes –21.5% (year on year)
Packaging-related wastes +32% (year on year)• Reduced unit volume of energy consumption by 2.0% (year on year)• Suppressed VOC gas emissions by 68%(compared to fiscal 2000)• Start raising Eupatorium japonicum(thoroughwort), an endangered species, inKakogawa Plant

Social Contribution
Recognize the importance of communication with society, individual
contributions to the community, andcompany-wide contributions to society for environmental preservation
General Administration Department• Supported volunteer activities• Participated in activities organized by local
resident associations, and cleanup, public
safety and disaster prevention initiatives• Conducted tours of Company facilities andaccept internship, etc.

Fiscal 2015 emission target: 150 t

150

The Group engaged in various activities in line with six CSR promotion themes.

Legal Compliance Committee

FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015

In fiscal 2015, we reduced the energy consumption to 98% of the previous
fiscal year, however, we failed to reach our target volume of energy
consumption. From fiscal 2016, we will work on energy-saving activity byreferring to advice from outside professionals.

• Held Bando QC Circle World Convention• Convened a product quality case study
exhibition• Implementation of an assessment of
product conformity to standards• Updated the information management
system for chemicals used as raw materials

0

Finance and Accounting
Department; General
Administration Department• Convened procurement policy briefings• Published periodic CSR reports andbusiness reports, and provided informationon the Group’s websites• Held investor relations briefings

FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015

In fiscal 2015, we ensured proper VOC handling. In so doing, we achieved a
68% reduction in VOC compared with fiscal 2000.

We identified materials we handle that are listed in the Pollutant Release
and Transfer Register, and are working to reduce their use mainly byappropriate management and substituting other materials.

Environmental Accounting(¥ thousand)Fiscal 2013
Environmental conservation costs

Fiscal 2014

Depreciation
andCapitalamortization
investment + personnel
expenses +overhead

Pollution control
Business Global environmental
area cost conservation
Resource recycling

Information Disclosure
Timely and proper information
disclosure to stakeholders

0

FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015

Upstream/downstream cost

Fiscal 2015

Depreciation
andDepreciation
andCapitalamortization
investment + personnel

Capitalamortization
investment + personnel

expenses +overhead468

76,425

13,70859,5352,220

55,466

Installed ventilation equipment andleakage prevention plate

14,770

5,091

3,344

3,623

6,688

1,761

Seismic reinforcement and heat-blocking
measures686

217,480

847

166,1142,476

106,085

0

0

0

0

0

121

Administration cost

035,063023,350025,174R&D cost

031,354

029,493022,644

3,715

8,396

0

5,634

675

5,880

Social activity cost
Environmental remediation cost
Total

Main projects in fiscal 2015

expenses +overhead

0

722

0

1,177

0

669

19,640374,532

17,899288,927

12,059217,800

Well-boring

Greening on the premises(¥ thousand)Environmental conservation benefit
Business area

Fiscal 2013
59,518

Fiscal 2014
20,077

Fiscal 2015
22,640

Upstream/downstream

0

0

0

Other

83

0

0

Total

59,601

20,07722,640

Annual Report 201635

Corporate Governanceenables auditing and business oversight activities to be

Basic Stance on Corporate Governancemulti-faceted and undertaken by experts from a variety

In order to improve corporate value, the actions ofof fields.

1. As‌ of March 31, 2016, there are six directors (including two external directors)
and four audit & supervisory board members (including three external audit &supervisory board members)
2. The‌
total amount of external director and external audit & supervisory board
member compensation listed above is as follows.

the Company are based on an adherence to the law

Two external directors: ¥15 million
Three external audit & supervisory board members: ¥34 million

and social norms as a member of society. In addition,
positive relationships with customers (end users),

Nominating Committee andCompensation Committee

current and potential investors, business partners, local

Despite having no legal obligation under thecommunities and others. Accordingly, the Company

Companies Act, the Company has established thefocuses on ensuring sound, transparent and efficient

Nominating Committee and Compensation Committee

management by enhancing its corporate governanceto serve as consultative bodies of the Board ofsystem.

Directors in an effort to further strengthen corporate

the Company recognizes the importance of building

Notes:

governance.
Decisions regarding director appointments

the four objectives of internal control: (1) reliability offinancial reporting, (2) operational effectiveness andefficiency, (3) legal compliance regarding businessactivities, and (4) asset protection.

3. The‌
total amount of director compensation includes performance-relatedsalary based on the Company’s performance-related salary criteria (for full-timebasis directors only) for the fiscal year ended March 31, 2016. Performancerelated salary was not be paid for the fiscal year ended March 31, 2016.
4. In‌ addition to the above-listed information, salaries and bonuses for employees who concurrently serve as directors are as follows.
Two employee salaries: ¥35 million
Two employee bonuses: ¥12 million

Basic Stance on the Elimination ofAntisocial Forces
The Group takes stringent measures to eliminate
antisocial forces by investigating prospective business
partners prior to commencing new transactions basedInternal Control

on relevant Group policies and the Bando Group CodeTo meet the requirements stipulated in the Financialof Conduct, which stresses the overriding importance

Board of Directors

and compensation are made by a resolution of theInstruments and Exchange Act pertaining to financialof adhering to the law and corporate ethics. In

To reinforce audit and oversight functions, theBoard of Directors following deliberations by thereporting performed by internal control reporting

addition, the Group maintains an internal reporting

Company transitioned to a Company with an Audit &Nominating and Compensation committees. The

systems, the Bando Group maintains internal control insystem to thoroughly raise awareness of the necessity

Supervisory Committee by resolution of the General

Audit & Supervisory Committee must approve theaccordance with the basic frameworks for internal con-of avoiding any actions that are illegal or contrary to

Meeting of Shareholders held on June 23, 2016.

appointment of directors who will serve on it. The

trol outlined in Financial Services Agency criteria, andcorporate ethics. In the event that a business partner

Audit & Supervisory Committee also deliberates on theundertakes evaluations and reporting as defined byis revealed to be an antisocial organization, the Groupremuneration of said directors.

said criteria. The Company will work to further improve

will immediately dissolve its relationship with thisthe effectiveness of internal control primarily throughorganization.

The Company’s Board of Directors consists ofseven members, with three of those seven members
serving as members of the Audit & Supervisory

In the fiscal year ended March 31, 2016, the total

Committee. The Board makes decisions concerning

amount of director and audit & supervisory board

basic management policies, important management

member compensation is shown below.

Management organization and corporate governanceissues, and legally stipulated matters, as well as
monitoring the work performance of directors and[Reference data for period before transition to being

corporate executive officers. The Board’s three externala Company with an Audit & Supervisory Committee]

directors are charged with the independent oversight

Numberof
Personsof business operations. The Board meets at least
once a month. In addition, the Company maintains a
corporate executive officer system to improve operational efficiency and speed, and has established the

Total
Compensation

Compensation
Limit¥92 million¥240 million
or less annually

General Meeting of Shareholders
Election

Board of Directors
Supervision

Directors

6

Election
Audit/Supervision

with management decisions.

Audit & Supervisory Committee

Audit &
Supervisory
Board
Members

Nominating Committee

internal member serving on a full-time basis. Under
the Companies Act, external directors must commanda majority on the Audit & Supervisory Committee.
Ensuring this ratio is higher than the statutory minimum

BANDO CHEMICAL INDUSTRIES, LTD.

Appointment

AttendanceCompensation Committee

Audit/
Supervision

Assistant
Cooperation

President

4¥54 million¥7 million
or less monthly

Consultation
Management Advisory Council

Internal Audit Department/
Administrative division

The Audit & Supervisory Committee is composed ofthree members serving as external directors and one

Audit & Supervisory Committee

Consultation

Management Advisory Council to assist the president

36

the Internal Control Promotion Office and based on

CSR Promotion Committee

Total

10

¥146 million

Legal Compliance Committee
Education

Business
execution

Audit

Accounting
audit

Accounting Auditors

Administration

Monitor

The Company and subsidiaries

Annual Report 201637

Corporate Governancetimely information disclosure by the General

Principle 3.1 Full Disclosure

members, any proposals are approved by theCompliance Promotion

Administration Department. In addition, the Company

1. Details of the Company’s Management Philosophy

Board of Directors following Audit & Supervisory

The Group has formulated and distributes to all

has established a system to facilitate the timely disclo-and mid-to-long term business plans are provided inGroup executives and employees the Bando Groupsure of information to stock exchanges and discloses

this Annual Report (p. 1, p. 24) and on the Company’s

Code of Conduct, which stipulates proper actions insuch information on the Company website.

website.

4. Any internal candidates for appointment to a direc-

such areas as “compliance with laws and corporate

http://www.bando.co.jp/eng/corporate/index.html

tor’s position must satisfy the nomination criteria

ethics,” “product and service safety,” “honest andhttp://www.bando.co.jp/eng/ir/index.html

listed below.

procurement transactions.” In addition, the Group

Disclosures Based on Principles of Japan’s
Corporate Governance Code

2. Details of the Company’s basic stance on corporate

works to raise awareness of compliance by designating

The Company complies with the principles of thegovernance and related policies are provided in thisPhilosophy,” “Our Corporate Goals,”

October as the Bando Group Corporate Ethics Month,

Corporate Governance Code.

Annual Report (p. 36).

“Management Policy,” and the “Group Code offair business activities,” and “fair and equitable(1) Adequate comprehension of, and the ability

conducting training sessions on the Bando Groupto implement, the Company’s “Management

Conduct”

Code of Conduct at Company business facilities or

Principle 1.4 Cross-Shareholdings

domestic and overseas affiliates every other year,

Cooperative relationships with a range of firms acrossof how remuneration for directors was determinedshareholders and corporate value, coupled withand providing opportunities to discuss these topics

fields such as financing, development, procurement,

before March 31, 2016. From fiscal year ending

the ability to display strong leadershipinternally. Moreover, the Group has established a

production and sales are essential if the Company

March 31, 2017, onward, remuneration of executive

system to further promote compliance by adopting an

is to prevail as a manufacturer of rubber and plastic

directors will consist of basic salary, a profit-linked

internal reporting system that includes external lawyers

components against fierce global competition. The

bonus and performance-linked stock remuneration,(4) Strong business ethics and high integrity andas well as a service for providing information on the

Company’s policy is to own shares in suppliers where

while non-executive directors are entitled only tovalue Candidates for nomination as external

formulation, revision and abolition of relevant laws.

it is judged that, in line with business strategy, main-a basic salary. Limits on director remuneration are

director must have the capacity to provide inde-taining or strengthening stable, long-term commercial

determined by resolution of the General Meeting ofpendent oversight of operational execution and

3. Please refer to p. 36 of this Annual Report for details(2) Strong determination to maximize value for(3) Ability to make practical, mature business decisions in a management capacity

relationships with such firms would contribute to the

Shareholders. Current maximum annual remunera-

counsel and advice to contribute to sustainedInternal Auditsenhancement of the Group’s corporate value over thetion is set at ¥190 million for all directors not serving

growth in corporate value, based on an appre-

The Company has established the Internal Audit

mid-to-long term.

as members of the Audit & Supervisory Committee,

ciation of corporate management and businessand at ¥84 million for all directors serving as Audit &strategy.

Department, an independent organization that is

Decisions relating to the exercise of any voting

staffed by three people reporting directly to therights pertaining to cross-shareholdings are taken

Supervisory Committee members. Besides this direct

president. The Internal Audit Department implements

based on a general consideration of whether themonetary remuneration, directors are collectively

Candidates for nomination as director serving as

systematic and comprehensive internal audits (which

proposed voting resolution is (a) consistent with theentitled to annual grants of performance-linked

an Audit & Supervisory Committee member must

include the internal control system) of all depart-aforementioned policy, and (b) likely to contribute tostock remuneration of up to ¥50 million that are held

have the capacity to conduct auditing and oversightments as well as domestic and overseas affiliates.

the enhancement of the corporate value of the equity

in trust (this excludes non-executive directors). Any

activities from general and specialist viewpoints,

Accompanied by audit & supervisory board members,

issuer over the medium and long term.

remuneration for directors is separate to salary andbased on an appreciation of aspects of businessbonuses to which they are entitled for any concurrent

such as management, finance, accounting and risk

position as an employee.

management. The Articles of Incorporation set thethe Internal Audit Department conducts on-site audits
within the Company and at affiliates, the results ofPrinciple 1.7 Related Party Transactions

which are reported to the president, directors andAny related party transactions involving the Company’s

audit & supervisory board members.

directors or major shareholders must be approved andremuneration for directors, the Company has

not serving and five for directors serving on thereported in accordance with internal rules to prevent

instituted the Compensation Committee, which is

Audit & Supervisory Committee.

		To ensure greater transparency in determining

maximum numbers of directors as 10 for directors

any transactions that would be detrimental to thecomposed of the president, a director serving as an

Information Disclosureinterests of the Company or shareholders. The status

Audit & Supervisory Committee member, and anof directors, the Company has instituted the

The Company promotes fair and highly transparentof any transactions between the Group and directors

external director. The Board of Directors approves

Nominating Committee, which is composed ofmanagement by disclosing important information in anor their close relatives (within two degrees of kinship) is

proposals for director remuneration based on

the president, a director serving as an Audit &appropriate and timely manner to shareholders and all

subject to periodic reporting.

the deliberation and advice of the Compensation

Supervisory Committee member, and an externalCommittee. With regard to the remuneration of

director. The Board of Directors approves any

directors serving as Audit & Supervisory Committee

candidates for appointment to director based onother stakeholders.
The Company maintains PR functions that include

38

Committee consultation.

BANDO CHEMICAL INDUSTRIES, LTD.

To ensure greater transparency in appointment

Annual Report 201639

Corporate Governancethe deliberation and advice of the Nominating

Takahiro Matsusaka

Supplementary Principle 4.11.1

basic knowledge of the Company’s operations, andCommittee. With regard to the appointment of any

Many years of experience and related business

The Company ensures that the composition ofopportunities are provided to visit offices and factories

directors serving as Audit & Supervisory Committee

knowledge gained working in managerial positions in

the Board of Directors includes a diverse range ofin Japan and abroad as deemed appropriate.

members, nominations are confirmed by the Board

financial institutions afford Mr. Matsusaka the capacity

talented people of impeccable character with suitableof Directors after their approval by the Audit &to conduct auditing and oversight activities fromexperience and knowledge, taking into consideration

Principle 5.1 Policy for Constructive Dialogue

Supervisory Committee, based on the advice of thegeneral and specialist viewpoints. He is not influenced

the business environment and the related issues facedwith Shareholders

Nominating Committee.

by the views of Sumitomo Mitsui Banking Corp. (SMBC),

at the time. With regard to the size of the Board, toRegarding all shareholders and investors as importanta major business partner of the Company, due to theensure lively and frank exchanges of opinion, the limits

stakeholders, the Company believes it is important toSupplementary Principle 4.1.1

12 years that he has spent working at other companies

on the number of directors have been set at 10 for

deepen mutual understanding based on a constructive

Besides any statutory items or other matters as

since leaving SMBC. Moreover, it is judged that thedirectors not serving and five for directors serving on

dialogue about how to enhance corporate value and to

stipulated in the Articles of Incorporation, the Board

Company’s decision-making is not subject to any

the Audit & Supervisory Committee.

use such dialogue as the basis for proper managementof Directors deliberates and determines importantundue influence by SMBC since (a) the Company con-matters related to business execution as stipulated inducts business with a number of financial institutions,the regulations pertaining to the Board of Directors,(b) business with SMBC is conducted on the same

Directors concurrently occupy the following positions

dialogue in coordination with the central departments

including management policies and plans,

terms as with other banks, and (c) loans from SMBC

with other listed companies.

responsible for finance, general affairs and corporate

personnel-related decisions, plans for financing

are equivalent to only about 5% of the Company’s

and capital investment, and the establishment or

total assets. Hence, since there is no conflict of interest

Takahiro Matsusaka

foreign institutional investors, and disclosure of

dissolution of subsidiaries or affiliates. Responsibility

with ordinary shareholders as defined by the Tokyo

Corporate Auditor, Fukui Belt Industries, Ltd.

information such as the details and progress offor deciding other items of business is delegated by

Stock Exchange, Mr. Matsusaka has a high degree of

Takashi Shigematsu

business plans, Group performance, and returns to

the Board to the president. In addition, in accordance

independence.

Chairman & Representative Director, Fujitsu Ten Limited

shareholders. In these meetings, the president and theOutside director, Murata Manufacturing Co., Ltd.

senior management of the Company seek to engage

with Japanese laws and regulations and the Articles

in charge of administrative functions oversees theplanning and provides briefings to domestic andof Incorporation, with the Company’s transition to a

Takashi Shigematsu

Company with an Audit & Supervisory Committee,

Many years of experience gained working as an

Supplementary Principle 4.11.3

term creation of corporate value so that stakeholder

some important business matters have been delegatedengineer or manager in manufacturing firms and a

The Company has analyzed and evaluated theviews can better be reflected in the management ofto the president. To help improve the speed andrelated wealth of knowledge enable Mr. Shigematsu

effectiveness of the Board of Directors at its meetings

the business. The full online disclosure of any materials

efficiency of business execution, the president can

to conduct auditing and oversight activities from anheld in 2015. This involved directors and Audit &presented at such meetings via the Company’s website

delegate authority to make decisions on these matters

independent perspective. In addition, the lack of any

Supervisory Committee members each completing aensures fair disclosure to individual investors and share-

to corporate executive officers as appropriate.

special relationship between the Company and Fujitsu

self-evaluation questionnaire on the operation of theholders. Since the General Meeting of Shareholders

in dialogue with institutional investors about long-

Ten Limited means that there is no conflict of interest

Board of Directors. The Board chairperson conductedalso provides another valuable opportunity to engage

Principle 4.9 Independence Standards andwith ordinary shareholders as defined by the Tokyoan analysis and evaluation and reported the resultswith shareholders, the Company seeks to avoid holding

Qualification for Independent Directors

Stock Exchange, and that Mr. Shigematsu has a highto the Board for internal discussion. The exercise

it on the most popular dates, and also ensures that

In nominating candidates for independent director, thedegree of independence.

concluded that the Board’s lively discussion based

adequate time is allocated to the Q&A session.

Nominating Committee ensures that such persons sat-

40

policy. In line with such thinking, the executive director
Supplementary Principle 4.11.2

on multi-faceted viewpoints supported its effective

The content of dialogue with shareholders andisfy the independence criteria set by stock exchanges

Haruo Shimizu

and are also capable of fulfilling their role andMany years of experience gained working as a man-responsibilities from an independent standpoint. Theager in manufacturing firms and a related wealth ofSupplementary Principle 4.14.2

has also instituted policies on disclosure and insider

rationales for the appointment of those independent

knowledge enable Mr. Shimizu to conduct auditing and

The Company provides directors with training as

trading as part of efforts to prevent any occurrence of

directors serving as of June 23, 2016 are summarized

oversight activities from an independent perspective.

required on or after appointment through training

insider trading.

below.

In addition, the lack of any special relationship between

seminars, the provision of literature regarding

the Company and EXEDY Corporation means that

directorial roles and responsibilities, and by providing

there is no conflict of interest with ordinary sharehold-other opportunities to acquire required knowledge

ers as defined by the Tokyo Stock Exchange, and thatat the Company’s expense. External directors are

Mr. Shimizu has a high degree of independence.

provided with materials and explanation to ensure a

BANDO CHEMICAL INDUSTRIES, LTD.

operation.

investors is reported as necessary to the Board of
Directors and executive officer meetings. The Company

Annual Report 201641

Message from an External Director

Management (As of June 23, 2016)

Striving to Maximize Corporate Value by
Supporting the Growth of a Global Enterprise
Focused on Localized Businesses

Board of Directors

and will help to further increase its corporate value.
Bando is a global enterprise that generates
almost half of its net sales outside Japan, with theCompany holding the top share of the Asian market
for automotive power transmission belts. Throughout
its 110-year history, Bando has achieved growth while
maintaining close ties with local communities centered

President andRepresentative Director:

Representative Director:

Yoshihisa Tamagaki

Kyosuke Nakamura

Member of the Board(Audit & Supervisory
Committee Member):Member of the Board(Audit & Supervisory
Committee Member):Member of the Board(Audit & Supervisory
Committee Member):

Takahiro Matsusaka

Takashi Shigematsu

Haruo Shimizu

Mitsutaka Yoshii

Member of the Board:

Member of the Board:

Shinji Kashiwada

on the city of Kobe, where the Company was founded.
As a banker, I have been involved with the growth ofa large number of companies over the past 30 years
or so. Every company that has evolved into a global
enterprise has attached great importance to the

Takahiro Matsusaka
External Director(Chair of the Audit & Supervisory Committee)

strengths developed in the local communities where its
business originated. The overseas business of Bandois expected to continue growing in the years ahead.
While continuing to diligently preserve the DNA it hasdeveloped in Japan, I urge the Company to continue

In June 2014, I was appointed as an auditor of Bando
Chemical Industries, Ltd. assuming responsibility for

The Bangalore Plant, which was opened in Indiaa crucial part of its corporate governance. Bando hasin 2013, is a case in point. Although the Company

been actively implementing measures to enhance

faced various issues when the plant was first opened,

its corporate governance system before they were

the Company went on to successfully establish

required by the amendments to the Companies Act

recruitment, marketing and production activities closelyof Japan that came into force in 2015, and Japan’s

tied to the local community. Today, the Bangalore Plant

Corporate Governance Code. These measures have

has grown into a key earnings driver for the entire

included the appointment of external directors, along

Group. Needless to say, this success was underpinned

with the establishment of a Nominating Committee andby the experience and expertise developed by thea Compensation Committee. Moreover, I believe that

Company in the course of fostering close ties with local

the Company’s corporate governance is functioning

communities in Japan.

(External)(External)

Corporate Executive Officers
President:

Senior Executive Officers:

Executive Officers:

Mitsutaka Yoshii

Yoshihisa Tamagaki

Joseph David Laudadio

Kyosuke Nakamura

Katsuhiko Hata

effectively not just in form but also in substance, with

Guided by the knowledge I have developed as

open and lively discussions held in meetings of thea banker, I am committed to fulfilling my roles andShinji Kashiwada

Katsuya Yamaguchi

Board of Directors. In June 2016, Bando transitioned

responsibilities as a director and an Audit & Supervisory

Masao Ohara

Takayuki Nagase

to a Company with an Audit & Supervisory Committee,

Committee member, thereby helping to drive further

Keiji Iwai

Kazuyuki Mamba

and I was appointed as a director who is an Audit andgrowth at the global enterprise that is Bando Chemical

Supervisory Committee member. I believe that thisIndustries.

Masayuki Kitabayashi

Satoshi Matsuo

Hisashi Samejima

Atsushi Someda

transition has reinforced Bando’s corporate governance42transferring this DNA into its overseas markets.

BANDO CHEMICAL INDUSTRIES, LTD.

Annual Report 201643

Management’s Discussion and Analysis

Operating Environment
During the fiscal year ended March 31, 2016, theUnited States economy continued to expand steadily
due to higher employment and consumer spending. In
Europe, economies recovered despite the heightened
geopolitical risks. Meanwhile, in Asia, there wasinstability in the ASEAN region due to the effects ofan economic slowdown in China. In Japan, the modest
pace of economic recovery was maintained due toeffective fiscal and monetary policies, but uncertainty
over a slowdown in the global economy persisted.
In the automotive market, a key sector for theBando Group, automobile production remained
firm in the United States and Europe. Poor sales in
China in the first half of the year caused a widespreadcorrection in output, but positive year on year growth
in production was seen in the second half after thegovernment moved, in October 2015, to cut taxes
levied on sales of small cars. In Japan, production fellin year on year terms due to the effects of the surge
in demand for subcompacts prior to the consumption
tax hike. Demand in the industrial machinery field was
supported by firm capital investment in Japan and agentle recovery in domestic housing, a main market for
high-performance films.

Business Overview
Fiscal 2015 was the third year of the first stage of theGroup’s “Breakthroughs for the future” mid-to-longterm business plan covering the period of fiscal 2013 to
fiscal 2022. We focused our efforts on increasing salesof transmission belts for automobiles, two-wheeledvehicles, agricultural equipment and general industrial

Net sales*
Net sales*

applications, and of light-duty conveyor belts. We continued to develop the Group’s customer base, notably
across Japan, China and the ASEAN region.
Efforts to develop belts and other new products,
including the C-STRETCHTM elastic strain sensor in
the new business development field, continued. To
improve profitability, we worked to reduce costs andenhance global competitiveness by developing optimum global purchasing, production and distributionfunctions.

Operating Results
Consolidated net sales in the fiscal year ended March
31, 2016 were ¥93,272 million, a decline of 2.2% year
on year, despite efforts as outlined above. This wasdue mainly to the effects of the appreciation of the yen
starting in the fourth quarter of the year.
Operating income rose 24.3% year on year, to¥5,961 million, thanks in part to the results of efforts to
reduce costs.
Despite the SG&A ratio rising 1.1 percentage
points to 22.7%, reflecting labor costs increase, thecost-to-sales ratio improved 2.5 percentage points to
70.9% due to successful efforts to reduce costs. As aresult, the operating margin improved by 1.4 percentage points to 6.4%.
Profit attributable to shareholders of the parentrose 16.7% year on year to ¥4,386 million. This reflected
increase in income and the absence of impairment loss
on fixed assets recorded in fiscal 2014.

Operating Results by Business Segment
Belt Business
Sales of automotive accessory drive power transmission
belts fell overall due to decline in automobile production in Japan despite increased automobile production
in overseas markets. Sales of automotive accessory
drive power transmission system products also fell due
to poor demand in Japan and Asia.
Sales of variable speed belts for scootersincreased in Asia.
Sales of industrial power transmission belts andbelts for agricultural machinery grew due to the success of efforts to develop markets in the United States,
China and the ASEAN region.
Despite steady growth in steep-incline conveyor
belts, sales of conveyor belts for resource development
decreased due to the fall in resource prices.
In resin conveyor belts (Sunline™ Belts), sales ofbelts for food machinery manufacturing process rose
in Japan. However, overseas sales fell, reflecting lower
capacity utilization among food production facilities in
China.
Segment net sales decreased 2.8% year on yearto ¥75,878 million. Segment profit rose 26.3% to ¥5,248
million, reflecting a drop in raw material prices accompanying a decline in naphtha prices, along with cost
reduction efforts and gains in profitability at overseas
production sites from higher output.
Advanced Elastomer Products BusinessIn precision performance products, sales of high-performance rollers and precision belts were sluggish due
to a decrease in production of office machinery by

Profit attributable to shareholders of the parent*

Operating income*Operating income*manufacturers based in China and other parts of Asia.
In high-performance film products, lower salesof films for industrial use were offset by higher salesof films for decorative displays, including films forconstruction materials and inkjet-printable wallpaper
media BANDO GLANMESSE™. This was due to thesuccess of our proactive marketing activities.
Segment net sales fell 0.6% year on year to¥15,620 million. Segment profit rose 131.0% to ¥759
million, reflecting the growth in sales of high-valueadded products and successful efforts to reduce costs.
Other Business
Bando is engaged in other business, such as the
manufacture and sales of robot-related devices. Salesin other business declined 0.6% year on year to ¥2,631
million. Segment profit increased 39.2% to ¥276 million.

Financial Position
Total assets as of March 31, 2016 amounted to ¥90,765
million, a decrease of ¥3,935 million year on year.
Current assets decreased by ¥1,599 million due todecrease in notes and accounts receivable–trade, whileproperty, plant and equipment fell by ¥2,335 million.
Total liabilities decreased by ¥2,363 million compared with the previous year-end to ¥35,560 million.
Current liabilities decreased by ¥991 million due to afall in short-term borrowings, and long-term liabilities
fell by ¥1,372 million.
Net assets decreased ¥1,571 million from theprevious fiscal year-end to ¥55,205 million.
Retained earnings increased ¥3,351 million
due partly to the recording of profit attributable toshareholders of the parent, and accumulated other

Net assets
Total assets*
Net assets(¥ million)
100,000(¥ million)
100,000
80,00086,37285,77286,372
84,811

93,43485,772

95,396
93,272
95,39693,434

5,961(¥ million)
6,000(¥ million)

5,518

6,000

5,056
4,571

80,0004,000
60,000

4,571
4,095

4,000

5,518
4,797

(¥ million)
5,000

4,095

3,757

4,000

3,000

2,000

40,0002,000

80,00079,65982,20740,0001,440

89,623

94,70056,77760,0002,510

60,00040,000

4,386

4,280
4,797

Total assets(¥ million)
100,000

39,444

43,22649,27790,76555,2052,000
20,0001,000

20,00020,000
0
0

2012
2011

2013
2012

2014
2013

* Fiscal year endings are March 31.

44

BANDO CHEMICAL INDUSTRIES, LTD.

2015
2014

2016
2015

0
0

2012
2011

2013
2012

2014
2013

2015
2014

2016
2015

0

2012

2013

2014

2015

2016

0

2012

2013

2014

2015

2016

* Fiscal year endings are March 31.

Annual Report 201645

Management’s Discussion and Analysis

comprehensive income decreased ¥4,698 million largely
on foreign currency translation adjustments. As a result,the equity ratio increased 1.0 percentage points from
59.4% at the previous fiscal year-end to 60.4%.

Capital Investment and Fund Procurement
Capital investment undertaken in the fiscal year-ended
March 31, 2016 totaled ¥4,676 million. Major capital
investment items are shown below. The financing
required was obtained from the following sources: theCompany’s own funds, the liquidation of notes andaccounts receivable, and borrowings.
Business
Segment
Automotive
Parts BusinessIndustrial
Products
Business
Advanced
Elastomer
Products
BusinessAmount(¥ million)

Main Activities¥1,736

Improved manufacturing
equipment, renewed molds

1,111

Installed new manufacturing
equipment, developed new
manufacturing process

855

Streamlined and improved theenergy efficiency of manufacturing
equipment, improved
manufacturing processes

Other

974

Installed new system and researchequipment

Total¥4,676

Cash Flow
Net cash provided by operating activities totaled¥9,038 million, compared with ¥8,061 million in theprevious fiscal year, with the recording of income
before income taxes of ¥6,086 million and depreciation
and amortization of ¥4,321.
Net cash used in investing activities was ¥4,184
million, compared with ¥3,931 million used in the previous fiscal year. This was primarily due to the bookingof ¥3,883 million in expenses for purchases of property,
plant and equipment.
Net cash used in financing activities was ¥3,049
million, compared with ¥2,472 million in the previous
fiscal year, largely reflecting cash dividends paid
totaling ¥1,035 million and payments on long-termborrowings of ¥2,049 million.
As a result, cash and cash equivalents as ofMarch 31, 2016 totaled ¥16,436 million, up ¥738 million
compared with the previous fiscal year-end.

46

BANDO CHEMICAL INDUSTRIES, LTD.

Earnings Forecasts for
the Year Ending March 31, 2017
The macro economy in the fiscal year ending March
31, 2017 is expected to decelerate. Chinese economy
is expected to slow down due to the issues of excess
production capacity and the high debt burden, withother developing economies also slowing due tolow resource prices. These impacts are expected toaffect the United States and Europe, where growth inconsumer spending has held up to date.
In Japan, there are concerns over impacts fromoverseas economic slowdown despite expectations ofpositive effects from financial policies and recovery indomestic demand.
Based on this prognosis, the Group will take priority measures in the fourth year of the “Breakthroughsfor the future” mid-to-long term business plan. We
forecast consolidated net sales of ¥94,000 million, up
0.8% year on year, operating income of ¥6,000 million,
up 0.7%, and profit attributable to shareholders of theparent of ¥4,500 million, up 2.6%.

Business Risks
The Group considers the following to be important risks related to the performance and financial
position of the Bando Group that could have a material effect on the decisions of investors. The
forward-looking statements listed in this document are based on judgments made by the Group asof March 31, 2016.

The Group primarily uses foreign exchange contracts to

Raw Material Market Fluctuations andProcurement

hedge the risks associated with the significant number

The Group negotiates with business partners regardingof foreign currency receivables it currently carries, anddelivery dates and prices by closely examining market

will implement other appropriate measures to hedge

prices as well as supply-demand circumstances, but

against such risks in the future.

there could be sharply rising raw material prices

Increasing Overseas Transactions

Nevertheless, the Group’s performance could beaccompanying higher crude oil prices. Accordingly,

adversely affected by fluctuations in foreign currency

the Group promotes research on alternative materials

exchange rates. In addition, the Group’s performance

to stabilize supply and demand; revises and increases

and financial position could be adversely affected byproduct prices in response to rising raw materialchanges in economic conditions in individual regions,prices; and strengthens measures to reduce overall

despite efforts to strengthen its overseas production

costs. Nevertheless, the Group’s performance could

and sales systems.

be adversely affected by a downturn in demand, or
prolonged increases in material and/or fuel prices that

Basic Policy Regarding
the Distribution of Profits
The Company’s basic policy is to enhance profits andmaintain stable dividend payments to shareholders
while taking into consideration its earnings position.
In addition, distribution of profits is based on an
examination of total shareholder returns, including
share repurchases. Internal reserves are invested overthe long term in such areas as R&D; new product,
production technology and market development; thestrengthening of business structure; internationalization; and the expansion into new business domains.
In line with this basic policy, we paid the year-end
dividend of ¥6 for the fiscal year ended March 31, 2016,up ¥1 from the previous fiscal year end, resulting in theannual dividend of ¥12 per share, up ¥2 from the previous fiscal year. In March to April 2016, the Company
also conducted a share buyback capped at ¥1.0 billion.
The Company conducted one-for-two reverse
stock split* on October 1, 2016, and we plan to pay a
dividend of ¥12 in the current fiscal year (equivalent to
the previous year-end dividend of ¥6 per share before
the reverse stock split.)

exceed expectations.

Recalls
As a components manufacturer, the Company delivers
items to automotive, office automation equipment,

Earthquakes and Other Natural Disasters

consumer product and other manufacturers.

There are indications that a major earthquake could

In addition, its subsidiaries and affiliates mainly

occur in the Tokai, Tonankai or Nankai regions of

manufacture, process and sell these parts. Considering

Japan. In addition, the potential for typhoons andproduct quality to be of paramount importance forfloods exists. In the event of such a disaster, businessmaintaining and developing current business oper-

sites including the Nankai Plant could sustain damage

ations, the Group focuses on implementing various

to production or other facilities, potentially leading toinitiatives to ensure product quality to the maximum

a temporary cessation of operations. Accordingly, eachextent possible. However, recalls and other actionsof the Company’s four plants has formulated a businesscould arise in cases where defects in automobiles andcontinuity plan (BCP) based on the assumption that

other items are caused by products (components)

it could be damaged under such circumstances.

supplied by the Group.

The BCPs include creating mechanisms to minimize

In such cases, the Group will likely be required todisruptions to operations, notably the formulation ofcover all obligatory legal or contractual costs of recalls

repair plans and the supplementary supply of products

and other actions, which could adversely affect theby overseas plants. Nevertheless, the Group’s perfor-

Group’s performance.

mance could be significantly impacted by disasters,
depending on the size of the disaster.

* This also included a reduction in the size of the minimum
share-trading unit from 1,000 shares to 100 shares.

Annual Report 201647

Consolidated Balance Sheets
Bando Chemical Industries, Ltd. and Consolidated Subsidiaries
March 31, 2016 and 2015

Thousands of
U.S. dollars

Millions of yen

2016

Assets2015

2016

Time deposits

2016

2015

2016

¥ 1,555¥ 2,739$ 13,809

3,513

1,996

31,196

		Trade9,908

11,25487,977

Liabilities and Net Assets
Current Liabilities:

Current Assets:
Cash and cash equivalents

Thousands of
U.S. dollars

Millions of yen¥ 16,436¥ 15,697$ 145,938

545

502

4,840

Short-term borrowings
Current portion of long-term debt
Notes and accounts payable:

Notes and accounts receivable:
		Trade16,731

18,358148,568

		Other

265

87

2,352

		

Electronically recorded obligations — operating

2,767

3,035

24,5701,617

965

14,362

		Construction and other

(38)

(31)

(340)

10,50911,801

Deferred tax assets

458

Other current assets

		Electronically recorded monetary claims — operating		

Allowance for doubtful accounts

Inventories

Total Current Assets

3,587

3,131

31,855

Income taxes payable

439

431

3,898

93,307

Provision for loss on liquidation of subsidiaries and associates

31

—

272

606

4,070

Other current liabilities

3,180

3,385

28,234

997

1,135

8,857

24,98025,971

221,81147,52049,120421,954
Long-term debt

7,548

9,801

67,025Net defined benefit liability

2,918

2,058

25,909Other long-term liabilities

114

93

1,010

10,58011,952

93,944

10,952

10,952

97,247

Total Current Liabilities
Long-term Liabilities:

Total Long-term Liabilities

Property, Plant and Equipment:
Land

6,507

6,768

57,782

Buildings and structures

27,60527,892

245,117

Machinery and equipment

55,942

56,797496,732

Construction in progress

1,508

1,349

13,390		

Authorized: 378,500,000 shares

Other

13,281

13,442

117,921		Issued 2015 and 2016 — 94,427,073 shares

104,843

106,248

930,942

Capital surplus

2,970

2,968

26,374

Accumulated depreciation(75,356)(75,158)(669,117)

Retained earnings

42,091

38,740373,741

Property, Plant and Equipment, Net

29,48731,090261,825

Treasury stock, at cost

Net Assets:
Common stock		2015 — 378,000 shares		2016 — 654,165 shares

Total Shareholders’ Equity

(257)

(114)

(2,279)55,75652,546495,083

1,431

2,061

12,7101(0)3

Accumulated other comprehensive income
Other Assets:

Unrealized gains on available-for-sale securities

Intangible assets

1,189

1,375

10,556

		

Deferred gains (losses) on hedges

Investments in securities

5,287

6,262

46,944		Foreign currency translation adjustments(1,170)2,171(10,387)

Investments in affiliates

5,041

5,266

44,755		Remeasurements of defined benefit plans(1,232)(504)(10,942)

966

207

8,575

Total Accumulated Other Comprehensive Income

(970)

3,728

(8,616)

1,275

1,380

11,332

419

503

3,719

Deferred tax assets
Other, net
Total Other Assets
Total Assets

48

		

BANDO CHEMICAL INDUSTRIES, LTD.

13,75814,490122,162¥ 90,765¥ 94,700$ 805,941

Non-controlling interests
Total Net Assets

55,20556,777490,186

Total Liabilities and Net Assets¥90,765¥94,700$805,941

Annual Report 201649

Consolidated Statements of Income andConsolidated Statements of Comprehensive Income

Consolidated Statements of Changes in Net Assets
Bando Chemical Industries, Ltd. and Consolidated Subsidiaries
Years ended March 31, 2016 and 2015

Bando Chemical Industries, Ltd. and Consolidated Subsidiaries
Years ended March 31, 2016 and 2015

Consolidated Statements of Income

Millions of yen

Number ofshares ofcommonstock
outstanding

Commonstock

CapitalsurplusRetainedearnings

Treasurystock,
at costUnrealized
gains (losses)
Foreign
on available- Deferredcurrency
for-sale gains (losses) transaction
securities on hedges adjustments

Remeasurementsof defined
benefitplans

Noncontrollinginterests

Total
net assets¥  (852)¥(1,049)¥505¥49,277

—

—

—

—

149

1,498

4

(852)

(1,049)505

49,426

—

—

—

—

—

—

3,758

(941)

—

—

—

—

—

—

(941)

—

(12)

—

—

—

—

—

(12)

421

—

—

—

—

—

—

421

2016

2015

2016

Net Sales
Cost of Sales
Gross profit¥93,272
66,097
27,175¥95,396
69,99725,399$828,202
586,901
241,301

Balance at April 1, 2014

94,427¥10,952¥2,968¥35,353¥(102)¥1,498¥ 4

Selling, General and Administrative Expenses
Operating income

21,214
5,961

20,602
4,797

188,373
52,928Cumulative effects of changes
in accounting policies

—

—

—

149

—

—

Restated Balance
at April 1, 2014—

10,952

2,968

35,502

(102)

260
(288)
509
(148)
24
(306)
(92)
(92)
258
125
6,086

220
(320)
646
223
—
(42)
(410)
—
206
523
5,320

2,307
(2,558)
4,522(1,313)214(2,719)
(816)
(819)
2,295
1,113
54,041

Profit attributable toshareholders of the parent

—

—

—

3,758

Cash dividends

—

—

—

Purchases of treasury stock

—

—

—

Change in fiscal year-end of
consolidated subsidiaries

—

—

—

1,598
0
30
1,628
4,458

1,503
—
(33)
1,470
3,850

14,1883
270
14,461
39,58072¥ 4,38693¥ 3,757633$ 38,947

Other Income (Expenses):
Interest and dividend income
Interest expense
Equity in earnings of affiliates
Foreign exchange gains (losses), net
Gain on sale of investments in securities
Loss on disposal of property, plant and equipment
Impairment loss
Provision for loss on liquidation of subsidiaries and associates
Other, net
Income before income taxes
Income Taxes:
Current
Prior years
DeferredProfitProfit Attributable to Non-Controlling Interests
Profit Attributable to Shareholders of the Parent

Yen
Per Share of Common Stock
Basic net income
Cash dividends

U.S. dollars

2016

2015

2016

¥46.6512.00¥39.95
10.00

$0.41
0.11

Thousands of
U.S. dollars

Millions of yen

50

Thousandsof shares

Thousands of
U.S. dollars

Millions of yen

Consolidated Statements of Comprehensive Income

2016

2015

2016

ProfitOther Comprehensive Income:Unrealized gains (losses) on available-for-sale securities
Deferred gains (losses) on derivative instruments
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Share of other comprehensive income in affiliates
Total other comprehensive income
Comprehensive Income¥ 4,458¥3,850$ 39,580(636)
1(3,063)(729)(293)(4,720)¥  (262)

567
(1)
3,378
546
218
4,708
¥8,558(5,647)
4(27,197)(6,472)(2,597)(41,909)$ (2,329)

Comprehensive Income Attributable to:Shareholders of the parent
Non-controlling interests¥  (312)50¥8,408150$ (2,773)
444

BANDO CHEMICAL INDUSTRIES, LTD.

Net change in the year

—

—

—

—

—

563

(4)

3,023

545

(2)

4,125

94,427

10,952

2,968

38,740

(114)

2,061

(0)

2,171

(504)

503

56,777

Cumulative effects of changes
in accounting policies

—

—

—

—

—

—

—

—

—

—

—

Restated Balance
at April 1, 2015—

10,952

2,968

38,740

(114)

2,061

(0)

2,171

(504)

503

56,777

Profit attributable toshareholders of the parent

—

—

—

4,386

—

—

—

—

—

—

4,386

Cash dividends

—

—

—

(1,035)

—

—

—

—

—

—

(1,035)Purchases of treasury stock

—

—

—

—

(143)

—

—

—

—

—

(143)

Disposal of treasury stock

—

—

0

—

0

—

—

—

—

—

0

Change in ownership interestof the parent arising fromtransactions with
non-controlling shareholders

—

—

2

—

—

—

—

—

—

—

2

(3,341)

(728)

(84)

(4,782)¥(1,170) ¥(1,232)¥419¥55,205

Balance at April 1, 2015

Net change in the year

—

—

—

—

—

(630)

1

Balance at March 31, 2016

94,427¥10,952¥2,970¥42,091¥(257)¥1,431¥ 1

Thousands of U.S. dollars

Commonstock

CapitalsurplusRetainedearnings

Treasurystock,
at costUnrealized
gains (losses)
Foreign
on available- Deferredcurrency
for-sale gains (losses) transaction
securities on hedges adjustments$97,247$26,356$343,985$(1,020)$18,298$(2)$ 19,278$  (4,469)$4,467$504,140

—

—

—

—

—

—

—

—

—

—

97,247

26,356

343,985(1,020)18,298(2)

19,278(4,469)4,467

504,140

Profit attributable toshareholders of the parent——

38,947

—

—

—

—

—

—

38,947

Cash dividends——(9,191)

—

—

—

—

—

—

(9,191)

Purchases of treasury stock

—

—

—

(1,262)

—

—

—

—

—

(1,262)

Disposal of treasury stock

—

2

—

3

—

—

—

—

—

5

Change in ownership interestof the parent arising fromtransactions with
non-controlling shareholders

—

16

—

—

—

—

—

—

—

16

—

—

—

(5,588)

5(29,665)(6,473)(748)(42,469)$26,374 $373,741 $(2,279)$12,710$3$(10,387) $(10,942)$3,719$490,186

Balance at April 1, 2015
Cumulative effects of changes
in accounting policies
Restated Balance
at April 1, 2015

Net change in the year—

Balance at March 31, 2016

$97,247

Remeasurementsof defined
benefitplans

Noncontrollinginterests

Total
net assets

Annual Report 201651

Consolidated Statements of Cash Flows

Corporate Data / Investor Information

Bando Chemical Industries, Ltd. and Consolidated Subsidiaries
Years ended March 31, 2016 and 2015

Thousands of
U.S. dollars

Millions of Yen
2016

2015

2016

¥ 6,086¥ 5,320$ 54,041(1,849)(2,480)(16,405)

Company name:Cash Flows from Operating Activities:
Income before income taxes
Adjustments for:
Income taxes paid

Corporate Data
Founded:April 14, 1906

Capital:¥10,952 mil. (As of March 31, 2016)

234

8

2,073

Consolidated sales:

4,321

4,386

38,368

Employees (Consolidated): 3,920 (As of March 31, 2016)

Amortization of goodwill and negative goodwill

10

3

88

Impairment loss

92

410

816

Increase (decrease) in allowance for doubtful accounts

30

(5)

269

Increase in provision for loss on liquidation ofsubsidiaries and associates

32

—

283

(144)

24

(1,281)

56

(26)

493

Equity in earnings of affiliates

(509)

(646)

(4,522)

Shares Authorized:

378,500,000

Loss on sales and disposal of property, plant and equipment

257

15

2,278

Shares Outstanding:

94,427,073

Income taxes refunded
Depreciation and amortization(Decrease) increase in liability for retirement benefits
Foreign exchange losses (gains), net

(8)

559

(73)

Decrease (increase) in inventories

634

(282)

5,628

Decrease in notes and accounts payable — trade

(810)

(557)

(7,193)

606

1,332

5,390

9,038

8,061

80,253(Increase) decrease in notes and accounts receivable — trade

Other, net
Net Cash Provided by Operating Activities

Investor Information (As of March 31, 2016)

(94)

(143)

(836)

(3,883)(2,945)(34,475)

Proceeds from sales of property, plant and equipment

109

67

966

Purchases of intangible assets

(408)

(502)

(3,620)Purchases of investments in securities

(19)

(16)

(165)

Proceeds from sales of investments in securities

35

12

310

Purchases of investments in subsidiaries

—

(241)

—

Purchases of property, plant and equipment

Other, net
Net Cash Used in Investing Activities

Principal Shareholders (As of March 31, 2016)

Capital Stock

Number of Shareholders:

Bando business partner stakeholders
Sumitomo Mitsui Banking Corporation
Mitsubishi UFJ Trust and Banking
Corporation
Meiji Yasuda Life Insurance Company
Mizuho Bank, Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Japan Trustee Services Bank, Ltd.
(trust account)
Nippon Life Insurance Company
The Master Trust Bank of Japan, Ltd.
(trust account)
Tokio Marine & Nichido Fire InsuranceCo., Ltd.

76

(163)

668

(4,184)(3,931)(37,152)

8,850

Securities Traded: Tokyo Stock Exchange, Inc.
Composition of Shareholders

Cash Flows from Investing Activities:
Increase in time deposits¥93,272 mil. (FYE March 2016)(including 591,031 shares of treasury stock)

Changes in assets and liabilities:

Individuals and others:
29,883,408
31.85%

Financial institutions/
Securities firms:
37,140,279
39.58%

Other corporations:
11,639,329
12.40%

70

Foreign Corporations:
15,173,026
16.17%

Number of shareholders

141

Investment
ratio
(%)

7,299
4,651

7.77
4.95

4,004

4.26

4,000
3,600
3,150

4.26
3.83
3.35

2,997

3.19

2,349

2.50

2,035

2.16

1,839

1.96

Notes: 1. Investment ratios are calculated after deducting treasury stock(591,031 shares).
2. Investment ratios listed above are rounded down to two decimal places.

8,394

244

Number ofshares held
(thousands)

Stock Price and Trading Volume

Cash Flows from Financing Activities:
Decrease in short-term borrowings(1,050)(763)(9,320)

Proceeds from long-term borrowings

1,384

1,500

12,289Payments on long-term borrowings(2,049)(2,232)(18,197)

500

(141)

(12)

(1,254)400

Purchases of treasury stock

(Yen)

600

(1,035)(941)(9,191)

300

Cash dividends paid to non-controlling interests

(106)

(4)

(940)

200

Payments from changes in ownership interests in subsidiaries
that do not result in change in scope of consolidation

(26)

—

(236)

Other, net

(26)

(20)

(229)

Net Cash Used in Financing Activities(3,049)(2,472)(27,078)

10,000Effect of Exchange Rate Changes on Cash and Cash Equivalents(1,066)

1,053(9,467)

8,000

739

2,711

6,556

6,000

15,697

12,981

139,382

4,000

—

5

—

2,000

¥16,436¥15,697$145,9380Cash dividends paid

Net Increase in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Increase in cash and cash equivalents due to change
in fiscal year-end of consolidated subsidiaries
Cash and Cash Equivalents at End of Year

52

Bando Chemical Industries, Ltd.

BANDO CHEMICAL INDUSTRIES, LTD.

100

(Thousand shares)

12,000

0

4

7

2011

10

1

4

7

2012

10

1

4

7

2013

10

1

4

7

2014

10

1

4

7

2015

10

1

2016

Annual Report 201653

www.bando.co.jp

6-6, Minatojima Minamimachi 4-chome, Chuo-ku, Kobe, 650-0047, Japan