Financial Overview

(in millions of JPY)

	FY2008	FY2007	Rate of Change (%)	Factors
Overall
Sales	53,867	58,221	(7.5)	-Sales and income decreased as a result of a dramatic drop in demand starting from last autumn, soaring materials prices experienced through the third quarter, and negative foreign currency translation due to the sharp appreciation of the yen.
Operating income	2,480	3,891	(36.3)
Ordinary income	2,132	3,192	(33.2)
Net income	182	1,412	(87.1)	-
Belt Division
Sales	45,664	49,824	(8.3)	-Sales of automotive belts were strong until the third quarter as a result of the Company expanding its production capacity at  its plant outside Japan. Though total sales increased on a local currency basis compared to what they were the last fiscal year, they decreased on a yen basis because of negative foreign currency translation due to the strong yen.
Operating income	4,271	6,345	(32.7)	-Operating income decreased due to soaring materials prices that continued until the third quarter.

R&D Expenditure

(in millions of JPY)

	FY2008	FY2007	FY2006
Overall	2,189	2,211	2,731
Belt Business	1,411	1,465	1,572

R&D Structure
-R&D is conducted through cooperation among the R&D Department, engineering departments of other divisions, as well as development departments in subsidiaries.    

-R&D is conducted also through closely cooperating with universities and research institutes and through jointly developing products with other companies, especially on advanced technologies.


R&D Acitivities
Belt Business
-Auto pretensioners developed by the Company are used in a growing number of car models.

-Ribbed belts designed to reduce noise were developed based on sophisticated materials and enhanced structural designing.

-High rigidity timing belt series corresponding to high load and accuracy in determining position.

-Rubber back ribbed belts that create more freedom of design in the engine.

-Environmentally friendly timing belts which contain the least amount possible of environmentally controlled substances.

-Environmentally friendly flat belts.

Capital Investment

(in millions of JPY)

	FY2008	FY2007	FY2006
Overall	4,507	2,996	5,524
Belt Business	4,241	2,671	4,738

Belt business
-The Company invested 515 million yen in a plant building and belt production facilities at its Shikoku Plant.

-The Company invested 102 million yen in belt production facilities at its Nagoya Plant.

-The Company invested 145 million yen in facilities used to conduct experiments and research at its Ayabe Plant.

-The Company invested 507 million yen to enhance belt production facilities at plants outside Japan.


Investments in Japan
-The Company announced that it will hold a ceremony to celebrate the completion of an additional production facility at its Shikoku Plant in Sanuki City, Kagawa Prefecture. As part of its initiatives to boost production and retool equipment, the Company launched a renewal project at the Shikoku Plant in March 2008. This project involved constructing three additional facilities including the new production building. The new factory houses cutting-edge equipment, which was developed at Mitsuboshi Belting Giken Co., Ltd. in Ayabe City, Kyoto. Mitsuboshi Belting plans to invest around 5 billion yen in total to finish two other facilities. Construction of the third facility is scheduled to be completed by the end of December 2010. (From an article in the Nikkan Jidosha Shimbun on Oct. 11, 2008)


New Facilities (excerpt) (As of Mar. 2009)

Company/ Facility (Location)	Business Segment	Objective or equipment to be installed	Planned amount of investment (in million JPY)	Start	Planned completion
Shikoku Plant (Kagawa, Japan)	Belts	Upgrading equipment to manufacture belts	390	Jun. 2008	Jun. 2009
	Belts	Upgrading plant environment	165	Jun. 2008	Jun. 2009
	Belts	Upgrading plant environment	860	Dec. 2008	Aug. 2010
Ayabe Plant (Kyoto, Japan)	Belts	Developing production systems to produce driving belts	650	July 2009	Mar. 2010
	Belts	Upgrading plant environment	145	Jun. 2009	Jan. 2010
	Belts	Upgrading testing equipment	52	Jun. 2009	Jan. 2010
Mitsuboshi Overseas Headquarters Private Limited Head Office Plant (Singapore)	Belts	Upgrading equipment to manufacture belts	111	July 2008	Jun. 2009
P.T. Mitsuboshi Belting Indonesia Head Office Plant (Indonesia)	Belts	Upgrading and revamping refining equipment	53	May 2008	Nov. 2009

Note: No significant increase is expected in terms of production capacity.