Financial Overview

(in millions of JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	Rate of Change (%)	Factors
Overall
Sales	54,581	50,928	7.2	-
Operating income	5,647	4,871	15.9	-
Ordinary income	5,608	4,345	29.1	-
Net income	3,283	3,363	(2.4)	-
Domestic Belt Division
Sales	26,474	25,417	4.2	-In Japan, sales slightly increased year-on-year, thanks to a recovery in auto production during the second half of the year. During the first half, sales were significantly lower compared to those during the same period the year earlier, being affected by the reduction in production volume by OEMs because of the Great East Japan Earthquake.
Operating income	6,618	5,651	17.1	-
Overseas Belt Division
Sales	19,085	17,244	10.7	-Outside Japan, sales grew year-on-year, especially in the U.S.A., as a result of the Company’s efforts to increase sales of after-service conveyor belts, since the market for new belts used on new-vehicle production lines were depressed because of lower unit production by Japanese OEMs that had been affected by the Great East Japan Earthquake and the flooding in Thailand.
Operating income	1,184	1,275	(7.1)	-

Recent Development Outside Japan

-The Company announced on January 11 that it will inaugurate its new plant in India on March 17, half a year ahead of the original schedule, to establish a local structure assuring stable supply of automotive belts. Mitsuboshi Belting-India is building a new plant at a site of 3,000 square meters in the industrial park in Maharashtra State for production of belts for vehicles and motorcycles. Mitsuboshi aims to generate 500 million-1 billion yen in sales in five years. (From an article in the Nikkan Jidosha Shimbun on January 13, 2012)

-The Company has launched reorganization of its overseas sales structure to increase profit margin. With the aim of securing profitability in the midst of the business environment plagued by the super strong yen, the Company, which is a major supplier of belting products, is intent on increasing efficiency in sales operations, as well as overhauling the sales network. It also will devote its efforts to increasing sales of factory-installed automobile belts by expanding the network of overseas sales agencies. Its percentage of overseas sales, which currently stands at 37.6 percent, has been increasing for the past few years at 1-2 percent per year. If this pace continues, the overseas share in total sales will exceed 40 percent by 2013.　(From an article in the Nikkan Jidosha Shimbun on December 19, 2011)

R&D Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	FY ended Mar. 31, 2010
Overall	2,092	2,070	2,029
Domestic Belt Business	1,253	1,215	1,388
Overseas Belt Business

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 activities for both the domestic and overseas belt businesses are being conducted mainly at the Company itself and at Mitsuboshi Belting Giken Co., Ltd.

R&D Acitivities

Belt Business
-The Company's R&D activities are focused on the following areas:

• Energy-saving V belts
• Auto-tensioners
• Low-friction ribbed belts
• Timing belts for ultra high-loads

Product Development

Low friction loss belt
-The low friction loss belt is designed to mitigate friction loss caused by the bending and deformation of the belt when the vehicle is in motion. The Company developed this new technology by modifying the belt rib design and replacing the material used on the backside with rubber. Improved belt flexibility leads to higher transmission efficiency, while reducing energy loss and burden on the engine to upgrade fuel economy.

Star Fit
-The Star Fit uses low-elasticity rib in the ancillary drive belt, which eliminates the tension pulley and the bracket that are normally added to ensure the belt tension. In addition to saving space around the engine, elimination of the pulley and the bracket, which weigh about 1.5 kilograms per a mini vehicle, also helps automakers cut down on cost and enhance fuel economy.

Grinding-less belt
-The grinding-less belt uses a new production method to improve forming performance of the belt rib. Unlike the conventional technique to form the rib by grinding the vulcanized sleeve base, the new technology uses heat and pressure to form the rib by pressing its base into a mold.

Capital Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	FY ended Mar. 31, 2010
Overall	1,654	1,591	3,073
Domestic Belt Business	625	935	2,961
Overseas Belt Business	894	473

Belt business in Japan
-Invested 49 million yen in facilities and equipment manufacturing belts at its Shikoku Plant.
-Invested 75 million yen in facilities and equipment for testing and R&D at its Ayabe operations.

Belt business outside Japan
-The majority of the capital investments that the Company made was done outside Japan in equipment and facilities producing belts.

Planned Capital Investments (related to belts)

(As of Mar. 31, 2012)

Company/ Facility (Location)	Business Segment	Objective or equipment to be installed	Planned amount of investment (in million JPY)	Start	Planned completion
Shikoku Plant (Kagawa Pref., Japan)	Domestic Belts	Upgrading belt production equipment	84	Mar. 2012	Nov. 2013
Ayabe Plant (Kyoto, Japan)	Domestic Belts	Upgrading testing equipment	63	Mar. 2012	Dec. 2012
Mitsuboshi Overseas Headquarters Private Limited (Singapore)	Overseas Belt	Upgrading belt production equipment	170	Jun. 2012	Mar. 2013
P.T. Mitsuboshi Belting Indonesia (Tangerang, Indonesia)	Overseas Belt	Upgrading belt production equipment	419	Dec. 2011	Aug. 2012
		Upgrading belt production equipment	59	Feb. 2012	Oct. 2012

*No significant increase is expected in terms of production capacity.