Mitsubishi 2007 Annual Report Download - page 58

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MITSUBISHI MOTORS CORPORATION Annual Report 2007
(5) Corporate ideals and direction
Together with the announcement of the new “Mitsubishi Motors Revitalization Plan” in January 2005, the MMC group
formed the new corporate maxim “We are committed to providing the utmost driving pleasure and safety for our valued
customers and our community. On these commitments we will never compromise. This is the Mitsubishi Motors way”.
In addition, from September 2005, the MMC group also adopted a new slogan in Japan that was chosen by staff:
“
Kuruma zukuri no genten e ” (“Pursuing the Origins of Car Engineering”).
(6) Profit and loss targets
By reflecting all the measures described above, the MMC group was able to return to the black at the operating income
level one year ahead of the target originally planned in the “Mitsubishi Motors Revitalization Plan” in FY 2005.
In FY 2006, the MMC group recorded net income of ¥8,745 million ($74,081 thousand) and achieved net profitabil-
ity as targeted in the plan. For FY 2007, the MMC group continues to carry out the measures towards solid profitability.
(7) Support systems: capital and funding reinforcements
(i) Capital reinforcement
With the full support of four Mitsubishi companies, during FY 2004, the MMC group received a capital enhancement
of ¥284.2 billion through the issuance of common and preferred stock. In January 2006, the MMC group issued an
additional ¥30 billion of preferred stock by third party allocation. The combined interests of the MMC group by MHI,
Mitsubishi Corporation, and The Bank of Tokyo-Mitsubishi UFJ, Ltd. were approximately 34% at March 31, 2007.
The MMC group became an equity method affiliate of MHI since the second half of FY 2005.
(ii) Borrowing
In respect of the plan to raise ¥240 billion as part of the “Mitsubishi Motors Revitalization Plan” formed in January
2005, the MMC group raised nearly ¥80 billion in FY 2005, and also raised nearly ¥80 billion by obtaining ¥56 billion
through a medium term syndicate loan in FY 2006. As for FY 2007, the MMC group plans to raise the appropriate
amount of funds by reviewing its financing needs.
(iii) Capital expenditure for revitalization
The funds that were obtained from capital enhancement and funding measures will be utilized in R&D and capital
investment, which will provide the platform vital to the successful achievement of targets and goals that were set out
in the “Mitsubishi Motors Revitalization Plan”.
The MMC group set up a new “Business Revitalization Monitoring Committee”, an external body that monitors the
progress made in the implementation of the “Mitsubishi Motors Revitalization Plan” in April 2005. The members of
the committee are made up of specialists and leaders in their fields from outside the MMC group as well as represen-
tatives from key stockholders of Mitsubishi companies, and they have been overseeing the progress of the “Mitsubishi
Motors Revitalization Plan” and have given valuable advice and guidance.
For this fiscal year, the MMC group has restored profitability at all levels (operating, ordinary and net income).
The MMC group, in order to restore operations as well as financial health across the board, is devoting itself to
materializing the new “Mitsubishi Motors Revitalization Plan” that was announced in January 2005 with full support
of three Mitsubishi companies (MHI, Mitsubishi Corporation and The Bank of Tokyo-Mitsubishi UFJ, Ltd.).
Accordingly, these financial statements have been prepared on the basis of going concern and the effect of any
significant doubt as to going concern is not reflected.