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46
MITSUBISHI MOTORS CORPORATION Annual Report 2007
Financial Position
<Assets>
Total assets as of March 31, 2007 were ¥1,778.7 billion, up ¥221.1 billion from the end of fiscal year 2006.
Current assets were ¥1,059.6 billion, up ¥217.3 billion from a year earlier. Inventories rose ¥94.0 billion
to ¥352.0 billion in conjunction with the launch of new models. Furthermore, cash and bank deposits in-
creased ¥99.0 billion to ¥358.1 billion.
Fixed assets increased ¥3.8 billion to ¥719.1 billion.
<Liabilities>
Total liabilities as of March 31, 2007 were ¥1,470.4 billion, an increase of ¥194.1 billion from the end of
fiscal year 2006.
Current liabilities increased ¥243.7 billion to ¥1,110.9 billion. The main contributing factor was an
increase of ¥117.2 billion in trade notes and accounts payable in conjunction with the launch of new models.
Interest-bearing debt increased ¥56.1 billion from the previous year to ¥503.8 billion.
<Equity>
Total net assets increased ¥27.0 billion to ¥308.3 billion. There was a reduction in the accumulated deficit
due to the recording of net income, and foreign currency translation adjustments improved significantly. The
equity ratio was 16.6%, a deterioration of 0.6 of a percentage point from a year earlier.
Cash Flows
Looking at cash flows in fiscal year 2006, net cash provided by operating activities totaled ¥162.3 billion,
¥107.9 billion more than in fiscal year 2005.
Net cash used in investing activities was ¥46.0 billion, ¥38.8 billion less than in the previous fiscal year.
Net cash used in financing activities was ¥11.3 billion, ¥7.7 billion less than in the previous fiscal year.
As a result, the year-end balance of cash and cash equivalents was ¥364.3 billion, an increase of ¥116.2
billion from the beginning of the fiscal year.
Risks related to the company’s operations and financial status are as follows:
Support for Mitsubishi Motors Revitalization Plan from Mitsubishi Group Companies
Mitsubishi Group companies, especially Mitsubishi Heavy Industries, Ltd., Mitsubishi Corporation and Bank
of Tokyo-Mitsubishi UFJ, Ltd., substantially support MMC’s financial status and administrative efforts, as
well as play a critical role in the realization of the Mitsubishi Motors Revitalization Plan. If this support were
to be removed, MMC would find it difficult to achieve the goals of our revitalization plan and restore our
business back to health.
Legal Proceedings for Product Liability and Other Matters
Mitsubishi Motors is involved in the following product liability and other legal proceedings.
MMC is amongst those included in a Tokyo air pollution suit (first–sixth proceedings) that targets the
Japanese National Government, the Tokyo Metropolitan Government, the Metropolitan Expressway Public
Corporation and seven diesel automobile manufacturers. Residents and commuters of the Tokyo City area (23
wards) who are afflicted with respiratory ailments such as bronchial asthma as well as bereaved family mem-
bers (the total number of plaintiffs is more than 500 up through the sixth proceeding) have launched this suit.
On August 8, 2007, a settlement of this suit was reached in the Tokyo District Court and the Tokyo High Court.
Under the settlement, MMC and the other six defendant companies will pay the plaintiffs a settlement fee
and contribute funds to a medical subsidy program to be established by the Tokyo Metropolitan Government.
In January 2002, a front wheel of a truck that was manufactured by MMC’s truck and bus division (now
Mitsubishi Fuso Truck and Bus Corporation) detached while the truck was in motion, resulting in a fatal acci-
dent. One legal proceeding is currently in progress in relation to this accident. The suit was filed in March 2003
by the mother of the deceased. The suit seeks product liability damages amounting to 165.5 million yen
Business-related Risks