Mitsubishi 2013 Annual Report Download - page 48

MITSUBISHI MOTORS CORPORATION
Annual Report 2013
46
The net amount of cash and cash equivalents received on the
share transfer less the cash and cash equivalents included in the
above current assets, which were deconsolidated on the sale of the
subsidiary, ¥21,587 million ($229,535 thousand) is presented as
“Net decrease in cash on the sale of subsidiaries resulting in change
in scope of consolidation”.
14. Leases
As lessee
(a) Finance lease transactions that do not involve transfer of
ownership to the lessee
(1) Description of the leased assets:
Property, plant and equipment
Leased assets principally include, but are not limited to,
production facilities for the automobile business (“Machinery
and equipment (net)” and “Tool, furniture and fixtures
(net)”).
(2) Depreciation method of leased assets
Leased assets under finance leases that do not involve trans-
fer of ownership to the lessee, are depreciated using the
straight line method based on the contract term of the lease
agreement. If the guaranteed residual value is determined
in the lease agreement, the said guaranteed residual value
is deemed as the residual value of such leased assets. If the
residual value is not determined, it is deemed to be zero.
(b) Operating lease transactions
Future minimum lease payments required under non-cancellable
operating lease transactions entered into by MMC and its
consolidated subsidiaries at March 31, 2013 and 2012 were as
follows:
(In millions of yen)
(In thousands
of U.S. dollars)
March 31,
2013 2012 2013
Due within 1 year ¥1,357 ¥1,231 $ 14,433
Due after 1 year 8,201 7,427 87,207
Total ¥9,559 ¥8,659 $101,641
As lessor
Future minimum lease revenues from non-cancellable operating
lease transactions entered into by MMC and its consolidated sub-
sidiaries as lessor at March 31, 2013 and 2012 were as follows:
(In millions of yen)
(In thousands
of U.S. dollars)
March 31,
2013 2012 2013
Due within 1 year ¥ 5,429 ¥4,210 $ 57,730
Due after 1 year 8,845 5,668 94,046
Total ¥14,274 ¥9,878 $151,776
15. Financial Instruments
For the years ended March 31, 2013 and 2012
Overview of financial instruments
(a) Our policy to manage financial instruments
The Group’s capital management policy is to limit its investments to
low-risk financial products and to obtain its required funds mainly
through bank borrowings. We use derivative instruments to hedge
interest rate, foreign currency and similar risks, and we do not enter
into any speculative transactions.
(b) Nature and risks of financial instruments and our risk
management structure
Trade receivables, which include notes receivable and accounts
receivable, are exposed to the credit risk of our customers. To man-
age this risk, in accordance with the Group’s credit control rules,
each group company monitors the financial condition of its major
customers, as well as managing the maturity profiles and outstand-
ing balances of the receivables on a customer by customer basis.
Trade receivables denominated in foreign currency are exposed
to foreign currency risk. In principle, forward foreign exchange
contracts are used to hedge the net position after offsetting foreign
currency denominated payables.
Some investment securities are exposed to the risk of market
price fluctuation. However, such securities are composed of mainly
the stocks of companies with which the Group has business
relationships.
Trade payables, which include notes payable and accounts pay-
able, are mostly expected to be settled within one year. While trade
payables include certain payables denominated in foreign curren-
cies, in principle these are managed by netting against foreign
currency denominated receivables.