REG - Mitsubishi Corp. - Half-year Report
FINANCIAL RESULTS FOR
THE SIX MONTHS ENDED SEPTEMBER 2018
Mitsubishi Corporation
2-3-1 Marunouchi, Chiyoda-ku, Tokyo, JAPAN 100-8086
https://www.mitsubishicorp.com/
November 2, 2018
Mitsubishi Corporation
FINANCIAL HIGHLIGHTS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2018
(Based on IFRS) (Consolidated)
1. Consolidated operating results for the six months ended September 30, 2018
(1) Revenues and income
Note:
Figures less than one million yen are rounded.
%: change from the same period of the previous year
Revenues
Profit before tax
Profit for the period
Profit for the period
attributable to
owners of the Parent
Comprehensive income
For the six months ended
Millions of Yen
%
Millions of Yen
%
Millions of Yen
%
Millions of Yen
%
Millions of Yen
%
September 30, 2018
7,943,248
117.2
450,554
20.1
339,075
19.8
309,309
21.8
489,412
13.5
September 30, 2017
3,657,086
24.7
375,011
46.2
282,937
40.0
253,998
41.2
431,250
－
Profit for the period
attributable to
owners of the Parent
per share (basic)
Profit for the period
attributable to
owners of the Parent
per share (diluted)
For the six months ended
Yen
Yen
September 30, 2018
195.01
194.55
September 30, 2017
160.19
159.82
Note:
Profit for the period attributable to owners of the Parent per share (basic) and Profit for the period attributable to owners of the Parent per share (diluted) are calculated based on Profit for the period attributable to owners of the Parent.
(2) Financial position
Total assets
Total equity
Equity attributable to
owners of the Parent
Ratio of equity attributable to
owners of the Parent to total
assets
As of
Millions of Yen
Millions of Yen
Millions of Yen
%
September 30, 2018
16,613,704
6,608,727
5,678,810
34.2
March 31, 2018
16,036,989
6,265,211
5,332,427
33.3
2. Dividends
Cash dividend per share (Yen)
(Record date)
1Q end
2Q end
3Q end
4Q end
Annual
Fiscal Year
ended March 31, 2018
－
47.00
－
63.00
110.00
Fiscal Year
ending March 31, 2019
－
62.00
Fiscal Year
ending March 31, 2019 (Forecast)
－
63.00
125.00
Note:
Change from the latest released dividend forecasts: Yes
3. Consolidated forecasts for the fiscal year ending March 31, 2019 (April 1, 2018 to March 31, 2019)
Note:
%: change from the previous year.
Profit attributable to
owners of the Parent
Profit attributable to owners of
the Parent per share
For the year ending
Millions of Yen
%
Yen
March 31, 2019
640,000
14.3
403.46
Note:
Change from the latest released earnings forecasts: Yes
4. Notes
(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries causing changes in scope of consolidation): None
New companies: －
Excluded companies: －
(2) Changes in accounting policies and accounting estimates
-1- Changes in accounting policies required by IFRS : Yes
-2- Changes in accounting policies other than -1- : None
-3- Changes in accounting estimates : None
(3) Number of shares issued (Common stock)
-1- Number of shares issued at quarterly-end (including treasury stock)
(September 30, 2018)
1,590,076,851
(March 31, 2018)
1,590,076,851
-2- Number of treasury stock at quarterly-end
(September 30, 2018)
3,664,849
(March 31, 2018)
4,147,602
-3- Average number of shares during each of the six months ended September 30, 2018
(September 30, 2018)
1,586,143,959
(September 30, 2017)
1,585,565,877
Disclosure Regarding Quarterly Review Procedures
This earnings release is not subject to independent Auditor's review procedures.
Forward-looking Statements
Earnings forecasts and other forward-looking statements in this release are based on data currently available to management and certain assumptions that management believes are reasonable. The achievement of said forecasts cannot be promised. Actual results may therefore differ materially from these statements for various reasons. For cautionary notes concerning assumptions for earnings forecasts and use of earnings forecasts, please refer to "1. (4) Forecasts for the Year Ending March 2019" on page 4
Contents
1. Qualitative Information …………………………………………………………………………2
(1) Results of Operations …………………………………………………………………………… 2
(2) Financial Position ……………………………………………………………………………… 3
(3) Cash Flows ……………………………………………………………………………………… 3
(4) Forecasts for the Year Ending March 2019 …………………………………………………… 4
2. Condensed Consolidated Financial Statements …………………………………………………5
(1) Condensed Consolidated Statement of Financial Position ……………………………………… 5
(2) Condensed Consolidated Statement of Income …………………………………………………7
(3) Condensed Consolidated Statement of Comprehensive Income ………………………………8
(4) Condensed Consolidated Statement of Changes in Equity ……………………………………9
(5) Condensed Consolidated Statement of Cash Flows ……………………………………………10
3. Changes in Accounting Policies and Accounting Estimates …………………………………11
4. Notes Concerning Going Concern Assumption ………………………………………………13
* Mitsubishi Corporation will hold an earnings conference in Tokyo for the six months ended September 2018 on November 6, 2018 (Tuesday) from 15:30 to 17:00 (Japan Time), inviting institutional investors to join. The conference material can be accessed live in Japanese from the following URL:
https://www.mitsubishicorp.com/jp/ja/ir/index.html
(English interpretation of the conference call will be posted in the Investor Relations section of our web site as soon as it becomes available.)
1. Qualitative Information
(Profit for the period, as used hereinafter, refers to profit for the period attributable to owners of the Parent.)
(1) Results of Operations
Revenues were ¥7,943.2 billion, an increase of ¥4,286.1 billion, or 117% year over year. This is mainly due to an increase of transactions in which identified performance obligations of the Company are transfer of goods as principal and therefore revenue is recognized in the gross amount of consideration with the application of IFRS 15.
Gross profit was ¥994.5 billion, an increase of ¥88.6 billion, or 10% year over year, mainly due to higher trading volume in the Australian coal business.
Selling, general and administrative expenses remained nearly flat to ¥691.8 billion.
Gains on investments decreased ¥6.0 billion year over year, to ¥8.7 billion, mainly due to impairment of investment in Chiyoda Corporation that offset valuation gains stemming from the Overseas power generation business.
Impairment losses on property, plant and equipment and others amounted to ¥8.6 billion, an improvement of ¥31.3 billion, mainly due to the rebound of impairments of resource-related assets recorded in the previous year.
Other income (expense)-net decreased ¥22.2 billion year over year, to an expense amount of ¥15.9 billion, mainly due to the rebound of one-off gains recorded in the previous year.
Finance income increased ¥20.9 billion, or 26% year over year, to ¥100.9 billion, mainly due to increased dividend income from resource-related investments.
Share of profit of investments accounted for using the equity method decreased ¥8.9 billion, or 9% year over year, to ¥93.0 billion, mainly due to one-off losses from worsening construction-related losses in Chiyoda Corporation.
As a result, profit before tax increased ¥75.6 billion, or 20% year over year, to ¥450.6 billion.
Accordingly, profit for the period grew ¥55.3 billion, or 22% year over year, to ¥309.3 billion.
(2) Financial Position
Total assets at September 30, 2018 was ¥16,613.7 billion, an increase of ¥576.7 billion from March 31, 2018. The increase was mainly due to higher trade and other receivables stemming from increased transaction volumes and transaction prices.
Total liabilities was ¥10,005.0 billion, an increase of ¥233.2 billion from March 31, 2018. This increase was mainly attributable to higher trade and other payables, in line with an increase in transaction volumes and transaction prices.
Net interest-bearing liabilities, which is gross interest-bearing liabilities minus cash, cash equivalents and time deposits, increased ¥60.5 billion from March 31, 2018, to ¥3,774.7 billion.
Equity attributable to owners of the Parent was ¥5,678.8 billion, an increase of ¥346.4 billion from March 31, 2018. This increase was mainly due to the accumulation of profit for the period.
(3) Cash Flows
Cash and cash equivalents at September 30, 2018 was ¥1,063.6 billion, an increase of ¥58.1 billion from March 31, 2018.
(Operating activities)
Net cash provided by operating activities was ¥286.5 billion, mainly due to cash flows from operating transactions and dividend income, despite an increase in working capital requirements and the payment of income taxes.
(Investing activities)
Net cash used by investing activities was ¥155.0 billion. The main uses of cash were additional acquisition of copper assets in Peru and payments for the purchase of property, plant and equipment, despite cash provided by the sale of business in the Australian coal business.
As a result, free cash flows, the sum of operating and investing cash flows, was positive ¥131.5 billion.
(Financing activities)
Net cash used in financing activities was ¥85.5 billion, mainly due to the payment of dividends.
(4) Forecasts for the Year Ending March 2019
Due to factors such as the progress to date against the initial forecast (announced on May 8, 2018), forecast for the year ending March 2019 has been revised as follows.
Consolidated Forecast for the Year Ending March 2019 (April 1, 2018 to March 31, 2019)
(Billions of Yen)
Previous full-year forecast
(May 8, 2018) (A)Revised full-year forecast
(B)Change
(B-A)Change
(%)Profit attributable to
owners of the Parent600.0
640.0
40.0
7%
Note:
Earnings forecast and other forward-looking statements in this release are based on data currently available to management and certain assumptions that management believes are reasonable. Therefore, they do not constitute a guarantee that they will be achieved. Actual results may differ materially from these statements for various reasons.
2. Condensed Consolidated Financial Statements
(1) Condensed Consolidated Statement of Financial Position
March 31, 2018 and September 30, 2018
ASSETS
Millions of Yen
March 31,
2018
September 30,
2018
Current assets
Cash and cash equivalents
1,005,461
1,063,622
Time deposits
234,758
246,687
Short-term investments
9,319
11,846
Trade and other receivables
3,523,341
3,704,360
Other financial assets
99,804
124,058
Inventories
1,204,402
1,212,837
Biological assets
68,431
79,405
Advance payments to suppliers
164,909
60,432
Assets classified as held for sale
91,431
74,610
Other current assets
376,905
350,872
Total current assets
6,778,761
6,928,729
Non-current assets
Investments accounted for using the equity method
3,050,371
3,179,118
Other investments
2,203,242
2,319,087
Trade and other receivables
526,986
585,275
Other financial assets
93,849
100,816
Property, plant and equipment
2,106,195
2,186,543
Investment property
72,192
72,842
Intangible assets and goodwill
1,003,335
1,038,809
Deferred tax assets
35,847
31,233
Other non-current assets
166,211
171,252
Total non-current assets
9,258,228
9,684,975
Total
16,036,989
16,613,704
LIABILITIES AND EQUITY
Millions of Yen
March 31,
2018
September 30,
2018
Current liabilities
Bonds and borrowings
1,269,535
1,363,912
Trade and other payables
2,765,215
2,947,348
Other financial liabilities
81,574
139,628
Advances from customers
167,143
64,730
Income tax payables
101,671
42,951
Provisions
48,631
42,897
Liabilities directly associated with assets classified as held for sale
22,958
31,580
Other current liabilities
460,211
401,523
Total current liabilities
4,916,938
5,034,569
Non-current liabilities
Bonds and borrowings
3,684,860
3,721,111
Trade and other payables
222,474
283,399
Other financial liabilities
23,349
25,523
Retirement benefit obligation
80,532
80,196
Provisions
228,483
213,159
Deferred tax liabilities
598,244
630,867
Other non-current liabilities
16,898
16,153
Total non-current liabilities
4,854,840
4,970,408
Total liabilities
9,771,778
10,004,977
Equity
Common stock
204,447
204,447
Additional paid-in capital
229,423
229,070
Treasury stock
(10,970)
(9,688)
Other components of equity
Other investments designated as FVTOCI
509,887
669,860
Cash flow hedges
(10,920)
(8,538)
Exchange differences on translating foreign operations
426,644
471,924
Total other components of equity
925,611
1,133,246
Retained earnings
3,983,916
4,121,735
Equity attributable to owners of the Parent
5,332,427
5,678,810
Non-controlling interests
932,784
929,917
Total equity
6,265,211
6,608,727
Total
16,036,989
16,613,704
(2) Condensed Consolidated Statement of Income
for the six months ended September 30, 2017 and 2018
Millions of Yen
Six months
ended
September 30, 2017
Six months
ended
September 30, 2018
Revenues
3,657,086
7,943,248
Cost of revenues
(2,751,190)
(6,948,702)
Gross profit
905,896
994,546
Selling, general and administrative expenses
(676,312)
(691,815)
Gains on investments
14,684
8,726
Gains on disposal and sale of property, plant and equipment and others
7,701
2,161
Impairment losses on property, plant and equipment and others
(39,910)
(8,577)
Other income (expense)-net
6,296
(15,851)
Finance income
79,993
100,880
Finance costs
(25,193)
(32,515)
Share of profit of investments accounted for using the equity method
101,856
92,999
Profit before tax
375,011
450,554
Income taxes
(92,074)
(111,479)
Profit for the period
282,937
339,075
Profit for the period attributable to:
Owners of the Parent
253,998
309,309
Non-controlling interests
28,939
29,766
282,937
339,075
(3) Condensed Consolidated Statement of Comprehensive Income
for the six months ended September 30, 2017 and 2018
Millions of Yen
Six months
endedSeptember 30,2017
Six months
endedSeptember 30 ,2018
Profit for the period
282,937
339,075
Other comprehensive income (loss), net of tax
Items that will not be reclassified to profit or loss for the period:
Gains on other investments designated as FVTOCI
84,511
98,723
Remeasurement of defined benefit pension plans
(96)
(120)
Share of other comprehensive income (loss) of investments accounted for using
the equity method4,158
2,386
Total
88,573
100,989
Items that may be reclassified to profit or loss for the period:
Cash flow hedges
1,230
(2,761)
Exchange differences on translating foreign operations
66,876
68,637
Share of other comprehensive income (loss) of investments accounted for using
the equity method(8,366)
(16,528)
Total
59,740
49,348
Total other comprehensive income (loss)
148,313
150,337
Total comprehensive income
431,250
489,412
Comprehensive income attributable to:
Owners of the Parent
396,379
449,494
Non-controlling interests
34,871
39,918
431,250
489,412
(4) Condensed Consolidated Statement of Changes in Equity
for the six months ended September 30, 2017 and 2018
Millions of Yen
Six months
endedSeptember 30, 2017
Six months
endedSeptember 30, 2018
Common stock:
Balance at the beginning of the period
204,447
204,447
Balance at the end of the period
204,447
204,447
Additional paid-in capital:
Balance at the beginning of the period
220,761
229,423
Compensation costs related to stock options
893
768
Sales of treasury stock upon exercise of stock options
(350)
(787)
Equity transactions with non-controlling interests and others
6,453
(334)
Balance at the end of the period
227,757
229,070
Treasury stock:
Balance at the beginning of the period
(12,154)
(10,970)
Sales of treasury stock upon exercise of stock options
615
1,288
Purchases and sales-net
(7)
(6)
Balance at the end of the period
(11,546)
(9,688)
Other components of equity:
Balance at the beginning of the period
878,949
925,611
Cumulative effects of change in accounting policy
－
53
Adjusted balance at the beginning of the period
878,949
925,664
Other comprehensive income attributable to owners of the Parent
142,381
140,185
Transfer to retained earnings
(3,989)
67,397
Balance at the end of the period
1,017,341
1,133,246
Retained earnings:
Balance at the beginning of the period
3,625,244
3,983,916
Cumulative effects of change in accounting policy
－
(3,677)
Adjusted balance at the beginning of the period
3,625,244
3,980,239
Profit for the period attributable to owners of the Parent
253,998
309,309
Cash dividends paid to owners of the Parent
(79,276)
(99,916)
Sales of treasury stock upon exercise of stock options
(265)
(500)
Transfer from other components of equity
3,989
(67,397)
Balance at the end of the period
3,803,690
4,121,735
Equity attributable to owners of the Parent
5,241,689
5,678,810
Non-controlling interests:
Balance at the beginning of the period
871,764
932,784
Cumulative effects of change in accounting policy
－
(521)
Adjusted balance at the beginning of the period
871,764
932,263
Cash dividends paid to non-controlling interests
(26,781)
(38,853)
Equity transactions with non-controlling interests and others
47,705
(3,411)
Profit for the period attributable to non-controlling interests
28,939
29,766
Other comprehensive income attributable to non-controlling interests
5,932
10,152
Balance at the end of the period
927,559
929,917
Total equity
6,169,248
6,608,727
(5) Condensed Consolidated Statement of Cash Flows
for the six months ended September 30, 2017 and 2018
Millions of Yen
Six months ended
September 30, 2017
Six months ended
September 30, 2018
Operating activities:
Profit for the period
282,937
339,075
Adjustments to reconcile profit for the period to net cash provided by (used in) operating activities:
Depreciation and amortization
126,491
122,664
(Gains) on investments
(14,684)
(8,726)
Losses on property, plant and equipment and others
32,209
6,416
Finance (income) -net of finance costs
(54,800)
(68,365)
Share of (profit) of investments accounted for using the equity method
(101,856)
(92,999)
Income taxes
92,074
111,479
Changes in trade receivables
(170,639)
(247,928)
Changes in inventories
(22,757)
(3,731)
Changes in trade payables
188,667
130,904
Other-net
(36,971)
(76,313)
Dividends received
177,345
207,152
Interest received
42,996
56,625
Interest paid
(31,067)
(39,843)
Income taxes paid
(104,927)
(149,928)
Net cash provided by (used in) operating activities
405,018
286,482
Investing activities:
Payments for property, plant and equipment and others
(141,569)
(137,862)
Proceeds from disposal of property, plant and equipment and others
57,930
65,393
Purchases of investments accounted for using the equity method
(106,168)
(219,968)
Proceeds from disposal of investments accounted for using the equity method
31,211
70,123
Acquisitions of businesses-net of cash acquired
(6,258)
(18,431)
Proceeds from disposal of businesses-net of cash divested
－
86,141
Purchases of other investments
(22,648)
(39,813)
Proceeds from disposal of other investments
72,465
44,539
Increase in loans receivable
(25,031)
(28,986)
Collection of loans receivable
25,433
22,354
Net (increase) decrease in time deposits
3,293
1,535
Net cash provided by (used in) investing activities
(111,342)
(154,975)
Financing activities:
Net increase (decrease) in short-term debts
(110,091)
108,708
Proceeds from long-term debts-net of issuance costs
154,704
331,532
Repayments of long-term debts
(421,953)
(390,015)
Dividends paid to owners of the Parent
(79,276)
(99,916)
Dividends paid to non-controlling interests
(26,781)
(38,853)
Payments for acquisition of subsidiary's interests from the non-controlling interests
(8,869)
(3,746)
Proceeds from disposal of subsidiary's interests to the non-controlling interests
58,703
6,813
Net (increase) decrease in treasury stock
(7)
(6)
Net cash provided by (used in) financing activities
(433,570)
(85,483)
Effect of exchange rate changes on cash and cash equivalents
17,959
12,137
Net increase (decrease) in cash and cash equivalents
(121,935)
58,161
Cash and cash equivalents at the beginning of the period
1,145,514
1,005,461
Cash and cash equivalents at the end of the period
1,023,579
1,063,622
3. Changes in Accounting Policies and Accounting Estimates
The important accounting policies applied to the condensed consolidated financial statements for the six months ended September 2018 are identical to those for the previous fiscal year, except for the following:
New standards and interpretations applied
Standard and interpretations
Outline
IFRS 15 Revenue from Contracts with Customers
Changes in accounting and disclosure requirements for revenue recognition
IFRS 9 Financial Instruments (Amended July 2014)
Partial changes in classification and measurement of financial instruments, and implementation of expected credit loss model for impairment losses
IFRS 15 Revenue from Contracts with Customers
The Parent, together with its consolidated domestic and foreign subsidiaries (collectively, the "Company") has applied IFRS 15 from the first three months of the fiscal year ending in March 2019. Of the accepted transitional provisions, the Company has adopted the method of recognizing the cumulative effect of initially applying this standard as an adjustment to the opening balance of retained earnings, etc. of the year ending March 2019. However, the amount of impact is immaterial.
1) Revenue recognition criteria (five-step approach)
In line with the application of IFRS 15, the Company recognizes revenue based on the five-step approach outlined below.
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation
The Company identifies distinct goods or services included in contracts with customers and identifies performance obligations by such transaction units.
In identifying performance obligations, the Company performs principal versus agent considerations. If the nature of the promise is a performance obligation to provide the specified goods or services itself, the Company is a principal and the total amount of consideration is presented as revenue in its consolidated statement of income. If its nature is a performance obligation to arrange for those goods or services to be provided by other parties, the Company is an agent and the commission or fee amount or the net amount of consideration is presented as revenue in its consolidated statement of income.
The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to customers. If the amount of consideration is undetermined at the point of revenue recognition, the consideration is estimated by a reliable manner based on formulas provided in the contract. If uncertainty is high or the transaction price cannot be reliably estimated, the consideration is not included in the transaction price. The transaction price is revised once the uncertainty is decreased and a reliable estimation becomes possible.
2) Revenue recognition in major streams
(Sale of products and commodities)
The Company trades a wide variety of products and commodities, including metals, machinery, chemicals, and consumer goods. In the sale of products and commodities, the Company recognizes revenue when the terms of delivery have been satisfied, as it is considered that the customer has obtained control of the products or commodities and therefore the identified performance obligations have been satisfied at the point.
(Rendering of services and other services)
The Company also performs service-related and other activities. In service-related activities, the Company provides a variety of services including the services based on franchise contracts, logistics, telecommunications, technical support, and other services. Revenue for service-related activities is recognized when the performance obligations for services identified in contracts are satisfied. For transactions where performance obligations are satisfied over time, revenue is recognized by measuring progress towards complete satisfaction of the performance obligations.
3) Comparison with the previous standards
With the application of IFRS 15, both amounts of "Revenues" and "Cost of revenues" of the condensed consolidated statement of income for the six months ended September 30, 2018 increased by approximately ¥4,000 billion respectively as compared to those under previous standards due to increase of transactions in which identified performance obligations of the Company are transfer of goods or services as principal and therefore revenue is recognized in the gross amount of consideration. There was no significant impact on other items of the condensed consolidated financial statements including "Profit for the period."
IFRS 9 Financial Instruments (Amended July 2014)
The Company has applied IFRS 9 Financial Instruments (Amended July 2014) from the first three months of the fiscal year ending in March 2019. Of the accepted transitional provisions under this standard, the Company has adopted the method of recognizing the cumulative amount of impact from this application as an adjustment in retained earnings at the beginning of the fiscal year ending in March 2019. However, the amount of impact is immaterial.
1) Classification and measurement of financial assets
The amendments to IFRS 9 include the addition of a fair value through other comprehensive income (FVTOCI) measurement category for certain debt instruments. The Company has evaluated business models containing such financial instruments and the contract conditions of financial instruments as of the beginning of the fiscal year ending March 2019 and measured such instruments at FVTOCI if the following conditions are met:
・The financial asset is held within a business model whose objective is achieved by both collecting
contractual cash flows and selling financial assets.
・The contractual terms of the financial asset give rise on specified dates to cash flows that are solelypayments of principal and interest on the principal amount outstanding.
As a result, the classification of certain debt instruments in the amount of ¥35,853 million that were measured at fair value through profit or loss prior to this application has been changed to be measured at FVTOCI. In cases where debt instruments measured at FVTOCI are derecognized, the difference between the carrying amount and the consideration received or receivable, and cumulative gain or loss previously recognized through OCI is recognized in profit or loss.
2) Impairment of financial assets
The Company estimates expected credit losses on financial assets measured at amortized cost and debt instruments measured at FVTOCI, and recognizes and measures loss allowances.
As of the reporting date, if credit risks on certain financial instruments have not increased significantly since initial recognition, the loss allowance on such financial instruments is measured at an amount equal to expected credit losses that result from default events that are possible within 12 months after the reporting date.
Meanwhile, if, as of the reporting date, credit risks on certain financial instruments have increased significantly since initial recognition, the loss allowance on such financial instruments is measured at an amount equal to expected credit losses that result from all possible default events over the expected lifetime of the financial instruments (expected lifetime credit losses).
Significant increase in credit risk is determined considering information such as changes in external and internal credit ratings and past due information, and expected credit losses are measured by reflecting factors such as time value of money, history of default events, and reasonable and supportable information about forecast of future economic conditions.
Evidence of credit impairment is determined considering information such as significant financial difficulty of the issuer or the borrower, and a breach of contract, including past due events.
Furthermore, for financial assets showing evidence of credit impairment as of the reporting date, the Company estimates expected credit losses individually after taking into overall consideration such factors as investment rating, the details of investment contracts, the state of collateral, cash flow rights and priorities, and the status of the issuer.
However, for trade receivables that do not contain a significant financing component, the loss allowance is always recognized at an amount equal to expected lifetime credit losses, regardless of whether a significant increase in credit risk has occurred since initial recognition.
Except standards and interpretations outlined above, the adoption of new standards and interpretations had no significant impact on the condensed consolidated financial statements for the six months ended September 2018.
4. Notes Concerning Going Concern Assumption
None
November 2, 2018
Responsibility Statement
The following responsibility statement is made solely to comply with the requirements of DTR 4.1.12 of the United Kingdom Financial Conduct Authority's Disclosure Rules and Transparency Rules, in relation to Mitsubishi Corporation as an issuer whose financial instruments are admitted to trading on the London Stock Exchange.
Kazuyuki Masu, Chief Financial Officer, confirms that:
· to the best of his knowledge, the financial statements, prepared in accordance with International Financial Reporting Standards (IFRSs), give a true and fair view of the assets, liabilities, financial position and profit or loss of Mitsubishi Corporation and the undertakings included in the consolidation taken as a whole; and
· to the best of his knowledge, the management report includes a fair review of the development and performance of the business and the position of Mitsubishi Corporation and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.
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