Annual Report 2002

Transcription

Annual Report 2002

Creating Opportunities for Growth
by Leveraging Unique Specialties
Mitsubishi Rayon
Annual Report 2002 (Year ended March 31, 2002)
Profile
Mitsubishi Rayon Co., Ltd. was established in 1933 as a
manufacturer of rayon staple. Since then, the Company has
grown beyond the role of synthetic fiber maker to become
a leading manufacturer of polymers. Through constant
anticipation of future needs, we have expanded our business into the fields of synthetic resins, carbon fibers and
composite materials, plastic optical fibers, and highperformance membranes.
The management of Mitsubishi Rayon have recently drafted
a new medium-term business plan covering the period from
fiscal 2002 to 2004. Our main aims under this plan will be
to further strengthen our core sectors while growing new
core operations such as the Aqua-Sustainability Business. In
this way, we plan to turn the Mitsubishi Rayon Group into a
high-return, high-growth enterprise.
Contents
Financial Highlights ..............................................1
A Message from the President ...............................2
Board of Directors, Corporate Auditors and
Executive Officers ...............................................7
Strategies in Action ...............................................8
MRC Group at a Glance ......................................10
Business Performance Breakdown by Segment ...12
Chemicals and Plastics ....................................12
Fibers ............................................................13
Specialty Products, Engineering and Others ...14
Research & Development ...................................15
Environmental Activity & Safety Report .................16
Six-Year Summary ................................................17
Financial Review..................................................18
Consolidated Balance Sheets ...............................20
Consolidated Statements of Operations and
Retained Earnings .............................................22
Consolidated Statements of Cash Flows ...............23
Notes to Consolidated Financial Statements .........24
Independent Auditors’ Report ..............................33
Subsidiaries and Affiliates ....................................34
Organization ......................................................36
Corporate Data ..................................................37
Creating Opportunities for Growth by Leveraging Unique Specialties
The MMA (methyl methacrylate) and AN (acrylonitrile)
business complexes are the Mitsubishi Rayon Group’s
two main sources of earnings. Boasting high levels of
technological know-how and production capacity even
by world standards, these two business complexes serve
as powerful engines of growth in the many business
fields in which the Group is engaged.
To lay the foundations for further development, we
have not only mapped out a growth strategy that
leverages our strengths in these material categories, but
are also promoting a product R&D and marketing
approach closely attuned to user needs. By adopting a
well-balanced mix of the product-out approach used by
the business complexes and the market-in approach used
by our specialty products and engineering businesses,
we are confident of reorganizing our overall operations
in the direction of high return and high growth.
Overview of Business Segments
MMA Business Complex
Based around methyl methacrylate (MMA) as the basic
raw material as well as finished products made from
MMA, this business complex is the Company’s largest,
encompassing polymethyl methacrylate (PMMA), acrylic
films, coating resins, artificial marble, MBS resins, plastic
optical fiber (POF), and other products. The MMA
Business Complex is far and away the largest in Asia in
terms of scale, and is the largest in the world in terms of
range of items produced. The management is aiming to
leverage its structural strength to grow it into the world’s
largest comprehensive business complex.
AN Business Complex
Based around acrylonitrile (AN) as the basic raw material
as well as finished products made from AN, this business
complex produces acrylic fibers, carbon fibers, and
hydrogen cyanide derivatives. It aims to become the
largest polymer operation in Asia. Acrylic fibers are produced in Japan, where the Company boasts facilities that
are No.1 in scale in Asia, while spinning is carried out in
countries where wage levels are lower, such as
Indonesia, the Philippines, and China. Carbon fibers are
produced at plants in Japan and the United States using
precursor materials produced by Asia’s largest acrylic
fiber plant. Hydrogen cyanide, a by-product of acrylonitrile production, is used as the raw material for various
derivatives: these include flocculants, in which the
Company is No.1 in Asia. The Complex is also developing a pharmaceutical intermediates business utilizing
biotechnology and optical activity technology.
Business Complexes and Segments
Segments
Acrylic Business
AN
Business MMA Business Complex
Complex
Chemicals and Plastics
●
●
●
●
●
●
●
●
●
●
●
●
Fibers
Chemicals (MMA monomer, methacrylic acid,
higher ester)
Acrylic resins (MMA sheets, pellets)
Acrylic resin processed products (acrylic films,
aircraft materials, bathtubs)
Coating resins (for coating, painting and
adhesive use)
Resin additives (MBS resins, plastic modifiers)
DFR*
Artificial marble*
●
●
●
Hydrogencyanide derivatives
(pharmaceutical intermediates)
AN monomer*, Acrylamide*, Flocculants*
●
Acrylic fibers
Methylamine, DMF
Polyester resins
ABS resins*
●
Acetate fibers
Polypropylene fibers
Polyester fibers
Industrial-use fiber
(carpets, interior
decoration)
●
●
●
Sales
¥123 billion
Specialty Products, Engineering and Others Sales
●
¥97 billion
●
●
●
●
●
●
Plastic optical fibers
Plastic rodlenses
Image display materials
Construction materials (domes, lighting
covers, mirrors and water tanks)
¥ 90 billion
Carbon fibers and composite materials (tows,
cloth, prepreg, reinforced resin pellets)
¥ 63 billion
Water purifiers
Hollow Fiber Membrane Filter (industrial,
power generation and medical use)
Water treatment equipment and systems
Engineering & machinery systems
Printed circuit boards
¥153 billion
¥86 billion
¥306 billion
Products marked with an asterisk are manufactured by equity-method affiliates.
Note: The classification of Mitsubishi Rayon’s segments has been changed from the previous four areas — Chemicals and Plastics, Fibers, Specialty Products and
Others — to the three areas of Chemicals and Plastics, Fibers, and Specialty Products, Engineering and Others.
Future Growth Areas
The Aqua-Sustainability Business
Mitsubishi Rayon is advancing into the field of environmental protection, centered on its cutting-edge proprietary water treatment technology. We aim to grow the
world’s leading membrane-based water treatment business. The Aqua-Sustainability Business breaks down into
the areas of household-use water purification and industrial waste water treatment equipment employing hollow
fiber membranes, and waste water treatment utilizing
flocculants.
Information Materials Business
By leveraging our core competencies of optical control
technology and molecular design technology, we aim to
take advantage of our integrated polymethyl methacrylate
production system to become a major player in the world
market for optical fiber communications materials and
devices. The Information Materials Business is involved in
three business lines – the optical information transmission
business, centered on plastic optical fibers; the optical sensor business, which revolves around rodlenses; and the
electronic substrate business, whose main product is
printed circuit boards.
Construction Materials Business
The Company’s goal is to establish itself as a significant
presence in this market utilizing transparent resins as its
main material. This business handles numerous product
categories, including molding materials, sheets and films,
earthquake reinforcing materials, materials for water
tanks, mirror materials, materials for interior and exterior
decoration, exterior wall materials, plastic materials for
domes, and the construction of sports facilities.
Life Science Business
Mitsubishi Rayon is developing a new business that combines mainly biotechnology, hollow fiber membrane
technology, and resin processing technology. Products
include pharmaceutical intermediates, genome devices
(DNA chips), and medical devices such as water purification and carbonation equipment.
Energy Business
This business segment consists of the sale of materials
for fuel cells and for the LNG supply business. The
Company is adopting the market-in approach with a
view to growing this segment as a priority area in the
near future.
Market-in approach
Aqua-sustainability
Information
materials
Construction
materials
Energy
Life science
Functional materials/products/systems
Core competence and core products
MMA/PMMA/AN/Acrylic fiber/Carbon fiber
Product-out approach
Acrylic coating resins/MBS/Film
Global and unique special development
Mitsubishi Rayon Company, Limited and its Consolidated Subsidiaries
Financial Highlights
Years ended March 31, 2002 and 2001
Thousands of
U.S. dollars
Millions of yen
Net sales
2002
2001
2002
¥306,455
¥326,254
$2,299,850
529
(2,824)
3,970
Income (loss) before income taxes and minority interests
Net loss
(964)
(141)
(7,235)
Total assets
348,102
359,041
2,612,398
Shareholders’ equity
136,153
138,942
1,021,786
Net loss per share — Basic (yen and dollars)
¥
(1.54)
¥
(0.22)
$
(0.01)
Shareholders’ equity per share (yen and dollars)
217.34
221.77
1.631
Net cash provided by operating activities
31,685
28,612
237,786
Net cash used in investing activities
(16,991)
(7,361)
(127,512)
Net cash used in financing activities
(14,534)
(20,044)
(109,073)
10,948
10,331
82,161
Cash and cash equivalents at end of year
Notes:
1. The translation of yen amounts into U.S. dollars is included solely for convenience, as a matter of arithmetical computation only, at the rate of
¥133.25=$1.
2. The computation of net loss per share is based on the weighted average number of shares of common stock outstanding during each year.
Net sales
Net income (loss)
Total assets
(¥ billion)
(¥ billion)
(¥ billion)
Net income (loss)
per share
(¥)
9.6
349
347
310 313
326
306
8.2
7.2
97
98
99
00
01
02
1
97
98
99
7.6
00
411
-0.1
-0.9
01
02
97
402
98
15.4
378
99
358
00
359 348
01
02
13.0
11.4
97
98
99
12.1
00
-0.2
-1.5
01
02
A Message from the President
New Medium-Term Management Plan
Has Been Launched
Yoshiyuki Sumeragi
President
Mitsubishi Rayon is now definitely back on the growth path
thanks to the achievement of the targets under its three-year
management plan ended March 2002.
The current three-year plan, started April 2002, is focused
on the accelerated creation of a high-return, high-growth
corporate group.
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Mitsubishi Rayon’s structural reform efforts have been rewarded with outstanding
success. Over the past three years, we have carried out the difficult tasks of bolstering
group management, reorganizing business units, and reducing costs, thanks to which
we have greatly improved the Mitsubishi Rayon Group’s efficiency and cost structure.
Under our new three-year management plan, starting from April 2002,we are
firmly resolved to take every possible step to realize our goal of transforming the
Mitsubishi Rayon Group into a high-return, high-growth corporate entity.
Overview of achievements under the
previous management plan
I would first like to report on our
achievements under the “US→21” three-year
management plan, which ended March 2002.
The main goal of “US→21” was to lay the
cornerstones of future growth. As means of
attaining this goal, three priority targets were
designated: 1) fully integrated management
on the consolidated group level, 2) reform of
the group’s structure, and 3) strengthening of
cost-competitiveness.
Regarding target 1, achieving full
integration of group management, in response
to the movement toward the adoption of new
accounting standards more strongly focused
on accounts on a consolidated basis, in June
2001 we reorganized the managements of the
parent company and other group members.
We also introduced a new system of
“management responsibility units” to facilitate
the performance assessment system of
business units.
In the area of structural reform, to ensure
our long-term success as a corporate group
with acrylic (methyl methacrylate and
3
acrylonitrile) product chains, in which we
enjoy strength on the global market as our
core business, we plan to focus more
management resources on these core
businesses, and to employ a variety of
measures to solve the issues of businesses
where we have little hope of making higher
return on our own. Options include
collaboration with other companies, spinning
off as separate enterprises, withdrawal from
certain business fields or integration of
operations. In fiscal 2001, we initiated not
only joint acrylonitrile operations with
Mitsubishi Chemical Corporation but also joint
ABS resin operations with Ube Industries and
General Electric, and sold off our carbon
dioxide and dry ice operations. Through the
winnowing process, Mitsubishi Rayon made
significant strides toward completely
reforming its operational structure with the
goal of getting back on the growth track.
Turning to the third target of
strengthening cost-competitiveness, our
success exceeded expectations. Thanks to
reductions in the cost of production as well as
selling, general and administrative costs, we
lowered costs by approximately ¥9.5 billion,
thus surpassing our initial target by ¥1 billion.
I believe that these results show that we
have effectively met our targets under the
“US→21” management plan. Thanks to these
successes, the morale of Mitsubishi Rayon’s
staff has risen, and we are moving forward in
pursuit of yet higher goals.
Business performance for fiscal 2001
The Company faced extremely difficult
circumstances during fiscal 2001 owing to the
worldwide economic stagnation, which was
exacerbated by the tragedy in USA on
September 11. The slump in demand was
particularly severe in Asia, which is one of the
Company’s largest markets.
On a consolidated basis, the Mitsubishi
Rayon Group recorded sales of ¥306.4 billion
for fiscal 2001, down 6.1% from the previous
business term, and operating income of ¥19.2
billion, down 6.8%. A net loss of ¥0.9 billion
was registered. Sales declined due to the spinoff of some of the Company’s acrylonitrile
operations to an affiliate accounted for by the
equity method, while earnings were affected
by an extraordinary loss registered for the
term under review in the amount of ¥10.3
billion resulting from amortization of
retirement benefit obligations. This amortized
amount is out of a total shortfall of ¥35.3
billion: ¥24.9 billion had been amortized in
the previous fiscal year, and the amortization
was thus completed with the term under
review.
These results are regrettable. Nonetheless,
in the face of worsening market conditions,
including both higher raw materials prices
and lower prices of the Company’s products,
the Mitsubishi Rayon Group’s structural
4
reorganization and measures to reduce costs
bore fruit, as the group was able to hold the
decline in its earnings to a minimum.
New medium-term management plan
“Program: US→2004”
Mitsubishi Rayon initiated its 4th medium-term
management plan in April 2002. Without
easing up on the Company’s drive toward
structural reform, the new plan switches the
focus of attention to plans for growth by the
Mitsubishi Rayon Group with the goal of
establishing a high-return, high-growth
business entity. To this end, priority will be
assigned to the following four points:
1) Increased focus on core competencies for
growth
In line with our policy of concentrating on
those business areas in which we are
competitive, we plan to focus management
resources on the Group’s core operations –
the methyl methacrylate (MMA) and
acrylonitrile (AN) business complexes. In
particular, in the MMA business complex we
aim to create a comprehensive development
ability covering monomers, molding materials,
sheets, coating materials, and processed
products, with the goal of becoming the
world’s No. 1 enterprise.
In the AN business complex, we plan to
focus marketing and technology resources
particularly on carbon fibers for industrial-use
and energy-related areas, where strong
expansion in demand is expected, and in
which we possess a competitive start-to-finish
production system.
A further major objective is to create, as
soon as possible, another earnings generator
to supplement the acrylics business
complexes. I see a promising future in the
environmental field, particularly water
resources, including water purification and
wastewater treatment utilizing hollow fiber
membranes, where the Company has already
demonstrated the excellence of its unique
technology. Moreover, management resources
will also be selectively focused on new
growth fields such as fibrous DNA chips, with
the aim of early business start-ups.
During the period of the new mediumterm management plan, we anticipate total
capital spending on the order of ¥75 billion,
and we will devote our full efforts to the
realization of the growth scenario we have
drafted.
2) Reform of earnings and cost structure
In the last few years, the chemical industry
has been beset on a global scale by
competition of an intensity never before
experienced, which has led to a wave of
mergers and business alliances. Companies
now need to strengthen their competitiveness
still further in order to survive. Starting with
technical innovation in the production process
as the wellspring, we are raising the efficiency
of our operations across the entire range of
our activities. In addition to business
restructuring and technical innovation, we are
reducing the costs of materials procurement
and processing, as well as the cost of clerical
operations through the increased employment
5
of information technology and outsourcing.
Following our success in cutting costs by ¥9.5
billion under the previous management plan,
under the current plan we are targeting a
reduction of ¥9 billion by the end of fiscal
2004.
3) Strengthening capabilities in basic research
and development
We plan to restrict R&D to those areas where
findings will be applicable to the business
fields in which the Company is engaged. In
other words, priority will be placed on the
MMA-related businesses and promising
growth areas such as life sciences, as well as
water purification and waste water treatment.
We intend to conduct strict R&D costperformance management. In particular, we
will put top priority on innovations in
production technology that lead to dramatic
improvements in process efficiency, as well as
emphasizing the need for speedy
commercialization of new discoveries in line
with our philosophy of being a “unique
specialty group.”
4) Addressing environmental issues
As a corporate citizen, it is the duty of
Mitsubishi Rayon to take steps to help protect
the environment, and accordingly, the
management has set targets for the reduction
of emissions of substances that cause
environmental load, and has been making
determined efforts to meet these targets. From
fiscal 2002, the Company will be adopting a
full-scale system of environmental accounting,
and the results will be disclosed to the public.
Under the medium-term management
plan described above, the Mitsubishi Rayon
Group has set targets for the final year, fiscal
2004, of ¥340 billion in sales and ¥30 billion
in operating income.
I intend to create a stronger corporate
structure over the next three years, and in this
way to set the stage for full-scale earnings
growth in the three-year period starting in
fiscal 2005.
More rigorous corporate governance
Companies these days are being required to
display ever higher degrees of transparency,
and to demonstrate that their management is
conducted in a fair and impartial manner. To
this end, in May 2002 we established a
management advisory committee including
experts from outside the Company. The task
of the committee members is to ensure,
through the provision of advice and
proposals, the even more rigorous
performance of corporate governance in
accordance with the highest principles,
covering not merely the observance of laws
and regulations by the Company and its
Group members, but also management that
places priority on the interests of shareholders
and investors.
In conclusion, although no single one of
the Mitsubishi Rayon Group’s businesses is of
a very large scale, each one has a major
presence in a global market. For example, in
the MMA business complex, we maintain an
overwhelming dominance in the Asian
market. Also, the Mitsubishi Rayon Group is
the only supplier of triacetate fiber in the
world. The Group also boasts a market share
of roughly 70% in the world market for plastic
6
optical fiber. In this way, our policy is to
create the corporate group with the
competitive business units by which we can
be sure of winning a gold medal.
Over the last few years, the management
of Mitsubishi Rayon have devoted great efforts
to rectifying the prevailing cost corporate
structure, reviewing our business portfolio
and fully adapting the Company to the new
accounting standards that have been
successively introduced. Thanks to these
efforts, we are confident that we have now
built a firm base for future growth and
prosperity, and that the Company will
properly return to the growth track within a
very short while. From here onward, we
intend to make steady inroads into the global
market with a stream of superior products,
thereby satisfying the expectations of our
shareholders and of market investors in
general.
I would like to thank all our shareholders
for their support.
Yoshiyuki Sumeragi
President
Board of Directors, Corporate Auditors and Executive Officers
Eiichi Taguchi
Yoshiyuki Sumeragi
Chairman
President
Koji Mimura
Isao Yamamoto
Masanao Kanbara
Senior Managing Director
Isao Sasaki
Katsuyoshi Fukuroya
Managing Director
Managing Director
Chairman
Directors
Executive Officers
Eiichi Taguchi
Naoki Yamamoto
Takumi Ubagai
Takumi Ubagai
Tomonobu Kokubu
Yuzo Aoyama
Yoji Tanaka
Kazuhiko Morifuji
Tatsuo Fuji
Hideki Kojima
Shinpei Haratake
Masanobu Watanabe
President
Yoshiyuki Sumeragi
Senior Managing Directors
Koji Mimura
Isao Yamamoto
Masanao Kanbara
Managing Directors
Isao Sasaki
Katsuyoshi Fukuroya
7
Corporate Auditors
Masaaki Aoki
Yoriyuki Tanaka
Hideki Hoshina
Hideaki Kawata
Senior Executive Officers
Koji Mimura
Masanao Kanbara
Katsuyoshi Fukuroya
Yasuro Noguchi
(As of June 27, 2002)
Strategies in Action
China’s first foreign-owned maker of acrylic resin pellets set up
In September 2001, the Nandong Rayon
Chemical Co., Ltd. was established by
Mitsubishi Rayon Co., Ltd. in Nandong,
Jiangsu Province. The new company, which
will start operation in the autumn of 2003
with an annual production capacity of 40,000
tons, is the first foreign-owned manufacturer
of acrylic resin pellets in China. It will feature
state-of-the-art manufacturing facilities – the
world’s largest single production line in this
field. The Chinese domestic market for acrylic
resin pellets is forecast to grow at
approximately 10% per annum. Apart from
the material’s current principal uses – lenses,
sundry household articles, consumer
electronic products, lighting fixtures, and so
on – considerable growth in demand is
projected in the future from the automotive
and IT sectors. The new company will play a
valuable role in helping the Mitsubishi Rayon
Group’s methyl methacrylate (MMA) business
complex, one of its two core business sectors,
to maintain its leading position within Asia. At
the same time, it will also serve as a valuable
weapon in the Group’s quest to become No.1
in the world in the field of MMA.
President Sumeragi makes a speech
at the ceremony laying down the
cornerstone in March 2002.
New plant under construction for production of environmentally
friendly acrylic powder
Tile carpeting with acrylsol
backing material
The construction of a new plant for the
production of acrylic powder is underway on
the ground of the Company’s Otake
Production Center, with the start of operation
scheduled for April 2003. The new plant, with
an annual production capacity of 1,000 tons,
will raise the Company’s total output of
acrylic powder, to 15,000 tons. Mitsubishi
Rayon was the first company in the world to
commercialize acrylic powder, which is
mainly used in the production of acrylsol.
Acrylsol is being widely touted as a substitute
8
for PVC-based plastisol. Moreover, not only is
it superior to PVC-based plastisol in terms of
filming at low temperatures, heat-resistance,
and weather resistance, but in addition the
production process is easier because
processing temperatures can be reduced.
Demand for acrylsol is growing for use in
vehicle undercoats and body sealers, and in
tile carpet backing materials, among other
applications.
Acrylic fiber production joint venture planned in China
Mitsubishi Rayon is pushing ahead with a plan
to set up acrylic fiber production operations in
China to take advantage of the rapidly growing
market in that country. As the first major step
Mr. K. Fukuroya, a managing director,
handing over the application for approval of
the establishment of the new company in
June 2000.
under the plan, in November 2001 the
Company became the first foreign enterprise to
receive approval from State Development
Planning Commission for the establishment of a
joint venture to pursue the manufacture of
acrylic fiber. China is the world’s largest user of
acrylic fiber, with annual demand at
approximately 900,000 tons, and demand is
expected to grow still further as a result of the
country’s membership of the WTO. With the
aim of beginning operations in fiscal 2004, the
Company is currently studying details of a plan
for the construction of a plant with an annual
production capacity of 50,000 tons in the city of
Ningbo.
Hollow fiber membrane product company established in Dalian
Hollow fiber membrane
products
In February of this year, Mitsubishi Rayon
signed an agreement with Daiki Co., Ltd., a
Shikoku-based company with extensive
experience in the liquid waste processing
field, to establish a joint-venture company in
Dalian, northeast China. The new venture,
Dalian Rayon Environmental Equipment Co.,
Ltd., will engage in the manufacture and sale
of hollow fiber membrane products for use in
wastewater treatment. Production operations
are scheduled to begin in July of this year,
with a production capacity for the first year of
operations of 100,000m2 and projected annual
sales of ¥300 million.
The Beijing municipal authorities are
implementing plans to significantly upgrade
the city’s sewage system. These plans have
been given added impetus by the scheduled
holding of the 2008 Olympic Games in the
9
Chinese capital. As a result of this and moves
to improve wastewater control elsewhere in
China, a considerable expansion in the
wastewater processing market is forecast.
Moreover, the use of membranes in water
treatment is becoming the focus of attention
on a worldwide scale, and Mitsubishi Rayon
has already delivered such products to
overseas customers, particularly in East Asia.
The creation of the new company will
also take advantage of the physical proximity
of Dalian to anticipated major centers of
demand in East Asia, and will allow
Mitsubishi Rayon to enjoy the merits of the
lower processing costs in China. It will
constitute one more step in the grobal
expansion of the Company’s membrane
business.
MRC Group at a Glance
Sales results
(¥ billion)
Share of consolidated sales
Overseas sales
135
123
40.2%
Acrylic sheets
SHINKOLITE
2001
2002
Fibers
Overseas sales
101
96
31.7%
Acrylic filament
SILPALON
2001
2002
Specialty Products, Engineering and Others
88
Overseas sales
86
28.1%
Aquarium domes of
SHINKOLITE
10
2001
2002
Performance review
●
Overall demand was weak due to the IT slump, resulting in poor
sales value and volume.
●
Shipments of PMMA sheets set a record: a large order was won
for use in commercial signs, while a major growth was seen to
makers of LCDs and light-guiding plates, which are an area of
specialty for the Mitsubishi Rayon Group.
●
In acrylic coating materials, sales growth was recorded in environmentally friendly high-performance acrylic powder, and in
resins for tin-free paints for ship bottoms.
●
In the acrylic staple business, the effects of increased imports into
Japan and a further decline in demand in this country were more
than offset by expanded sales in overseas markets, particularly
our principal market, China. Overall sales volume thus posted a
record high.
●
In the markets for acetate and polyester fibers, demand for use in
women’s wear, a principal component of the Japanese market,
remained slack, and the Company therefore cut back its polyester
fiber production still further. On the other hand, we were successful in expanding sales of triacetate fiber in China, which compensated for a slump in sales on the U.S. market.
●
The Mitsubishi Rayon Group’s carbon fiber production capacity
was strengthened by 1,300 tons to 4,700 tons.
●
As a result of the growing popularity throughout the world of
membrane-type water treatment technologies, we put further
effort into the development of new markets for hollow fiber
membrane products.
●
Mitsubishi Rayon Engineering Co., Ltd. enjoyed steady progress
in the development of its plant engineering and environmental
businesses, centered on waste disposal.
11
Major products
■ Chemicals
■ Pellets
■ Sheets and Films
■ Plastic Modifiers
■ Coating Materials
■ Artificial Marble
■ Acrylic Fibers
(Staples, Filaments)
■ Acetate Fibers
(Filaments, Tows)
■ Polyester Filaments
■ Polypropylene Filaments
■ Textile Products
■ Carpets
■ Carbon Fibers
■ Composite Materials
■ Plastic Optical Fibers
■ Plastic Rodlenses
■ Printed Circuit Boards
■ Water Purifiers
■ Hollow Fiber Membrane
■ Water Treatment Systems
■ Plant Engineering
■ Construction Materials
Business Performance Breakdown by Segment
Sales of the Chemicals and Plastics segment for the term ended March 31, 2002 came
to ¥123,272 million, a year-on-year decrease of ¥12,556 million, or 9.2%. This
segment accounts for 40.2% of total sales on a consolidated basis.
MMA monomer is widely used for
chemical products.
PMMA sheets for LCD screens are
in strong demand.
Demand for MMA (methyl methacrylate)
monomer was generally weak, due mainly to
relatively sluggish demand for use in IT
equipment – which saw brisk sales in the
previous term – and for transparent plastics.
Production levels were as scheduled overall,
despite a temporary drop in the capacity
utilization rate in the second half. Capacity at
Thai MMA Co., Ltd. was raised from 55,000
tons to 70,000 tons.
Sales volume of all categories of resin
pellets (acrylic, ABS and polyester) shrank
against the background of continued weak
demand from makers of vehicles, electrical
equipment, and household sundries as well as
a fall in demand from IT equipment
manufacturers.
Steady growth was seen in sales of PMMA
sheets for use in light-guiding plates for LCD
screens, while a large-scale order was
received for shop signboards.
Plastic modifiers sold weakly in the
Japanese market, but grew in volume terms in
Southeast Asia.
Following the principle of focusing on
core competencies in MMA business
operations, further consolidations and
business transfers were carried out: specifics
are as follows.
•The acrylonitrile and derivatives
businesses were transferred to our affiliate,
Dia-Nitrix Co., Ltd., a joint venture
established with Mitsubishi Chemical
Corporation.
•The carbon dioxide and dry ice business
was sold to an affiliate of Mitsui
Chemicals, Inc.
•The Company’s ABS resin business was
transferred to our affiliate UMG ABS Co.,
Ltd., a three-way joint venture established
with Ube Industries Ltd. and General
Electric Company.
MMA Business Complex: Aiming to be world’s No.1 business complex
using comprehensive capabilities
Goals under the
12
To accelerate global development with main focus on the Asian market
To build production center in China as third manufacturing base
following Japan and Thailand
● To achieve synergy through coordination of monomer and polymer
business strategies
● To establish superior cost-competitiveness
●
●
Fibers
Sales of the Fibers segment for the term under review declined by ¥4,928 million, or
4.8%, to ¥96,997 million. This segment accounts for 31.7% of total sales on a
consolidated basis.
The triacetate fiber SOALON is a
unique material for use in
apparel, and has received high
marks both in Japan and
overseas.
In acrylic staple fibers, the Company’s sales on
the Japanese market declined further, owing to
competition against imported products. In
overseas markets, demand from China was
firm, both for use within China and for export.
The Company’s sales volume as a whole
reached a record high thanks to expanded
sales to China and other Asian countries. In
value terms, we worked to achieve a recovery
in the prices of products that had declined, but
competition with non-Japanese manufacturers
made this very difficult. At the production
level, capacity utilization improved thanks to
the growth in overall sales.
In the field of triacetate, diacetate and
polyester filaments, the marketing and
processing operations were spun off as the
separate company Mitsubishi Rayon Textiles
Co., Ltd.. With the withdrawal of other
manufacturers from the field of triacetate
filament production, Mitsubishi Rayon Co., Ltd.
Goals under the
VONNEL is a comfortable, warm
acrylic fiber ideal for sweaters and
blankets.
13
is the world’s only maker, while in the case of
diacetate filaments, we are the sole
manufacturer in Japan. We therefore look
forward to enjoying advantageous market
position over the long term.
In polypropylene filaments, we developed
new products with superior flame resistance,
weatherability, and durability as part of our
efforts to contribute to environmental
preservation and waste reduction.
The revenues of Mitsubishi Burlington Co.,
Ltd., a manufacturer of carpets, remained
depressed during the term, owing to the slump
in the construction industry, but the decline in
sales volume from the previous term was only
slight, thanks to favorable sales of adhesivebacked tile carpets and the receipt of large-lot
contracts for offices.
Acrylic fibers: To establish a production center in China
aiming for unmatched level of presence in the Asian
market
Textiles: To develop a global niche business through the
merger of acetate and polyester fiber operations
Specialty Products,
Engineering and Others
Sales of the Specialty Products, Engineering and Others segment came to ¥86,184
million, representing a year-on-year decrease of ¥2,314 million, or 2.6%, from the
figures for the corresponding operations within “Specialty Products” and “Others” for
the previous business term. This segment accounts for 28.1% of total sales on a
consolidated basis.
Plastic rodlenses, an aspheric
surface lens, is used in key
components of imaging and
reproduction devices.
Sales to Asian countries of carbon fiber and
prepreg products for use in sports goods were
sluggish. We shifted the focus of our
operations further in the direction of unique,
high-end products. In industrial-use products,
sales to the construction and civil engineering
sector turned downward, but expanded sales
volume was recorded in rolls for printing
presses. Progress was also made in the
development of new applications in the fields
of automotive and aircraft components, as
well as pressure vessels, which are all
promising growth areas.
Sales of materials to manufacturers of IT
equipment were very slack, owing to the
severe stagnation in the electronics sector as a
whole, but further progress was achieved in
developing promising new applications such
as optical fiber for home networks and
rodlenses for printer-use LEDs.
In home-use water purifiers, we enjoyed
brisk sales of faucet-attached models that
remove lead and trihalomethane. In the field
of hollow-fiber membrane products, we made
further advances overseas with an agreement
with Daiki Co., Ltd. to establish a company
for the manufacture and sale of sewage
treatment membrane products in Dalian, China.
In plant engineering operations,
Mitsubishi Rayon Engineering Co., Ltd.
recorded growth in revenue from work in the
environmental field, including the
construction of waste treatment facilities.
Ryoko Co., Ltd. continued to experience
difficulties in its mainline business of
construction materials, but sales turned
upward compared with the previous term
thanks to the concentration of the Group’s
construction-related business in the company.
Carbon fibers: To maximize cost competitiveness and accelerate
development of industrial applications through full utilization of
strengths in the AN business complex
Goals under the
Aqua-sustainability: To accelerate the global expansion of the water
purification and waste water treatment businesses
Information materials: To develop applications for plastic optical fibers in
optical data transmission, such as automobile applications
Construction materials: To develop a “one-stop shop” business through
our consolidated subsidiary Ryoko Co., Ltd.
Life science: To establish a de facto standard in DNA chip business with
clinical testing devices
14
Research & Development
As part of its policy of becoming a corporate entity founded on “unique specialties,”
the Mitsubishi Rayon Group is focusing management resources on innovative and
advanced technology in production in order to further strengthen the core
competence of Business Complex, which is based on acrylic products. At the same
time, we are making strong efforts to research and development in the fields of
specialty materials and products that are precisely tailored to user needs. We are also
energetically laying the foundations for further business development in the
biotechnology, which is expected to become one of the 21st Century’s major areas of
growth. For example, we have successfully developed production technology for
fibrous DNA chips, and have installed the medium-scale manufacturing facilities.
The Mitsubishi Rayon Group’s R&D expenses
for fiscal 2001 amounted to ¥10,795 million,
and the R&D staff consisted of 684 persons.
The following shows that principal R&D
achievements for the reporting term.
Development of new manufacturing process
to improve acrylamide productivity
dramatically.
Development of the purified technique of
isobutylene from raw material with low
concentration isobutylene, and start-up of
new production line at MMA plant in
Thailand.
Launch of sales of hard coated PMMA sheet
with anti-static performance for projection
TV front panel.
Development of environmentally friendly
acrylic powder for acrylsol, sales of which
for automotive are growing steadily.
●
●
●
●
Fibers
Development of A.H.F, a new specialty fiber
consisted of acryl and acetate composition
by using special blend technology, which
●
●
●
Specialty Products
Progress made in the development of
technology for improving productivity in the
manufacture of carbon fibers or precursors
for carbon fiber raw materials.
Development and commercialization of IEEE
1394 compatible optical components and
plugs for optical communications devices for
use in home-use telecommunications
networks.
Two home-use water purifiers developed
and marketed: the Super STX, a counter-top
type with superior performance in removing
lead and trihalomethane, and the faucetattached type 02 CLEANSUI.
●
●
●
Others
Practical development of technology for lowcost mass production of DNA chips, and
installation of medium-scale production
facilities.
Succeeded in developing roll-shaped gas
diffusion layer for fuel cell batteries by
means of low-cost continuous production
method, and commenced production of
samples.
●
●
“Fibrous DNA chips” — the result
of the fusion of a wide range of
Mitsubishi Rayon’s proprietary
technologies — represent a
revolutionary breakthrough in terms
of production technology.
A.H.F, a revolutionary composite of acrylic
and acetate fibers
15
shows not only moisture absorption, but also
moisture retention, and features antibacterial
properties to prevent unpleasant odors and
deordorization.
Development of FCY, a high-class polyester
fiber with a soft, silky touch.
Development of HIGHTOUCH, a
polypropylene fiber that is ideal for soft
carpets for the home.
Environmental Activity & Safety Report
In line with their overall management
philosophy, Mitsubishi Rayon and the
Mitsubishi Rayon Group pursue the following
basic policies with regard to safety, the
environment, and product quality.
●
Top priority shall be placed on safety and
the environment in all business activities, as
these are essential for corporate existence.
●
We shall supply our customers with
satisfactory, safe and reliable products.
2. Mitsubishi Rayon took part in international
efforts in the field of chemical substance
safety assessment, including the ICCA global
initiative on High Production Volume
Chemicals, and the U.S.Challenge Program.
3. Mitsubishi Rayon has adopted the practice
of environmental accounting on a test basis,
with plans for the establishment of a full
system and regular public disclosure from
fiscal 2002.
4. To ensure that Mitsubishi Rayon’s material
safety data sheets (MSDS) contain all
necessary information, in-house standards on
MSDS drafting were revised and operation
was started of a system of MSDS management
using a database.
5. In-house guidelines were drawn up for the
purchase of environmentally friendly general
office supplies and other materials.
6. Special contingency management rules
were drafted to over a wide field, including
product safety and improve the Company’s
hazard management abilities environmental
impact.
7. Risk assessment activities, which are
essential to the operation of an effective
OHSMS (occupational health and safety
management system), were carried out on a
Company-wide basis.
Treating the ISO 14001 certification as the
main benchmark, we have made substantive
progress in achieving compliance with global
standards in our environmental and safety
activities, and in raising our level of
management transparency through
appropriate disclosure.
Highlights of Fiscal 2001
1. Progress was made in reducing emissions
of air pollutant chemicals according to plan
under the Company’s second emissions
reduction program covering the FY2001-2003
period.
Investment in Safety and Environmental Protection
Equipment
Investment in safety
and environmental
protection equipment
Energy intensity levels
(%)
Landfill waste
volume
(1,000 t)
(¥ Billion)
100.0
2.6
98.9
10.9
Mitsubishi Rayon intends to press on with measures
to reduce or eliminate the emission of dioxin,
reduce the volume of industrial waste, conserve
energy, and curb emissions of toxic air pollutants.
To this end, investment will be made in all
necessary equipment.
Energy Intensity Levels
2.0
1.9
2.0
95.1
95.1
1.5
1.4
Mitsubishi Rayon is pursuing a policy of reducing
energy consumption per unit of production by at
least 1% per year. The Company has set itself a
target of a reduction to 90% of 1990 levels by 2010.
93.9
93.7
1.6
89.6
4.9
3.8
FY95 96
97
98
99
00
FY90 97
01
16
98
99
00
01 10
(target)
FY91
01
*excluding coal ash
05
(target)
Landfill Waste Volume (excluding coal ash)
Mitsubishi Rayon reached its target for reduction of
the volume of landfill waste, excluding coal ash, up
to fiscal 2000. Subsequent to this, new reduction
targets for the FY2001-2005 period were drawn up.
As the commercial viability of plans for the reuse of
coal ash is now in sight, new targets for landfill
waste reduction will exclude coal ash.
Mitsubishi Rayon Company, Limited and Consolidated Subsidiaries
Six-Year Summary
Years ended March 31, 2002, 2001, 2000, 1999, 1998 and 1997
Millions of yen (except per share)
2002
2001
2000
1999
1998
1997
¥ 306,455
¥ 326,254
¥313,888
¥310,556
¥347,282
¥349,116
230,410
246,732
235,869
229,855
253,970
259,992
Selling, general and
administrative expenses
56,837
58,915
59,028
61,105
64,627
66,302
Operating income
19,207
20,607
18,990
19,595
28,683
22,821
529
(2,824)
10,502
13,205
16,584
15,654
(141)
7,687
7,268
9,677
8,207
Net sales
Cost of sales
Income (loss) before income taxes
and minority interests
Net income (loss)
(964)
Total assets
348,102
359,041
358,551
378,990
402,074
411,955
136,153
138,942
148,947
147,315
138,348
132,145
53,229
53,229
53,229
53,229
51,926
51,926
Common stock
Amounts per share (yen):
Net income (loss) — Basic ¥
Diluted
(1.54)
¥
(0.22)
¥
12.10
¥
11.41
¥
15.42
¥
13.08
—
—
12.07
11.29
15.01
12.76
6.00
6.00
6.00
6.00
6.00
5.00
217.34
221.77
237.74
229.11
220.50
210.61
¥ 16,537
¥ 16,898
¥ 17,982
¥ 17,822
¥ 17,612
¥ 18,733
Capital expenditures
16,722
14,866
15,009
17,725
21,863
15,199
Total debt
91,060
97,665
114,276
134,149
140,621
155,415
R&D expenses
10,795
10,768
10,738
11,158
11,516
11,550
9,211
9,656
10,043
9,193
9,246
8,799
Cash dividends
Depreciation
Number of employees
Yen
Common stock price range:
High
471
410
370
417
502
497
Low
262
250
207
272
252
365
17
Financial Review
(on a consolidated basis)
amortization of shortfall in reserves for
retirement benefits, resulting from the
application of new accounting standards, and
loss on valuation of held-for-investment
securities, net other expenses came to ¥18,678
million (US$140.2 million). The total shortfall
in reserves for retirement benefits of ¥35.3
billion was amortized in the amount of ¥24.9
billion in fiscal 2000 and the remaining ¥10.3
billion was amortized in the term under
review, both in the form of extraordinary loss.
For this reason, the net loss figure increased
from ¥141 million for the previous term to
¥964 million (US$7.2 million) for the term
under review.
Operating Results
During the term under review, ended March
31, 2002, industrial production as a whole
declined on a global scale owing to a
slackening-off in demand. The situation
increasingly gave the appearance of a
worldwide recession. In Japan, meanwhile,
consumer spending continued its prolonged
stagnation, and economic conditions went
from bad to worse.
Amid this business environment, the
Mitsubishi Rayon Group registered a decline in
sales of 6.1% from the previous term, to
¥306,455 million (US$2,299.9 million). Gross
profit on sales was down 4.4% year-on-year, at
¥76,044 million (US$570.7 million). The main
factors behind this performance were a decline
in sales volume attributable to the spin-off of
certain operations, and a decline in product
prices.
Selling, general and administrative
expenses for the term were down 3.5% yearon-year, at ¥56,837 million (US$426.5 million),
while operating income was down 6.8%, at
¥19,207 million (US$144.1 million).
In the category of “other income and
expenses,” as a result of the registration of the
Operating income
Operating income to
total assets ratio
(¥ billion)
Financial Position
During the term under review, total assets
declined by 3.0% to ¥348,102 million
(US$2,612.4 million), mainly due to a decrease
in notes and accounts receivable. Meanwhile,
total liabilities declined by 5.3% to ¥206,341
million (US$1,548.5 million), mainly due to a
decrease in trade payables and interest-bearing
liabilities.
Current assets were down 9.2% from the
previous term-end, at ¥143,923 million
Total debt
Total shareholders’
equity
(¥ billion)
(%)
(¥ billion)
147 148
7.1
30.4
132
138 136
138
155.4
24.8
19.5 18.9 20.6 19.2
114.2
5.5
97
98
99
18
00
01
02
140.6 134.1
5.7
97
97.6
5.5
98
5.1
5.2
99
00
01
02
97
98
99
00
01
91.0
02
97
98
99
00
01
02
(US$1,080.1 million), whereas property, plant
and equipment rose 3.8% to ¥130,444 million
(US$978.9 million).
Current liabilities fell 12.8% to ¥131,886
million (US$989.8 million), and the equity ratio
stood at 39.1%, up slightly from the 38.7% of
the previous term-end.
Net Overseas Sales by Geographic
Location
The Company’s consolidated sales in markets
outside Japan during the term under review
rose ¥6,620 million over the previous term, to
¥98,854 million (US$741.9 million), accounting
for 32.3% of total sales. Sales in the Asian
market (principally China, Thailand, and
Indonesia) rose ¥4,419 million to ¥59,666
million (US$447.8 million), while sales in the
rest of the world (principally the North
America and Europe) rose ¥2,202 million to
¥39,188 million (US$294.1 million).
Cash Flows
amounted to ¥31,685 million (US$237.8
million), a ¥3,073 million year-on-year
increase, owing to an improvement in the
income before income taxes account and a
decline in trade receivables.
amounted to ¥16,991 million (US$127.5
million), a ¥9,629 million increase over the
previous term, due to increased capital
spending. Net cash used in financing activities
decreased by ¥5,510 million from the previous
year, amounting to ¥14,534 million (US$109.1
million), owing to the repayment of
borrowings.
As a result of the foregoing, cash and cash
equivalents as of the term end stood at
¥10,948 million (US$82.2 million), an increase
of ¥616 million over the previous term-end.
R&D Expenses
Mitsubishi Rayon conducts research and
development utilizing its proprietary
technologies in organic composition, polymer
composition, molecular design, and DNA
chips, with the goals of achieving innovation in
production methods and creating new products
that can become the driving force of new
business enterprises. R&D expenses for the
term under review came to ¥10,795 million
(US$81.0 million), a year-on-year increase of
¥27 million.
Depreciation
R&D expenses
Sales breakdown by area
(¥ billion)
(¥ billion)
(¥ billion)
(%)
18.7
17.6 17.8 17.9
11.5 11.5
21.8
16.8 16.5
17.7
15.1
11.1 10.7 10.7 10.7
Asia 19.5
16.7
15.0 14.8
Others 12.8
Japan 67.7
Asia: Mainly China, Thailand and Indonesia
Others: Mainly North America and Europe
97
98
99
00
19
01
02
97
98
99
00
01
02
97
98
99
00
01
02
Consolidated Balance Sheets
March 31, 2002 and 2001
Thousands of
U.S. dollars
(Note 3)
Millions of yen
Assets
2002
2001
2002
¥ 11,100
¥ 10,449
—
679
—
Notes
12,228
16,397
91,767
Accounts
61,912
74,492
464,630
Less allowance for doubtful accounts
(1,020)
Current Assets:
Cash and time deposits (Note 10)
Marketable securities (Note 5)
$
83,302
Notes and accounts receivable:
(603)
(7,655)
73,120
90,287
548,743
43,438
43,790
325,989
1,568
2,152
11,767
14,694
11,189
110,274
143,923
158,548
1,080,098
475,812
476,014
3,570,822
(345,367)
(350,374)
(2,591,872)
130,444
125,639
978,942
12,922
15,697
96,976
Other investment securities (Note 5)
32,554
34,491
244,308
Deferred tax assets (Note 8)
16,398
13,336
123,062
Other assets (Note 10)
11,858
11,327
88,991
73,734
74,853
553,351
¥348,102
¥359,041
$2,612,398
Inventories
Deferred tax assets (Note 8)
Other current assets
Total current assets
Property, Plant and Equipment: (Note 7 and 10)
Less accumulated depreciation
Property, plant and equipment, net
Investments and Other Assets:
Investments in and advances to unconsolidated
subsidiaries and affiliates
Total investments and other assets
Total assets
20
Thousands of
U.S. dollars
(Note 3)
Millions of yen
Liabilities and Shareholders’ Equity
2002
2001
2002
¥ 48,315
1,669
¥ 56,912
—
$ 362,589
12,525
10,197
40,184
12,386
47,612
76,525
301,568
Accrued expenses
Accrued income taxes (Note 8)
Deferred tax liabilities (Note 8)
Other current liabilities
50,381
4,536
709
40
26,232
59,998
4,677
6,146
41
23,503
378,094
34,041
5,321
300
196,863
Total current liabilities
131,886
151,279
989,764
41,075
30,678
66
2,635
40,753
21,193
138
4,630
308,255
230,229
495
19,775
74,455
66,715
558,762
5,606
2,105
42,071
53,229
38,088
30
48,363
(69)
(3,470)
(18)
53,229
38,088
30
53,087
(45)
(5,447)
(0)
399,467
285,839
225
362,949
(518)
(26,041)
(135)
Current Liabilities:
Short-term bank loans (Note 6)
Current portion of long term debt
Notes and accounts payable:
Notes
Accounts
Long-Term Liabilities:
Long-term debt (Note 6)
Retirement allowances
Deferred tax liabilities (Note 8)
Other long-term liabilities
Total long-term liabilities
Minority Interests in Consolidated Subsidiaries
Shareholders’ Equity:
Common stock, without par value:
Authorized – 1,173,014,000 shares;
issued – 626,510,820 shares in 2002 and 2001
Capital surplus
Revaluation difference
Retained earnings
Unrealized gain on marketable securities
Translation adjustments
Less treasury common stock, at cost
Total shareholders’ equity
136,153
138,942
1,021,786
¥348,102
¥359,041
$2,612,398
Contingent Liabilities (Note 13)
Total liabilities and shareholders’ equity
See accompanying notes to consolidated financial statements.
21
Consolidated Statements of Operations and Retained Earnings
Thousands of
U.S. dollars
(Note 3)
Millions of yen
Net Sales
Cost of Sales
Gross profit
Selling, General and Administrative Expenses (Note 9)
Operating income
Other Income (Expenses):
Interest and dividend income
Interest expense
Equity in earnings of affiliates
Restructuring charges
Gain on sales of marketable securities
Loss on revaluation of marketable securities
Provision for doubtful receivables
Other, net
Income Taxes: (Note 8)
Current
Deferred
Income before minority interests
Minority Interests
Net loss
Retained Earnings at Beginning of the Year
Adjustments for merger of consolidated subsidiaries
Adjustments for inclusion of certain subsidiaries
and affiliates in consolidation or the equity method
of accounting
Adjustments for exclusion from consolidation
of certain subsidiaries and affiliates
Cash dividends paid
Bonuses to directors
Staff and workers bonus and welfare fund
Net loss
Retained Earnings at End of the Year
2002
2001
2002
¥306,455
230,410
76,044
56,837
19,207
¥326,254
246,732
79,522
58,915
20,607
$2,299,850
1,729,156
570,687
426,544
144,143
454
(2,360)
(336)
(1,168)
521
(2,726)
(869)
(12,190)
(18,678)
529
525
(2,455)
419
(1,563)
99
(3,024)
(74)
(17,359)
(23,431)
(2,824)
3,407
(17,711)
(2,522)
(8,765)
3,910
(20,458)
(6,521)
(91,482)
(140,173)
3,970
2,911
(2,505)
124
(1,088)
(964)
8,916
(11,754)
14
(155)
(141)
21,846
(18,799)
931
(8,165)
(7,235)
53,087
1
57,630
—
398,402
8
—
(624)
—
—
(3,759)
(1)
(1)
(964)
¥ 48,363
12
(3,759)
(30)
—
(141)
¥ 53,087
Yen
2002
Amounts per Share:
Net loss
Diluted
Cash dividends
22
¥ (1.54)
—
6.00
—
(28,210)
(8)
(8)
(7,235)
$ 362,949
U.S. dollars
(Note 3)
2001
¥(0.22)
—
6.00
2002
$(0.01)
—
0.05
Consolidated Statements of Cash Flows
Thousands of
U.S. dollars
(NOte 3)
Millions of yen
2002
Operating Activities:
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization
Goodwill amortization
Gain on business transfers
Increase in retirement allowances
Provision for retirement benefits
Increase in allowance for doubtful accounts
Equity in losses of affiliates
Interest expense
Loss on disposal of property, plant and equipment
Gain on sales of investment securities
Loss on revaluation of marketable securities
Loss on sales of affiliate equities
Decrease (increase) in trade receivables
Decrease (increase) in inventories
(Decrease) increase in trade payables
Bonuses to directors
Other, net
Investing Activities:
Proceeds from business transfers
Proceeds from sales of property, plant and equipment
Purchases of property, plant and equipment
Purchases of investment securities
Proceeds from sales of investment securities
Increase in short-term loans receivable
Long-term loans advanced
Other, net
Financing Activities:
Proceeds from long-term loans
Increase in short-term loans
Repayment of long-term loans
Cash dividends paid
Proceeds from issue of shares to minority shareholders
Other, net
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
¥
529
2001
¥ (2,824)
2002
$
3,970
16,903
130
(2,152)
9,936
—
847
336
2,360
1,263
(501)
2,726
1,948
18,241
1,459
(10,182)
(2)
(12,157)
17,025
—
—
—
18,769
—
—
2,455
—
—
—
—
(5,828)
(2,655)
9,375
(32)
(7,673)
126,852
976
(16,150)
74,567
31,685
28,612
237,786
1,000
1,236
(18,122)
(1,422)
1,083
(1,007)
(50)
290
—
5,962
(12,959)
(2,238)
1,012
—
—
860
7,505
9,276
(136,000)
(10,672)
8,128
(7,557)
(375)
2,176
(16,991)
(7,361)
(127,512)
1,342
(6,207)
(5,413)
(4,490)
253
(19)
2,030
(11,288)
(6,835)
(3,822)
—
(128)
10,071
(46,582)
(40,623)
(33,696)
1,899
(143)
(14,534)
(20,044)
(109,073)
6,356
2,522
17,711
9,478
(3,760)
20,458
14,619
136,893
10,949
(76,413)
(15)
(91,235)
148
15
1,111
309
10,639
1,221
9,110
2,319
79,842
Cash and cash equivalents at end of year
¥10,948
¥10,331
$ 82,161
Supplemental Disclosures of Cash Flow Information:
Cash paid during the year for:
Interest
Income taxes
¥ 2,309
10,202
¥ 2,446
4,384
$ 17,328
76,563
Net increase in cash and cash equivalents
Beginning balance of cash and cash equivalents
23
Notes to Consolidated Financial Statements
1. Basis of Consolidated Financial Statements
The books and records of Mitsubishi Rayon Company,
Limited (the “Company”) and its domestic consolidated
subsidiaries are maintained in the manner and form
required or permitted under the Commercial Code of
Japan and Japanese accounting practices, including
special accounting dispositions stipulated in the
Corporation Tax Law of Japan. The books and records of
the overseas consolidated subsidiaries are maintained in
conformity with the accounting principles and relevant
legal requirements of their countries of domicile.
The accompanying consolidated financial statements
have been prepared from the accounts maintained by
Mitsubishi Rayon Company, Limited in accordance with
the provisions set forth in the Commercial Code and in
conformity with accounting principles and practices
generally accepted and applied in Japan, which may
differ in certain material respects from accounting
principles and practices generally accepted in countries
and jurisdictions other than Japan.
As permitted under the Securities and Exchange Law
of Japan, amounts of less than one million yen have
been omitted. As a result, the totals shown in the
accompanying financial statements (both in yen and in
U.S. dollars) do not necessarily agree with the sums of
the individual amounts.
Certain amounts previously reported have been
reclassified to conform to the current year’s presentation.
2. Summary of Significant Accounting Policies
(a) Consolidation
In accordance with the accounting standard for
consolidation issued by the Business Accounting
Deliberation Council of Japan, effective April 1, 1999, the
accompanying consolidated financial statements include
the accounts of the Company and all subsidiaries over
which substantial control is exerted through either
majority ownership of voting stock and/or by other
means. All significant intercompany balances and
transactions have been eliminated in consolidation.
Certain foreign subsidiaries are consolidated on the
basis of fiscal periods ending December 31, which differ
from that of the Company; however, the necessary
adjustments have been made if the effect of the
difference is material.
24
Investments in affiliates (companies over which the
Company has the ability to exercise significant influence)
are stated at cost plus equity in their undistributed
earnings or losses. Consolidated net income includes the
Company’s equity in the current net income or loss of
such companies, after the elimination of unrealized
intercompany profits.
All assets and liabilities of the subsidiaries are
revalued on acquisition, if applicable, and the excess of
cost over the equity in their underlying net assets at the
date of acquisition is amortized over a period of five
years on a straight-line basis if such excess is material, or
charged to income when incurred if immaterial.
(b) Cash equivalents
For purposes of the statements of cash flows, the
Company considers all highly liquid debt instruments with
a maturity of three months or less when purchased to be
cash equivalents.
(c) Inventories
Inventories are mainly stated at cost determined by the
average cost method.
(d) Property, plant and equipment
Tangible fixed assets:
1) Buildings (excluding building improvements)
Primarily by the straight-line method
2) Other tangible fixed assets
Primarily by the declining-balance method
The estimated useful lives for financial reporting
purposes are as follows:
Building and structures
8 - 50 years
Machinery, equipment and vehicles
4 - 15 years
Intangible fixed assets: By the straight-line method.
Costs for the development of software used internally
by the Company are amortized by the straight-line
method over the estimated useful life of the software
(five years).
(e) Securities
Until the year ended March 31, 2000, marketable equity
and debt securities and securities other than marketable
equity and debt securities were stated at cost by the
moving average method.
A new accounting standard for financial instruments,
which became effective April 1, 2000, requires that
securities be classified into three categories: trading,
held-to-maturity or other securities. Under the new
standard, trading securities are carried at fair value and
held-to-maturity securities are either amortized or
accumulated to face value. Other securities with quoted
market prices are carried at market value. The difference
between the acquisition cost and the carrying value of
other securities, including unrealized gain or loss, is
recognized as a component of shareholders’ equity
under “Unrealized gain on marketable securities.” The
cost of other securities sold is computed based on the
moving average method. Other securities without quoted
market prices are stated at cost by the moving average
method.
The effect of the adoption of the new standard for
financial instruments was to increase loss before income
taxes by ¥1,201 million for the year ended March 31,
2001 over the amount which would have been recorded
under the method applied in the previous year.
As of April 1, 2000, the Company reviewed the
classification of all its securities. Based on this
classification, any held-to-maturity securities with a
maturity of less than one year have been included in
current assets. All other securities have been included in
investment securities as non-current assets. As a result,
securities in current assets decreased by ¥5,745 million and
investment securities increased by ¥5,745 million at March
31, 2001
(f) Derivative financial instruments
Stated at fair value.
(g) Foreign currency translation
The revenue and expense accounts of the foreign
consolidated subsidiaries are translated at the rates of
exchange in effect at the balance sheet date, and except
for the components of shareholders’ equity, the balance
sheet accounts are also translated into yen at the rates of
exchange in effect at the balance sheet date. The
components of shareholders’ equity are translated at
their historical exchange rates. Translation adjustments
are presented as a component of shareholders’ equity
and minority interests in the accompanying consolidated
financial statements.
A revised accounting standard for foreign currency
translation became effective April 1, 2000. The effect of
25
the adoption of this revised standard on the consolidated
financial statements for the year ended March 31, 2001
was immaterial.
(h) Research and development expenses
Research and development expenses are charged to
operations as incurred.
(i) Retirement allowances
The Company’s employees are covered by an unfunded
retirement allowances plan and a funded defined benefit
pension plan.
Until the year ended March 31, 2000, the employees
retirement allowances plan provided for severance
benefits in the form of a lump-sum payment at the time
of termination of employment. The amount of the lumpsum payment was based on the basic rate of pay at
termination, years of service and certain other factors.
The liability for retirement allowances was stated at 40%
(the maximum amount allowable for income tax
purposes) of the amount which would be required to be
paid if all eligible employees terminated their
employment voluntarily at the balance sheet date.
Effective April 1, 2000, the Company and its domestic
consolidated subsidiaries adopted a new accounting
standard for retirement benefits, which requires the
Company and its domestic consolidated subsidiaries to
accrue employees’ severance and retirement benefits up
to a certain amount calculated based on the actuarially
determined retirement benefit obligation and the fair
value of the plan assets as adjusted for the unrecognized
net retirement benefit obligation at transition, the
unrecognized net actuarial gain or loss and the
unrecognized prior service cost. In order to improve the
funded status of the pension plan, the Company
contributed marketable securities in the amount of
¥14,275 million to the employees’ retirement benefit trust
during the year ended March 31, 2001. The difference
between the net retirement benefit obligation at
transition of ¥35,385 million and the market value at the
time of contribution of ¥14,275 million is being
amortized by the straight-line method over two years.
Actuarial gain or loss is amortized by the straight-line
method over a period (principally 5 years) which is less
than the average remaining years of service of the
employees. Prior service cost is primarily expensed as
incurred during each year.
In addition, directors and statutory auditors are
customarily entitled to lump-sum payments under an
unfunded retirement allowances plan. Provision for
retirement allowances for these officers is made at an
estimated amount.
(j) Leases
Noncancelable leases are accounted for as operating
leases (whether such leases are classified as operating
leases or finance leases) except that leases which
stipulate the transfer of ownership of the leased assets to
the lessee are accounted for as finance leases.
(k) Hedge accounting
1) Method of hedge accounting
Principally the deferred hedge accounting method is
applied.
Interest rate swaps which meet certain criteria are
excluded from the application of hedge accounting.
2) Financial instruments qualifying as hedges and the
related transactions, assets and liabilities are as follows:
Financial instrument
Transaction, assets and liabilities
Forward foreign exchange
contracts
Interest rate swaps
Future foreign exchange
transactions
Borrowings
3) Hedge policy
The risk exposure to movements in exchange rates and
interest rates is hedged in accordance with the
Company’s risk management policy.
(l) Amounts per share
The computation of basic net loss per share is based on
the weighted average number of shares of common
stock outstanding during each year. Diluted net loss per
share is computed based on the weighted average
number of shares of common stock outstanding each
year after giving effect to the dilutive potential of
common stock to be issued upon the conversion of
convertible bonds.
Cash dividends per share represent the cash dividends
declared as applicable to the respective years.
(m) Land revaluation
Pursuant to the “Law Concerning the Revaluation of
Land,” land used for the business operations of an
affiliate was revalued on December 31, 2000. The
revaluation of the land was based on the official
standard assessments in accordance with the relevant
regulations of the Corporate Income Tax Law of Japan
with certain necessary adjustments.
26
3. U.S. Dollar Amounts
The translation of yen amounts into U.S. dollar amounts is
included solely for convenience, as a matter of arithmetic
computation only, at ¥133.25=U.S.$1.00, the approximate
exchange rate in effect on March 31, 2002. The translation
should not be construed as a representation that yen have
been, could have been, or could in the future be, converted
into U.S. dollars at the above or any other rate.
4. Supplemental Cash Flow Information
The following table represents a reconciliation of cash
and cash equivalents as of March 31, 2002 and 2001:
March 31,
Millions of yen
2002
2001
Thousands of
U.S. dollars
2002
Cash
¥11,100 ¥10,449
Time deposits with maturities
of more than three months
(152)
(797)
Marketable securities with
maturities of three months
or less
—
679
$83,302
Cash and cash equivalents
$82,161
¥10,948
¥10,331
(1,141)
—
5. Securities and Investments
Information regarding marketable securities classified as
other securities as of March 31, 2002 and 2001 is as
follows:
a) Marketable other securities
March 31, 2002
Millions of yen
Acquisition Carrying Unrealized
costs
value
gain (loss)
Securities whose carrying value
exceeds their acquisition costs:
Stocks
¥ 7,692
Debt securities
—
Other
—
¥11,566
—
—
¥ 3,873
—
—
7,692
11,566
3,873
Securities whose acquisition costs
exceed their carrying value:
Stocks
17,302
Debt securities
—
Other
4
13,163
—
2
(4,139)
—
(1)
Subtotal
Subtotal
Total
17,306
13,165
(4,140)
¥24,999
¥24,732
¥ (267)
Thousands of U.S. dollars
costs
value
gain (loss)
March 31, 2002
Stocks
$ 57,726 $ 86,799 $ 29,066
Debt securities
—
—
—
Other
—
—
—
Subtotal
57,726
86,799
29,066
Stocks
129,846
Debt securities
—
Other
30
98,784
—
15
(31,062)
—
(8)
Subtotal
98,799
(31,069)
129,876
Total
$187,610 $185,606 $ (2,004)
March 31, 2001
Millions of yen
costs
value
gain (loss)
Stocks
¥ 8,243
Debt securities
—
Other
—
Subtotal
¥11,648
—
—
¥ 3,404
—
—
11,648
3,404
8,243
Stocks
Debt securities
Other
19,731
—
4
16,379
—
2
(3,352)
—
(1)
Subtotal
19,736
16,382
(3,353)
¥27,980
¥28,030
Total
¥
50
b) Sales of securities classified as other securities
amounted to ¥1,080 million ($8,105 thousand) with
aggregate gain and loss of ¥521 million ($3,910 thousand)
and ¥(19) million ($143 thousand), respectively, for the
year ended March 31, 2002.
c) Information regarding securities recorded at cost at
March 31, 2002 is as follows:
Held-to-maturity securities
Other
27
Millions of yen
Thousands of
U.S. dollars
¥3,000
3,488
$22,514
26,176
d) The redemption schedule for securities classified as
other securities at March 31, 2002 is summarized as
follows:
Thousands of
U.S. dollars
Millions of yen
Within 1 year
1 to 5 years
¥0
0
$0
0
6. Short-Term Bank Loans and Long-Term Debt
Short-term bank loans represent notes generally
maturing within 365 days at an interest rate of 1.72% per
annum as of March 31, 2002.
Long-term debt at March 31, 2002 and 2001 was as
follows:
Thousands of
U.S. dollars
Millions of yen
March 31,
2002
1.8% unsecured convertible
bonds in yen due 2003
¥ 1,669
2.4% unsecured bonds in yen
due 2005
10,000
2.025% unsecured bonds in
yen due 2003
10,000
1.95% unsecured bonds in
yen due 2004
10,000
Unsecured loans from banks
and insurance companies
14,330
Less current portion
5,999
(4,923)
¥41,075
2001
2002
¥ 1,669
$ 12,525
10,000
75,047
10,000
75,047
10,000
75,047
14,261
107,542
45,930
(5,177)
45,208
(36,946)
¥40,753
$308,255
The convertible bonds, unless previously redeemed, are
convertible into shares of common stock of the Company
at the option of the holders at the following conversion
price:
1.8% bonds
Conversion period
Conversion price
per share
Up to March 28, 2003
¥597.10
If all the convertible bonds outstanding at March 31,
2002 had been converted into shares of common stock,
2,795,176 new shares would have been issuable.
Under the provisions of these convertible bonds, the
conversion prices are subject to adjustment in certain
cases which include stock splits.
The aggregate annual maturities of long-term debt
subsequent to March 31, 2002 are summarized as
follows:
Year ending March 31,
Millions of yen
Thousands of
U.S. dollars
2003
2004
2005
2006
2007 and thereafter
¥ 4,923
15,554
12,797
12,590
132
$ 36,946
116,728
96,038
94,484
991
¥45,999
$345,208
7. Depreciation
Depreciation charged to income for the years ended
March 31, 2002 and 2001 was as follows:
Years ended March 31,
Millions of yen
2002
2001
¥16,537
¥16,898
Thousands of
U.S. dollars
2002
$124,105
8. Income Taxes
Income taxes applicable to the Company and its
domestic consolidated subsidiaries comprise corporation,
enterprise and inhabitants’ taxes, which, in the
aggregate, resulted in a statutory tax rate of
approximately 42% for both 2002 and 2001.
The effective tax rate reflected in the consolidated
statement of operations for the year ended March 31,
2002 differs from the statutory tax rate for the following
reasons:
Statutory tax rate
Permanent difference — dividend income
Different tax rates for certain consolidated subsidiaries
Elimination of losses deductible for tax purposes on the
devaluation of investments in affiliates accounted for
by the equity method
Equity in earnings of affiliated companies
Amortization of cost in excess of net assets acquired
Other
Effective tax rate
42.0%
55.6
(10.0)
(58.6)
26.7
10.3
10.4
76.5%
28
Significant components of the deferred tax assets and
liabilities held by the Company and its consolidated
subsidiaries as of March 31, 2002 were as follows:
March 31, 2002
Millions of yen
Deferred tax assets:
Accrued bonuses
¥ 1,133
Accrued enterprise tax
37
Employees’ retirement benefits
13,446
Tax loss carryforwards
192
Loss on revaluation of marketable
securities
1,700
Unrealized gain on intercompany
sales of fixed assets
1,143
Other
1,430
Total deferred tax assets
Deferred tax liabilities:
Tax reserve
Other
Total deferred tax liabilities
Net deferred tax assets
Thousands of
U.S. dollars
$
8,503
278
100,908
1,441
12,758
8,578
10,732
19,083
143,212
698
524
5,238
3,932
1,222
9,171
¥17,860
$134,034
9. Research and Development Expenses
Research and development expenses for the years ended
March 31, 2002 and 2001 were as follows:
Millions of yen
2002
2001
¥10,795
¥10,768
Thousands of
U.S. dollars
2002
$81,013
10. Pledged Assets
The assets pledged as collateral for long-term loans of
¥485 million ($3,640 thousand) and short-term loans of
¥1,963 million ($14,732 thousand) at March 31, 2002
were as follows:
March 31, 2002
Property, plant and equipment,
at net book value
Cash and time deposits
Other
Millions of yen
Thousands of
U.S. dollars
¥3,726
374
22
$27,962
2,807
165
¥4,124
$30,949
11. Retirement Benefit Plans
The Company and its domestic consolidated subsidiaries
have defined benefit plans, i.e., welfare pension fund
plans, tax-qualified pension plans and lump-sum
payment plans, covering substantially all employees who
are entitled to lump-sum or annuity payments, the
amounts of which are determined by reference to their
basic salary, length of service, and the conditions under
which termination occurs.
The following table sets forth the funded and accrued
status of the plans, and the amounts recognized in the
consolidated balance sheet at March 31, 2002 for the
Company’s and the consolidated subsidiaries’ defined
benefit plans:
March 31, 2002
Millions of yen
Thousands of
U.S. dollars
¥(73,077)
20,984
8,774
$(548,420)
157,478
65,846
(43,318)
(325,088)
—
13,340
—
—
100,113
—
(29,978)
—
(224,976)
—
¥(29,978)
$(224,976)
Retirement benefit obligation
Plan assets at fair value
Employees’ retirement benefit trust
Unfunded retirement benefit
obligation
Unrecognized net retirement
benefit obligation at transition
Unrecognized actuarial gain or loss
Unrecognized prior service cost
Net retirement benefit obligation
Prepaid pension cost
Accrued retirement benefits
12. Derivatives
The Company utilizes derivatives for the purpose of
hedging its exposure to adverse fluctuations in foreign
currency exchange rates and interest rates, but does not
enter into such transactions for speculative or trading
purposes.
The Company is exposed to credit risk in the event of
nonperformance by the counterparties to the derivative
transactions, but any such loss would not be material
because the Company enters into such transactions only
with financial institutions with high credit ratings. The
notional amounts of the derivatives do not necessarily
represent the amounts exchanged by the parties and,
therefore, are not a direct measure of the Company’s risk
exposure in connection with derivatives.
The disclosure of fair value information for derivatives
at March 31, 2002 has been omitted since all derivatives
have been accounted for as hedges.
13. Contingent Liabilities
The Company had the following contingent liabilities at
March 31, 2002:
March 31, 2002
As guarantor of bank loans of
unconsolidated subsidiaries and
affiliates
As guarantor of bank loans of others
The components of retirement benefit expenses for
the year ended March 31, 2002 are outlined as follows:
Millions of yen
Thousands of
U.S. dollars
Service cost
Interest cost
Expected return on plan assets
Amortization of net retirement
benefit obligation at transition
Amortization of actuarial
gain or loss
Prior service cost
¥ 2,020
2,262
(721)
$ 15,159
16,976
(5,411)
Total
¥13,879
Year ended March 31, 2002
10,339
77,591
954
(976)
7,159
(7,325)
March 31,
As of March 31, 2002
Domestic companies
Discount rate
Expected return on plan assets
29
primarily 3.0%
primarily 3.0%
Thousands of
U.S. dollars
¥ 811
1,489
$ 6,086
11,174
¥2,300
$17,261
14. Leases
The following pro forma amounts represent the
acquisition costs, accumulated depreciation and net book
value of leased property as of March 31, 2002 and 2001,
which would have been reflected as property, plant and
equipment in the balance sheets if finance lease
accounting had been applied to the finance leases
currently accounted for as operating leases:
$104,158
The assumptions used in accounting for the above
plans were as follows:
Millions of yen
Millions of yen
2002
2001
Thousands of
U.S. dollars
2002
Acquisition costs
Accumulated depreciation
¥2,729
1,753
¥3,427
2,242
$20,480
13,156
Net book value
¥ 975
¥1,184
$ 7,317
The pro forma depreciation portion of the lease
payments relating to finance lease transactions
accounted for as operating leases for the years ended
March 31, 2002 and 2001 amounted to ¥495 million
($3,715 thousand) and ¥625 million, respectively, which
were computed by the straight-line method over the
terms of the respective leased assets.
Future minimum lease payments (including the
interest portion) subsequent to March 31, 2002 for
finance lease transactions accounted for as operating
leases are summarized as follows:
Year ending March 31,
Millions of yen
Thousands of
U.S. dollars
2003
2004 and thereafter
¥404
571
$3,032
4,285
Total
¥975
$7,317
15. Litigation
In July 1999, a class action suit for damages was filed
against thirteen Japanese and U.S. companies including
the Company and its two U.S. subsidiaries by the carbon
fiber users in the U.S. market who alleged that the
companies had engaged in activities to maintain the
prices of carbon fiber by means of contracts on prices,
allocation of customers, etc. in violation of U.S. antitrust
laws. Management of the Mitsubishi Rayon Group
believes that the Company and its U.S. subsidiaries have
never violated U.S. antitrust laws and will present a
justifiable rebuttal to these charges and win the civil
case.
16. Subsequent Events
1) Dividends declared
The following appropriations of retained earnings,
which have not been reflected in the accompanying
consolidated financial statements for the year ended
March 31, 2002, were approved at a shareholders’
meeting held on June 27, 2002:
Year-end cash dividends of ¥3.00
($0.023) per share
Millions of yen
Thousands of
U.S. dollars
¥1,879
$4,101
2) Restructuring Plan of ABS resins operation
The following should be noted regarding the spin-off
of Mitsubishi Rayon’s ABS resins operation.
• Mitsubishi Rayon Co., Ltd. separated ABS resins
operation to UMG ABS Co., Ltd. which was set up
jointly with the Company, Ube Industries, Ltd. and
General Electric Company on April 1, 2002.
17. Segment Information
The Company and its consolidated subsidiaries are primarily engaged, mainly in Japan, in the manufacture and sale of
products in four major segments: the chemicals and plastics segment which includes methyl methacrylate resins, ABS
resins, and high performance chemicals, the man-made fibers segment which includes acrylic fiber, acetate fiber,
polyester filaments and carpets, the specialty products, engineering and other segment which includes carbon fiber and
composite materials, optical fibers, membranes, engineering and machinery systems for water treatment.
Effective from the year ended March 31, 2002, the Company has changed its segmentation to the following “Chemicals
and plastics,” and “Fibers,” “Specialty products, engineering and others” for reinforcement of consolidated business.
Therefore, engineering and selling businesses previously involved in the other segment are now reclassified as the
chemicals and plastics segment and the specialty products, engineering and other segment.
As net sales and total assets in Japan constituted more than 90% of the consolidated totals for the years ended March
31, 2001, the disclosure of geographical segment information was omitted.
30
The business segment information for the Company and its consolidated subsidiaries for the years ended March 31,
2002 and 2001 is summarized as follows:
I. Sales and operating income
Sales to third parties
Intergroup sales and transfers
Total sales
Operating expenses
Operating income
II. Assets, depreciation and capital expenditures
Total assets
Depreciation
Millions of yen
Specialty
products,
engineering
and others
Total
Chemicals and
plastics
Fibers
Eliminations
or corporate
Consolidated
¥123,272
11,981
¥96,997
189
¥ 86,184
25,207
¥306,455
37,377
¥
—
(37,377)
¥306,455
—
135,253
121,652
97,186
94,394
111,392
108,741
343,833
324,788
(37,377)
(37,541)
306,455
287,247
¥ 13,600
¥ 2,792
¥
2,650
¥ 19,044
¥
163
¥ 19,207
¥120,241
7,696
7,958
¥98,213
5,263
4,230
¥ 99,335
3,576
4,533
¥317,790
16,537
16,722
¥ 30,311
—
—
¥348,102
16,537
16,722
Millions of yen
Chemicals and
plastics
Total sales
Operating expenses
Operating income
Fibers
Specialty
products
Other
Total
¥133,136
20,311
¥101,926
236
¥34,665
606
¥56,526
22,982
¥326,254
44,135
¥
—
(44,135)
¥326,254
—
153,447
139,416
102,162
99,655
35,271
33,317
79,509
77,563
370,390
349,953
(44,135)
(44,306)
326,254
305,647
2,507
¥ 1,953
¥ 1,945
¥ 20,436
¥
170
¥ 20,607
¥103,982
5,736
4,455
¥41,009
3,213
2,796
¥48,635
463
563
¥319,587
16,898
14,866
¥ 39,454
—
—
¥359,041
16,898
14,866
¥ 14,030
Total assets
¥125,960
Depreciation
7,485
7,050
¥
Eliminations
or corporate Consolidated
Restated segment information for the year ended March 31, 2001 to confirm with the new segmentation was as
follows:
Total sales
Operating expenses
Operating income
Total assets
Depreciation
31
Millions of yen
Specialty
products,
engineering
and others
Total
Chemicals and
plastics
Fibers
¥135,828
20,341
¥101,926
236
¥ 88,499
23,344
156,169
141,832
102,162
99,655
111,844
108,251
¥ 14,337
¥
2,507
¥127,421
7,524
7,074
¥103,982
5,736
4,455
¥
Eliminations
or corporate
Consolidated
¥326,254
43,921
¥
—
(43,921)
¥326,254
—
370,176
349,738
(43,921)
(44,091)
326,254
305,647
3,592
¥ 20,437
¥
169
¥ 20,607
¥ 89,851
3,637
3,336
¥321,255
16,898
14,866
¥ 37,786
—
—
¥359,041
16,898
14,866
Specialty
products,
engineering
and others
Total
Chemicals and
plastics
$ 925,118
89,914
$727,932
1,418
$646,784
189,171
1,015,032
912,961
729,351
708,398
$ 102,064
Total assets
$ 902,371
Depreciation
57,756
59,722
Total sales
Operating expenses
Operating income
Eliminations
or corporate
Consolidated
$2,299,850
280,503
$
—
(280,503)
$2,299,850
—
835,962
816,068
2,580,360
2,437,433
(280,503)
(281,734)
2,299,850
2,155,700
$ 20,953
$ 19,887
$ 142,919
$
1,223
$ 144,143
$737,058
39,497
31,745
$745,478
26,837
34,019
$2,384,916
124,105
125,493
$ 227,475
—
—
$2,612,398
124,105
125,493
Fibers
The geographical segment information for the Company and its consolidated subsidiaries for the year ended March 31,
2002 is summarized as follows:
Millions of yen
United States
of America
Total
Eliminations
or corporate
Japan
Asia
Customers
Intersegment
¥275,514
8,066
¥14,341
6,050
¥16,599
319
¥306,455
14,437
Total sales
Operating expenses
283,580
266,577
20,392
17,988
16,918
16,849
320,892
301,415
¥ 17,003
¥ 2,403
¥
69
¥ 19,476
¥
¥265,688
¥21,994
¥12,063
¥299,746
¥ 48,355
Operating income
II. Total assets
United States
of America
Total
¥
—
(14,437)
¥306,455
—
(14,437)
(14,168)
306,455
287,247
(268)
Eliminations
or corporate
Japan
Asia
Customers
Intersegment
$2,067,647
60,533
$107,625
45,403
$124,570
2,394
$2,299,850
108,345
Total sales
Operating expenses
2,128,180
2,000,578
153,036
134,994
126,964
126,447
2,408,195
2,262,026
$ 127,602
$ 18,034
$
518
$ 146,161
$
$1,993,906
$165,058
$ 90,529
$2,249,501
$ 362,889
Operating income
II. Total assets
$
Consolidated
¥ 19,207
¥348,102
Consolidated
—
(108,345)
$2,299,850
—
(108,345)
(106,326)
2,299,850
2,155,700
(2,011)
$ 144,143
$2,612,398
Sales are analyzed geographically for the years ended March 31, 2002 and 2001 as follows:
Millions of yen
2002
2001
Sales designated for:
Japan
Asia
Other
Total
¥207,600
59,666
39,188
¥234,020
55,247
36,986
$1,557,974
447,775
294,094
¥306,455
¥326,254
$2,299,850
The sales for Asia and other comprise export sales and sales, excluding sales to Japan, generated by overseas
consolidated subsidiaries.
32
Thousands of
U.S. dollars
2002
Independent Auditors’ Report
The Board of Directors and the Shareholders
Mitsubishi Rayon Company, Limited
We have audited the consolidated balance sheets of Mitsubishi Rayon Company, Limited and
consolidated subsidiaries as of March 31, 2002 and 2001, and the related consolidated statements of
operations, changes in shareholders’ equity and cash flows for the years ended March 31, 2002, all
expressed in yen. Our audits were made in accordance with auditing standards, procedures and
practices generally accepted and applied in Japan and, accordingly, included such tests of the
accounting records and such other auditing procedures as we considered necessary in the
circumstances.
In our opinion, the accompanying consolidated financial statements, expressed in yen, present fairly
the consolidated financial position of Mitsubishi Rayon Company, Limited and consolidated
subsidiaries at March 31, 2002 and 2001, and the consolidated results of their operations and their
cash flows for the years ended March 31, 2002 in conformity with accounting principles and
practices generally accepted in Japan applied on a consistent basis.
As described in Note 2, Mitsubishi Rayon Company, Limited and consolidated subsidiaries have
adopted new accounting standards for financial instruments, retirement benefits, and foreign
currency translation in the preparation of their consolidated financial statements for the year ended
March 31, 2001.
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the
year ended March 31, 2002 are presented solely for convenience. Our audit also included the
translation of yen amounts into U.S. dollar amounts and, in our opinion, such translation has been
made on the basis described in Note 3.
June 27, 2002
See Note 1 which explains the basis of preparation of the consolidated financial statements of Mitsubishi Rayon Company, Limited under
Japanese accounting principles and practices.
33
Organization
Corporate Planning Division
Audit Office
Business Planning & Development Division
Overseas Subsidiaries Administration Office
Logistics & Information Systems Planning Office
Public & Investors Relations Office
Export Control Office
Chemicals Division
Chemicals & Plastics Operations
Specialty Resins & Plastics Division
Specialty Chemicals Division
Acrylic Fibers Division
Filament Yarn Division
President
Senior
Managing
Director
Mitsubishi Rayon Textile Co., Ltd.
Fibers Operations
Cigarette Tow Division
Industrial Textiles Division
Mitsubishi Burlington Co., Ltd.
Carbon Fiber & Composite Materials Division
Information Materials Division
Aqua-Life Division
Specialty Products &
Engineering Operations
Mitsubishi Rayon Engineering Co., Ltd.
Ryoko Co., Ltd.
Otake Production Center, Toyohashi Production Center, Toyama Production Center,
Yokohama Production Center
Osaka Branch, Nagoya Branch
Tokyo Technology & Information Center
Raw Materials Purchasing Department
Corporate Technology
Technology Development Administration Department,
Utilities Center, Production Technology Center,
Safety, Environment & Quality Assurance Department,
Intellectual Property Department, Corporate Research Laboratories,
Products Development Laboratories,
Chemicals Development Laboratories
Corporate Administration
Personnel Department, General Administration Department,
Accounting Department, Osaka General Administration Department
(As of June 27, 2002)
36
Corporate Data
Date of Establishment
The Mitsubishi Trust and Banking Corp.
Meiji Life Insurance Co.
Nippon Life Insurance Co.
Nippon Life Insurance Co.
(special account –- pension fund)
UFJ Trust Bank Ltd. (trust account A)
Mitsui Asset Trust and Banking Co., Ltd.
(as trustee for designated money trust)
Mitsubishi Heavy Industries, Ltd.
August 31, 1933
Paid-in Capital
¥53,229 million
Authorized Shares
1,173,014,000 shares
Issued and Outstanding Shares
626,510,820 shares
Employees
Share distribution by type of
shareholder
9,211 (Group)
Main Banks
The Bank of Tokyo-Mitsubishi, Ltd.
The Mitsubishi Trust and Banking Corp
The Norinchukin Bank
The Industrial Bank of Japan, Ltd.
Shareholders
92,145
(including those holding less than
one unit)
Financial institutions
54.3%
Securities companies
0.4%
Other companies, foundations, etc. 10.2%
Non-resident investors
6.7%
Individuals & others
28.4%
Major Shareholders
Japan Trustee Services Bank, Ltd.
(trust account)
The Bank of Tokyo-Mitsubishi, Ltd.
The Mitsubishi Trust and Banking Corp.
(trust account)
(As of March 31, 2002)
Offices
Head Office
(Public & Investors Relations Office)
6-41, Konan 1-chome, Minato-ku,
Tokyo 108-8506, Japan
Phone: (03) 5495-3100
Fax: (03) 5495-3184
E-mail: [email protected]
Osaka Branch
OAP Tower, 8-30,
Tenmabashi 1-chome,
Kita-ku, Osaka 530-6040, Japan
Phone: (06) 6881-6327
Fax: (06) 6881-6337
Nagoya Branch
Hokuriku Office
Otake Production Center
Toyohashi Production Center
Toyama Production Center
Yokohama Production Center
Corporate Research Laboratories
Products Development Laboratories
Chemicals Development Laboratories
Tokyo Technology & Information
Center
Overseas Service Bases
Mitsubishi Rayon America Inc.
Stock price range & trading volume
747 Third Avenue, 19th Floor,
New York, NY 10017
Phone: 1 (212) 223-3043
Fax: 1 (212) 223-3017
(¥)
500
MRC Asia (Thailand) Ltd.
400
100/63 Sathorn Nakorn Tower,
30th Floor, North Sathorn Road,
Khwaeng Silom, Khet Bangrak,
Bangkok 10500, Thailand
Phone: 66 (2) 636-7569
Fax: 66 (2) 636-7576
300
200
Quarterly volume
(Thousands of shares)
200,000
150,000
MRC Hong Kong Co., Ltd.
100,000
50,000
0
first second third fourth
first
99
00
01
02
Room 801, Tower 3,
China Hong Kong City,
33 Canton Road, Tsimshatsui,
Kowloon, Hong Kong
Phone: (852) 2368-0121
Fax: (852) 2724-4174
(As of June 27, 2002)
Please visit our Internet website at, http://www.mrc.co.jp/english/index.html
37
6-41, KONAN 1-CHOME, MINATO-KU, TOKYO
108-8506, JAPAN
Printed in Japan
This report is printed on recycled paper.
02083100(DJ)A

Annual Report 2002

Transcription

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