It is my pleasure to greet you in delivering our annual report for the year ended March 2012. I would like to review our performance for the past fiscal year and discuss our capital structure policy.
In the year ended March 2012, our performance was impacted by bad weather, strike action at our Australian coking coal operations and flooding in Thailand. Nevertheless, net income was ¥453.8 billion, meaning we achieved our ¥450.0 billion forecast. This achievement was largely due to the Energy Business, Chemicals and Living Essentials groups posting record earnings. The Energy Business Group benefited from high crude oil prices. The Chemicals and Living Essentials groups saw past investments generate results. I believe that our performance demonstrates the strengths of our balanced portfolio of resource and non-resource businesses.
Our basic capital structure policy is to sustain growth and maximize corporate value by balancing earnings growth, capital efficiency and financial soundness.
In the year ended March 2012, we made substantial investments totaling approximately ¥1,300.0 billion. We continued to use diverse fund procurement channels to fund these investments. For instance, we borrowed from banks, issued bonds and established a Renminbi-denominated commercial paper program. At the same time, total shareholders' equity at March 31, 2012 was a record ¥3,509.3 billion, despite the negative impacts of the yen's appreciation and falling share prices. This ¥276.0 billion year-on-year increase was because of an increase in retained earnings thanks to the net income result. As a result, the net debt-to-equity ratio, which is an indicator of financial soundness, was 1.0 at March 31, 2012. We thus maintained it at around the same level as March 31, 2011.
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Over the past 2 fiscal years, including the first year of Midterm Corporate Strategy 2012, we have made substantial investments amounting to approximately ¥1,700.0 billion, with the aim of generating future growth. While free cash flows in the year ended March 2012 were negative ¥550.2 billion, we expect to see an improvement from the year ending March 2013 as we reap the benefits of our past investments.
The year ending March 2013 is the final year of Midterm Corporate Strategy 2012. As CFO of Mitsubishi Corporation, my aim is to continue to further buttress our financial base, which will support our ability to create sustainable corporate value.