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Annual Report 2009
For the year ended March 31, 2009
Creativity That Surpasses World Standards

Table of contents

  • Page 1
    Creativity That Surpasses World Standards Annual Report 2009 For the year ended March 31, 2009

  • Page 2
    ... its corporate creed of "Creativity and Contribution." Utilizing unique ideas and highly sophisticated technologies to create something worthwhile where there was nothing before, Casio has endeavored to raise its enterprise value by developing and marketing original products that improve the quality...

  • Page 3
    ... from the President CASIO at a Glance Strategic Businesses 2 6 8 Digital Cameras Timepieces Cellular Phones Research and Development / Intellectual Property Corporate Governance Corporate Social Responsibility (CSR) Activities 8 10 12 13 14 16 Management's Discussion and Analysis Business Risks...

  • Page 4
    ... Ended March 2009 During the reporting term, we worked to achieve our management goals through vigorous measures to promote Casio's strategic businesses - digital cameras, timepieces, electronic dictionaries, and cell phones. Accompanying these efforts, we reformed the Company's business structure...

  • Page 5
    ... operating income was recorded despite the continued high profitability of strategic businesses such as timepieces and electronic dictionaries, and was primarily due to the deteriorating business environment for digital cameras from the second half of the fiscal year, as well as the depreciation in...

  • Page 6
    ... include the digital camera and cell phone businesses. In our efforts to more firmly establish the position of Casio's Stable Businesses and to overcome intense competition in the Expansive Businesses in order to generate stable earnings, we will develop new types of products that meet market needs...

  • Page 7
    ... of Casio, our corporate creed has been "Creativity and Contribution." Our mission is to pursue growth as a company, and to increase function, quality, economy, speed, productivity, ethics, safety, and compatibility with the environment in our products and services. In the months and years ahead...

  • Page 8
    CASIO at a Glance BUSINESS SEGMENT PRODUCT CATEGORY Electronics Sales (%) Electronics Consumer Principal Products System Equipment 7.8% Consumer 34.4% • Electronic Calculators • Electronic Dictionaries • Label Printers • Digital Cameras • Electronic Musical Instruments 89.2% Sales ...

  • Page 9
    ...the world-famous G-Shock and Baby-G, as well as Oceanus, a series of full-metal solar-powered radio-controlled watches. By incorporating cutting-edge technologies, we have differentiated our products from conventional watches by making them into wearable mobile terminals. In addition to cell phones...

  • Page 10
    ... the Exilim EX-S1 card-size camera, so thin that it could be carried anywhere. The wave of miniaturization that began with this product ushered in the second generation of digital cameras. Then, in 2008, we developed an entirely new type of digital camera, the EX-F1, featuring ultra-high-speed burst...

  • Page 11
    ... the world's first "Dynamic Photo" function enabling moving subjects to be cut and pasted onto still backgrounds or other images. At the same time, we promoted global marketing activities to raise awareness of this advanced functionality. To flourish in the digital camera market, where competition...

  • Page 12
    ... products incorporating the Multi Band 6 radio wave receiver system, and developed a new Tough Movement for solar-powered, radio-controlled timepieces. This device is incorporated in the established hit brand Oceanus (full-metal, high-end models) and the global brand G-Shock. We also launched global...

  • Page 13
    ... full development of the ladies' watch market, through expansion of product range. We also intend to carry out global promotions to underscore the strength of the Casio brand in timepieces. G-SHOCK MR-G Development of the Tough Movement, a high-performance ultra-thin radio solar movement combining...

  • Page 14
    ...aim to further expand our business in both Japan and overseas markets through development and launch of innovative new products. Developing proprietary products that are tough and waterproof In 2000, Casio introduced its C303CA cell phone for use with au service in Japan. Leveraging the proprietary...

  • Page 15
    ... to represent one-third of our total, particularly in the competitive intellectual property market of the United States. We are also actively pursuing intellectual property opportunities in the expanding Chinese market. Support for invention creation Patent Advisory Engineer System Techno Power...

  • Page 16
    ... and Board of Directors dismissal, discharge President and CEO and Directors oversight CSR Committee Subcommittees Accounting audit Election and discharge Accounting Auditor Accounting audit Oversight Board of Oversight Corporate Officers Corporate Officers Business divisions Group companies...

  • Page 17
    ... system CSR Committee Internal Audit Department Chief Risk Management Officer Risk Management Committee Risk Management Committee Secretariat Main risk management departments Risk management departments Staff function departments Casio Computer Co., Ltd., Group companies Annual Report 2009...

  • Page 18
    ..., we organize support activities for pioneering and creative next-generation research by younger researchers who may find it difficult to continuously fund their activities. Our subsidies cover a wide range of areas, from electronics and mechanical engineering to the natural sciences (health and...

  • Page 19
    Casio wins Award of the Kanto Bureau of Economy, Trade and Industry Director At the Hachioji R&D Center, we are not only concerned with the design and construction of energy-saving buildings and other nuts and bolts solutions, but also in less visible energy-use initiatives, such as promoting more ...

  • Page 20
    .... In cell phones, we introduced the Exilim series W63CA model for the au service and the SoftBank 930CA for Softbank Mobile Corp. Furthermore, sales of our toughness cell phone for Verizon Wireless of the United States were firm. In the System Equipment category, sales declined 10.9% year-on-year to...

  • Page 21
    ... in digital camera operations weighed heavily from the second half, when business conditions worsened and European currencies declined. Lower sales of TFT-LCDs also contributed to a fall in profitability. The operating income margin for the reporting term stood at 0.8%. The financial account balance...

  • Page 22
    Management's Discussion and Analysis Cash Flow Analysis Cash and cash equivalents at the reporting term-end came to ¥104,248 million, an increase of ¥16,291 million. Net cash provided by operating activities decreased by ¥48,288 million year-on-year to ¥23,461 million. This breaks down into ...

  • Page 23
    Business Risks The management performance, financial position and share price of Casio are subject to the following risks. We have prepared a list of items that might have an impact on the forecasts included in this report as of the consolidated reporting period ended March 2009. 1) Japan's economy...

  • Page 24
    ...management The Casio Group maintains personal information and confidential business information relating to the promotion and development of its business operations. There are in-house rules governing the use of this information, and each Group company raises awareness of the need for strict control...

  • Page 25
    Consolidated Six-Year Summary Years ended March 31 Casio Computer Co., Ltd. and Subsidiaries Millions of Yen 2009 2008 2007 2006 2005 2004 For the year: Net sales ...Cost of sales ...Selling, general and administrative expenses ...Research and development expenses ...Operating income ...Net income...

  • Page 26
    ... Balance Sheets Years ended March 31, 2009 and 2008 Casio Computer Co., Ltd. and Subsidiaries Millions of Yen Thousands of U.S. Dollars (Note 1) 2009 Assets Current assets: Cash and deposits (Note 4) ...Short-term investment securities (Note 6) ...Notes and accounts receivable: Trade ...Other...

  • Page 27
    ...(Note 8) ...Notes and accounts payable: Trade ...Other...Accrued expenses ...Income taxes payable (Note 9) ...Other (Note 8) ...Total current liabilities ... 2009 2008... stock ...Total shareholders' equity ...Valuation and translation adjustments Valuation difference on available-for-sale securities...

  • Page 28
    ...Operations Years ended March 31, 2009 and 2008 Casio Computer Co., Ltd. and Subsidiaries Millions of Yen 2009 2008 Thousands of U.S. Dollars (Note 1) 2009 Net sales (Note 14) ...Costs and expenses (Note 14): Cost of sales ...Selling, general and administrative expenses ...Research and development...

  • Page 29
    ... of Changes in Net Assets Years ended March 31, 2009 and 2008 Casio Computer Co., Ltd. and Subsidiaries Balance at March 31, 2007...Net income ...Dividends from surplus (Â¥23.00 per share) ...Purchase of treasury stock...Disposal of treasury stock...Transfer from retained earnings to capital...

  • Page 30
    Consolidated Statements of Cash Flows Years ended March 31, 2009 and 2008 Casio Computer Co., Ltd. and Subsidiaries Millions of Yen 2009 2008 Thousands of U.S. Dollars (Note 1) 2009 Net cash provided by (used in) operating activities: Income (loss) before income taxes and minority interests......

  • Page 31
    ..., is not presented in the accompanying consolidated financial statements. The translation of the Japanese yen amounts into U.S. dollars is included solely for the convenience of readers outside Japan, using the prevailing exchange rate at March 31, 2009, which was ¥98 to U.S.$1. The convenience...

  • Page 32
    ... using the weighted-average method. As discussed in Note 3. (3), effective April 1, 2008, the Company and its consolidated subsidiaries in Japan adopted the new accounting standard for measurement of inventories and stated the inventories at the lower of cost or net realizable values at year-end...

  • Page 33
    ... expense, net of income taxes, is eliminated. Cash dividends per share represent the actual amount applicable to the respective years. Reclassifications Certain reclassifications have been made in the 2008 consolidated financial statements to conform to the 2009 presentation. Annual Report 2009 31

  • Page 34
    ... year ended March 31, 2009, the Company and its consolidated subsidiaries in Japan accounted for finance leases which do not transfer ownership of the leased property to the lessee as operating leases with disclosure of certain "as if capitalized" information in a note to the consolidated financial...

  • Page 35
    ...stated for the reporting fiscal year amounted to ¥7,040 million ($71,837 thousand) and ¥7,334 million ($74,837 thousand), respectively. 5. Inventories Inventories at March 31, 2009 and 2008 consisted of the following: Millions of Yen 2009 2008 Thousands of U.S. Dollars 2009 Finished goods ...Work...

  • Page 36
    ... of Yen 2009 2008 Commercial paper ...Unlisted equity securities ...Unlisted bonds ...Total ... ¥37,149 2,202 - ¥39,351 ¥25,684 2,950 - ¥28,634 $379,072 22,469 - $401,541 Thousands of U.S. Dollars 2009 (3) Available-for-sale securities sold in the year ended March 31, 2009 and 2008 were as...

  • Page 37
    .... The Group utilizes derivatives following the internal regulation for derivatives, which stipulates policy, objective, scope, organization, procedures and financial institutions to deal with, and has a reporting system for derivative transactions reflecting proper internal control functions. Fair...

  • Page 38
    Notes to Consolidated Financial Statements Years ended March 31, 2009 and 2008 Casio Computer Co., Ltd. and Subsidiaries 8. Short-term Loans Payable and Long-term Debt Short-term loans payable represent unsecured bank loans and its average interest rates were 1.0% and 1.3% per annum at March 31, ...

  • Page 39
    ... rate of 40.7% for calculation of deferred income tax assets and liabilities at March 31, 2008. The following table summarizes the significant differences between statutory tax rate and the Group's tax rate for financial statement purposes for the years ended March 31, 2008: 2008 Statutory tax rate...

  • Page 40
    ... Assets Under the Japanese Corporation Law ("the Law") and regulations, the entire amount paid for new shares is required to be designated as capital stock. However, a company may, by a resolution of the Board of Directors, designate an amount not exceeding one-half of the price of the new shares as...

  • Page 41
    ...of outstanding future noncancellable lease payments due at March 31, 2009 and 2008 were as follows: Millions of Yen 2009 2008 Thousands of U.S. Dollars 2009 Future lease payments: Due within one year ...Due over one year ...Total ... ¥58 5 ¥63 ¥113 55 ¥168 $592 51 $643 Annual Report 2009 39

  • Page 42
    ... and sales, profit management and related assets. 2. Major products in each business segment: (1) Electronics: Electronic calculators, Label printers, Electronic dictionaries, Digital cameras, Electronic musical instruments, Digital watches, Analog watches, Clocks, Cellular phones, Handy...

  • Page 43
    ... The main countries and the areas which belong to each segment except for Japan were as follows: (1) Americas...U.S.A., Canada, Mexico, Brazil (2) Europe ...U.K., Germany, France, Spain, Netherlands, Norway, Russia, Italy (3) Asia ...Taiwan, Hong Kong, South Korea, Singapore, China, India, Indonesia...

  • Page 44
    ...main countries and the areas which belong to each segment were as follows: (1) North America ...U.S.A., Canada (2) Europe ...U.K., Germany, France (3) Asia ...Hong Kong, Singapore, China, South Korea, Taiwan 3. The above overseas net sales represent net sales made outside Japan by the parent company...

  • Page 45
    ... as follows: Use Type of assets Location Production facilities used in the Electronic Components business Idle assets Machinery and equipment, lease assets, goodwill, accrued lease payments Buildings and structures Nankoku City, Kochi Pref. Ome City, Tokyo Fussa City, Tokyo The Company and its...

  • Page 46
    Notes to Consolidated Financial Statements Years ended March 31, 2009 and 2008 Casio Computer Co., Ltd. and Subsidiaries 2. Accounting procedures applied to intra-group transactions Casio Micronics Co., Ltd. made into a wholly-owned subsidiary of the Company through share exchange (1) Name of the ...

  • Page 47
    ..., 2009 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 1 to the consolidated financial statements. Tokyo, Japan June 26, 2009 Annual Report 2009...

  • Page 48
    ... Mobile Communications Co., Ltd. Development, design, and production of cellular phones •Casio Techno Co., Ltd. Customer service for Casio products •Casio Information Systems Co., Ltd. Sales of system equipment •CXD NEXT Co., Ltd. Electronic settlements and support services for retail stores...

  • Page 49
    ...) 639-5111 Overseas Offices Casio America, Inc. 570 Mt. Pleasant Avenue, Dover, New Jersey 07801, United States Tel: 973-361-5400 Casio Europe GmbH Casio-Platz 1 22848 Norderstedt, Germany Tel: 040-528-65-0 Investor Information (As of March 31, 2009) Stock Exchange Listings Tokyo Transfer Agent The...

  • Page 50
    CASIO COMPUTER CO., LTD. 6-2, Hon-machi 1-chome, Shibuya-ku, Tokyo 151-8543, Japan http://world.casio.com/ Printed in Japan