Casio 2015 Annual Report Download - page 27

Financial Section
Management
Foundation Corporate Data
Annual Report 2015 CONTENTS / 4226
Prole To Our Stakeholders Casio's Strength Special Features Financial Highlights
Notes to Consolidated Financial Statements
4. Inventories
Millions of Yen
Thousands of
U.S. Dollars
(Note 1)
2015 2014 2015
Finished goods ........................................................................... ¥41,064 ¥35,469 $342,200
Work in process ......................................................................... 7,258 5,314 60,483
Raw materials and supplies......................................................... 7,629 7,320 63,575
Total ....................................................................................... ¥55,951 ¥48,103 $466,258
5. Fair Value of Financial Instruments
(1) Qualitative information on financial instruments
1) Policies for using financial instruments
The Group invests surplus funds in highly secure financial assets, and funds required for working capital and
capital investments are raised through the issuance of bonds or loans from financial institutions such as
banks. Derivatives are used to avoid the risks described hereinafter and no speculative transactions are
entered into.
2) Details of financial instruments used and risks involved, and how they are managed
Notes and accounts receivable-trade are exposed to customers’ credit risk. To minimize that risk, the Group
periodically monitors the due date and the balance of the accounts.
Securities and investment securities are primarily highly secure and highly-rated debt securities and shares
of companies with which the Group has business relations, and are exposed to market price fluctuation risk.
The Group periodically monitors the market price and reviews the status of these holdings.
Operating payables comprising notes and accounts payable-trade and accounts payable-other have a due
date of within one year.
Operating payables, loans payable, and bonds are subject to liquidity risk (the risk of an inability to pay by
the due date). However, the Group manages liquidity risk by maintaining short-term liquidity in excess of a
certain level of consolidated sales or by other means.
The Group uses derivative transactions of forward foreign currency contracts to hedge currency fluctuation
risks arising from assets and liabilities denominated in foreign currencies, as well as interest rate swap
contracts to fix the cash flows associated with loans payable. The Group utilizes and manages derivative
transactions following the internal regulations for them, which stipulate policy, objective, scope, organization,
procedures and financial institutions to deal with, and has an implementation and reporting system for
derivative transactions reflecting proper internal control functions.
3) Supplemental information on fair values
The fair value of financial instruments is calculated based on quoted market price or, in case where there is no
market price, by making a reasonable estimation. Because the preconditions applied include a floating
element, estimation of fair value may vary. The contract amounts, as presented in Note 7 “Derivative
Transactions,” do not reflect market risk.
(2) Fair values of financial instruments
The following table summarizes book value and fair value of the financial instruments, and the difference
between them as of March 31, 2015 and 2014. Items for which fair value is difficult to estimate are not
included in the following table (see (Note) 2 on P 28).
Millions of Yen
For 2015 Book value Fair value Difference
Assets
[1] Cash and deposits ..................................................................... ¥ 82,806 ¥ 82,806 ¥ —
[2] Notes and accounts receivable-trade .......................................... 45,869 45,869 —
[3] Securities and investment securities
a. Held-to-maturity debt securities ............................................. 9,000 9,000 —
b. Available-for-sale securities .................................................... 62,753 62,753 —
Total assets .......................................................................... ¥200,428 ¥200,428 ¥ —
Liabilities
[1] Notes and accounts payable-trade ............................................. ¥ 35,135 ¥ 35,135 ¥ —
[2] Accounts payable-other ............................................................. 23,843 23,843 —
[3] Bonds with subscription rights to shares ..................................... 10,043 11,974 1,931
[4] Long-term loans payable ............................................................ 67,000 67,198 198
Total liabilities ........................................................................ ¥136,021 ¥138,150 ¥2,129
Derivative transactions* .................................................................. ¥ 152 ¥ 152 ¥ —