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ANNUAL฀REPORT฀2005
For฀the฀year฀ended฀March฀31,฀2005

Table of contents

  • Page 1
    ANNUAL฀REPORT฀2005 For฀the฀year฀ended฀March฀31,฀2005

  • Page 2
    ...31,฀2005,฀Casio฀strongly฀promoted฀and฀developed฀its฀strategic฀ businesses,฀which฀are฀timepieces,฀digital฀cameras,฀electronic฀dictionaries,฀cellular฀phones,฀ and฀TFT฀LCDs,฀in฀pursuit฀of฀management฀targets.฀At฀the฀same฀time,฀the฀Company...

  • Page 3
    ...฀the฀year 17.00 15.00 0.16 *U.S.฀dollar฀amounts฀have฀been฀translated฀from฀Japanese฀yen฀at฀the฀rate฀of฀¥107฀to฀U.S.$1,฀the฀approximate฀exchange฀rate฀prevailing฀on฀March฀31,฀2005. Net฀Sales (Millions฀of฀yen) 600,000 500,000 400,000 300,000...

  • Page 4
    ... the Term under Review In฀this฀environment,฀the฀Casio฀Group฀has฀ been฀strongly฀promoting฀and฀developing฀its฀ strategic฀businesses,฀which฀are฀timepieces,฀ digital฀cameras,฀electronic฀dictionaries,฀ cellular฀phones,฀and฀TFT฀LCDs,฀in฀pursuit฀of...

  • Page 5
    ...฀equipment •฀Others 600 500 400 300 200 100 0 (Billions฀of฀yen) 12 10 8 6 4 2 0 Expansive฀Businesses •฀Digital฀cameras •฀Cellular฀phones •฀Electronic฀components 04 05 Operating฀Income฀Margin Text฀in฀blue฀=฀strategic฀businesses 5.3% Net฀sales...

  • Page 6
    ...฀is฀to฀pursue฀ Shareholders'฀equity฀ratio (right฀scale) growth฀as฀a฀company,฀increase฀corporate฀ 05 0.5 03 04 25 value,฀and฀remain฀attractive฀for฀all฀investors฀ and฀customers฀by฀creating฀a฀high-standard฀ 4 CASIO฀COMPUTER฀CO.,฀LTD.

  • Page 7
    ...to achieve further growth and improve profitability Casio฀is฀positioning฀its฀timepieces฀and฀electronic฀dictionaries฀as฀core฀stable฀businesses฀ that฀are฀expected฀to฀generate฀sustainable฀earnings,฀given฀their฀high฀market฀shares฀and฀ brand฀power.฀We...

  • Page 8
    ...฀term฀ended฀ March฀2005.฀This฀is฀largely฀the฀result฀of฀a฀strategy฀targeting฀market฀expansion฀for฀our฀ high-value-added฀solar-powered฀radio-controlled฀watches.฀We฀increased฀our฀sales฀of฀this฀ product฀not฀only฀in฀Japan฀but฀also฀in...

  • Page 9
    ...the฀market฀for฀electronic฀dictionaries฀in฀Japan฀in฀2004฀ was฀3.35฀million฀units.฀Although฀the฀market฀scale฀is฀expected฀to฀remain฀almost฀ unchanged฀in฀2005,฀the฀Company฀predicts฀sales฀of฀high-end฀(high-performance,฀ high-priced)฀models...

  • Page 10
    ...฀Casio฀products฀were฀ranked฀among฀ the฀top฀group฀in฀terms฀of฀Japanese฀market฀share฀taken฀on฀an฀average฀for฀the฀year.฀In฀March฀ 2005,฀we฀launched฀the฀Exilim฀EX-Z750,฀with฀a฀large฀2.5-inch฀LCD฀for฀shooting฀and฀viewing฀ high...

  • Page 11
    ...from฀high-end฀models฀to฀middle-of-the-range฀models. Browse฀standard฀ Internet฀websites฀on฀the฀ large฀screen.฀Casio฀finds฀ new,฀fun฀ways฀to฀enjoy฀ your฀cellular฀phone.฀ (Model฀W21CA) TFT฀LCDs In฀recent฀years,฀small-sized฀TFT฀LCD฀panels...

  • Page 12
    ...฀of฀yen) 500 400 50 40 30 20 10 System฀Equipment Sales (%) 80.1% 300 200 100 0 ฀฀Principal฀Products 8.8% 03 04 05 0 •฀Electronic฀Cash฀Registers฀(including฀POS) •฀Office฀Computers •฀Page฀Printers •฀Data฀Projectors Sales฀(left฀scale) Operating...

  • Page 13
    ...lives,฀Casio's฀broad฀product฀lineup฀ranges฀from฀ popular฀digital฀cameras฀and฀electronic฀dictionaries฀that฀boast฀the฀ top฀share฀in฀the฀Japanese฀market,฀to฀a฀wide฀range฀of฀calculators฀for฀ business฀and฀educational฀uses,฀label฀printers...

  • Page 14
    ...฀an฀ordinary฀rechargeable฀lithium฀battery,฀but฀has฀a฀lifetime฀ about฀four฀times฀as฀long. ฀ Casio's฀fuel฀cell฀battery฀utilizes฀a฀reformer฀module฀to฀efficiently฀produce฀high-purity฀hydrogen฀ from฀methanol.฀The฀Company฀has฀succeeded฀in...

  • Page 15
    ...merely฀by฀raising฀the฀GWS-900฀watch฀to฀the฀readers฀ that฀have฀been฀installed฀at฀gasoline฀service฀stations.฀ ฀ Casio฀will฀continue฀to฀develop฀new฀mobile฀data฀processing฀features฀for฀watches฀to฀afford฀greater฀ convenience฀to฀wearers...

  • Page 16
    ...secure฀place.฀In฀the฀case฀of฀outsourcing,฀the฀ Companies฀rendering฀services฀are฀obliged฀to฀take฀preventive฀measures฀against฀data฀leakages,฀ and฀must฀sign฀confidentiality฀agreements.฀ Casio's฀CSR฀Oversight฀Organization Board฀of฀Directors...

  • Page 17
    ...฀local฀community. A฀large฀radio-controlled฀clock฀at฀ Gomenmachi฀Station,฀in฀Kochi฀Prefecture.฀฀ The฀clock฀was฀donated฀by฀Casio฀Computer฀ Co.,฀Ltd.฀and฀Kochi฀Casio฀Co.,฀Ltd. PUBLICATION฀OF฀A฀CSR฀REPORT The฀Company฀has฀published฀an...

  • Page 18
    ... expansion to South Korea and other markets. In the Timepieces Category, sales fell 2.4% to ¥68,473 million. The market for solarpowered radio-controlled watches, however, steadily expanded, primarily in Japan and North America. Profits improved significantly due to changes to the product mix to...

  • Page 19
    ...products - digital cameras, electronic dictionaries and cellular phones. Sales in North America declined 8.8% to ¥46,698 million, which accounted for 8.3% of net sales. Sales in Europe rose 9.8% to ¥74,796 million, accounting for 13.4% of net sales. Sales in Asia and other regions, excluding Japan...

  • Page 20
    ..., Casio invested ¥10,323 million, up 11.0%, in the Electronics Segment, and ¥7,184 million, up 6.7%, in the Electronic Components and Others Segment. The remaining capital investment, made by Company as a whole, cannot be accounted for by business segment. RESEARCH & DEVELOPMENT R&D expenses...

  • Page 21
    ... net income ...Cash dividends applicable to the year ...Performance indicators: Return on equity (%) ...Return on assets (%) ...Shareholders' equity ratio (%) ...Interest coverage (times) ...Assets turnover (times) ...Inventories turnover (months) ...Other: Number of employees... ¥559,006 398,186...

  • Page 22
    ...assets: Cash and time deposits (Note 3) ...Marketable securities (Note 5) ...Notes and accounts receivable: ...Notes receivable-trade ...Accounts receivable-trade...Accounts receivable-other ...Allowance for doubtful accounts ...Inventories (Note 4)...Deferred tax assets (Note 8) ...Short-term loans...

  • Page 23
    ... shares ...Additional paid-in capital ...Retained earnings ...Net unrealized holding gains on securities ...Foreign currency translation adjustments...Treasury stock, at cost...Total shareholders' equity ...Â¥ Millions of Yen 2005 2004 Thousands of U.S. Dollars (Note 1) 2005 641 39,655 20,017 67...

  • Page 24
    ...., Ltd. and Subsidiaries Millions of Yen 2005 2004 Thousands of U.S. Dollars (Note 1) 2005 Net sales (Note 13)...Costs and expenses (Note 13): Cost of sales ...Selling, general and administrative expenses ...Research and development expenses ...Operating income (Note 13) ...Other income (expenses...

  • Page 25
    ...Loss on sale of treasury stock...Increase in net unrealized holding gains on securities ...Decrease in foreign currency translation adjustments ...Increase in treasury stock-net ...Balance at March 31, 2005 ... $388,308 388,308 $537,607 - - - (9) - - - - $537,598 Thousands of U.S. Dollars (Note...

  • Page 26
    ...treasury stock...Proceeds from sales of treasury stock ...Payments for cash dividends ...Other ...Net cash used in financing activities ...Effect of exchange rate changes on cash and cash equivalents ...Net increase in cash and cash equivalents ...Cash and cash equivalents at beginning of year (Note...

  • Page 27
    ... of readers outside Japan, using the prevailing exchange rate at March 31, 2005, which was ¥107 to U.S.$1. The convenience translations should not be construed as representations that the Japanese yen amounts have been, could have been, or could in the future be converted into U.S. dollars at...

  • Page 28
    ... to severance payments based on compensation at the time of severance and years of service. Employees' severance and retirement benefits of the Company and some of its consolidated subsidiaries are covered by two kinds of pension plans which are employees' pension fund plan and tax-qualified pension...

  • Page 29
    ... of Yen 2005 2004 Thousands of U.S. Dollars 2005 Cash and time deposits ...Time deposits over three months ...Marketable securities within three months...Short-term loans receivable with resale agreement ...Cash and cash equivalents ...4. INVENTORIES Inventories at March 31, 2005 and 2004 consisted...

  • Page 30
    ... tables summarize book values of securities with no available fair values at March 31, 2005 and 2004. (a) Book value of held-to-maturity debt securities Millions of Yen 2005 2004 Thousands of U.S. Dollars 2005 Certificates of deposit...(b) Book value of available-for-sale securities ¥6,500...

  • Page 31
    ...production and the overseas procurement of materials. The derivative transactions are solely made with highly rated financial institutions; therefore, the Group does not expect any credit risks. The Group utilizes derivatives following the internal regulation for derivatives, which stipulates policy...

  • Page 32
    ... 31, 2005 were as follows: Year ending March 31 Millions of Yen Thousands of U.S. Dollars 2006 ...2007 ...2008 ...2009 ...2010 ...Thereafter ... ¥39,655 20,705 32,000 25,500 10,500 25,450 $370,607 193,505 299,065 238,318 98,131 237,850 Thousands of U.S. Dollars 2005 The line of credit with the...

  • Page 33
    ... the years ended March 31, 2005 and 2004 are employees' severance and retirement benefit expenses comprised of the following: Millions of Yen 2005 2004 Thousands of U.S. Dollars 2005 Service cost-benefits earned during the year...Interest cost on projected benefit obligation ...Expected return on...

  • Page 34
    ... of outstanding future lease payments due at March 31, 2005 and 2004 were as follows: Millions of Yen 2005 2004 Thousands of U.S. Dollars 2005 Future lease payments: Due within one year ...Due over one year ...Total... ¥161 170 ¥331 ¥ 57 89 ¥146 $1,505 1,589 $3,094 32 CASIO COMPUTER CO...

  • Page 35
    ... consisted of cash and time deposits, marketable securities, investments in securities and administrative assets of the parent company, which amounted to ¥147,145 million ($1,375,187 thousand) and ¥145,722 million for the years ended March 31, 2005 and 2004, respectively. ANNUAL REPORT 2005 33

  • Page 36
    ... were as follows: (1) North America ...U.S.A., Canada (2) Europe...U.K., Germany, France (3) Asia ...Hong Kong, Singapore, China, South Korea 3. The above overseas net sales represent net sales made outside Japan by the parent company and consolidated subsidiaries. 34 CASIO COMPUTER CO., LTD.

  • Page 37
    ...a price below the market price. By special resolution at the 47th annual shareholders' meeting held on June 27, 2003, the Company introduced a stock option plan in accordance with Article 280-20, 21 of the Commercial Code in Japan, and granted stock purchase rights at advantageous terms to directors...

  • Page 38
    ... reader. We have recomputed the translation and, in our opinion, the consolidated financial statements expressed in Japanese yen have been translated into United States dollars on the basis set forth in Note 1 to the consolidated financial statements. Tokyo, Japan June 29, 2005 36 CASIO COMPUTER...

  • Page 39
    ... OFFICES Casio, Inc. 570 Mt. Pleasant Avenue, Dover, New Jersey 07801, United States Tel: 973-361-5400 Casio Europe GmbH Bornbarch 10, 22848 Norderstedt, Germany Tel: 040-528-65-0 6-2, Hon-machi 1-chome, Shibuya-ku, Tokyo 151-8543 Accounting Department Tel: (03) 5334-4852 ANNUAL REPORT 2005...

  • Page 40
    ... Number of Shareholders 32,522 Principal Shareholders Shareholdings (thousands) Outstanding voting share Year Month High Low 2004 2005 The Master Trust Bank of Japan, Ltd. (Trust Account) Japan Trustee Services Bank, Ltd. (Trust Account) Nippon Life Insurance Company Casio Bros. Corp. Japan...

  • Page 41
    CASIO COMPUTER CO., LTD. 6-2,฀Hon-machi฀1-chome,฀Shibuya-ku,฀Tokyo฀151-8543,฀Japan http://world.casio.com/ Printed฀in฀Japan฀on฀recycled฀paper