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Annual Report 2008
For the year ended March 31, 2008

Table of contents

  • Page 1
    Annual Report 2008 For the year ended March 31, 2008

  • Page 2
    ... expand sales globally. Contents Consolidated Financial Highlights Message from the President Casio at a Glance Strategic Businesses Highlights of the Year Research and Development / Intellectual Property Corporate Governance Corporate Social Responsibility (CSR) Activities Management's Discussion...

  • Page 3
    ...Subsidiaries Millions of Yen 2008 2007 Thousands of U.S. Dollars* 2008 For the year: Net sales ...Operating income ...Net income ...Capital investment ...Depreciation ...Research and development expenses ...At year-end: Net assets** ...Total assets ...Amounts per share of common stock (in yen and...

  • Page 4
    ... Through the launch of new models in the radio-controlled watch, electronic dictionary, and cell phone lines we raised the value-added of our products, while higher productivity was realized thanks to improved efficiency in R&D and general business operations. These 2 CASIO COMPUTER CO., LTD.

  • Page 5
    ... was down by 51.5% year-on-year, at ¥12.1 billion, owing to the impact of extraordinary losses on the transfer to Hitachi Cable, Ltd. of the Film Device Business of Casio Micronics Co., Ltd. For the reporting term, we plan to pay an ordinary dividend of ¥23 per share, unchanged from the previous...

  • Page 6
    ... plans to strengthen our marketing overseas in all business fields, so as to expand our share of the world market and realize higher profitability through greater economies of scale. Creating New Strategic Businesses In its 50-year history, Casio has brought to market many products that were the...

  • Page 7
    ... are committed to conducting corporate social responsibility (CSR) activities. Under the Charter of Creativity for Casio, which expressly sets out action guidelines for employees, the Company is taking a number of initiatives. We ensure that every one of our employees and directors is fully aware of...

  • Page 8
    ... Dictionaries • Label Printers • Digital Cameras • Electronic Musical Instruments 84.5% Sales and Operating Income (Billions of yen) 600 60 50 40 30 20 10 Timepieces Principal Products Mobile Network Solutions (MNS) 26.6% Timepieces 13.9% 500 400 300 200 100 0 06 07 08 Sales (left scale...

  • Page 9
    ... dictionaries, to a wide range of calculators for business and educational uses, label printers, as well as electronic musical instruments that can be enjoyed even by beginners. In the Timepieces Category we have a variety of brands such as the world-famous G-Shock and Baby-G, as well as Oceanus...

  • Page 10
    ... and electronic dictionaries are our core earnings generators, enjoying significant market shares and strong brand recognition. Meanwhile, our digital camera and cell phone businesses have excellent potential for future expansion. Casio plans to develop its business aggressively not only in Japan...

  • Page 11
    ... Oceanus We launched a number of new high-end radio-controlled watches on the market during the reporting period. Especially popular were models in the Oceanus series - our flagship-brand full-metal analog watches - and those in the G-Shock global brand series. New, more sophisticated models...

  • Page 12
    ... makers need to make optimum use of unique proprietary technologies so as to bring to market products that can draw in customers. During the reporting period, Casio launched a number of new cell phone models embodying the toughness, clear moving images, and high-quality camera features for which its...

  • Page 13
    ... reporting period, Casio came up with yet another new function to add to its digital cameras - the world's first model to offer 60 high-quality still pictures per second as well as high-speed moving image performance. This model, the Exilim Pro EX-F1, was put on the market at the end of March 2008...

  • Page 14
    ... are both touch screens operated with a stylus, making them easier to operate than ever before. Casio is also working to develop markets for its electronic dictionaries overseas. In August 2007 we entered the Electronic dictionary research center established in China In April 2008, we set up the...

  • Page 15
    ... provision of electronic settlements (utilizing the iDTM mobile credit-card platform or magnetic stripe credit cards), as well as a sales data management service that enables retailers to monitor shop sales on a website and to easily transfer sales data to cell phones. CXD NEXT'S new system is much...

  • Page 16
    ... as stable earnings drivers (3) Supplying commercially viable next-generation products and services that can respond to changing social, business-environment and consumer trends. Intellectual Property Initiatives Intellectual property is an important management resource enabling Casio to continue...

  • Page 17
    ... by setting up a system aimed primarily at ensuring reliable financial reporting centered on the Company's Accounting Department, Information System Department, CSR Operations Section, and Internal Audit Department. Compliance and Risk Management At Casio, the actions of all staff are controlled by...

  • Page 18
    ... for imitation by other plants, office buildings and commercial facilities. Casio has replaced various types of equipment at its head office building with more energy-saving models, and all staff working at the building wear cool clothing in the summer to allow air-conditioning thermostats to be...

  • Page 19
    ... the history of Casio. With the help of staff, children assemble calculators and participate in environmental education programs. The Hachioji Research & Development Center is one of the most environmentally friendly of all facilities operated by the Casio Group, and children visiting the Center can...

  • Page 20
    ...the previous year, to ¥86,922 million. This is largely attributable to good sales of radio-controlled watches, led by our Oceanus brand, sales of which were boosted by the launch of new high-end models capable of receiving standard frequency broadcasts from five stations worldwide (two in Japan and...

  • Page 21
    ...of new value-added items, including radio-controlled watches, electronic dictionaries, and cell phones, as well as improved efficiency in product development and operational methods, and steps taken to increase productivity. The operating margin for the reporting term was 6.1%. The financial account...

  • Page 22
    ... Total assets as of the end of March 2008 stood at ¥451,835 million, representing a decline of 14.0% from the previous term-end. Current assets declined by ¥45,526 million to ¥284,610 million, largely as a result of a decrease in trade receivables. The value of noncurrent assets decreased by...

  • 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 2008. 1) Japan's economy...

  • Page 24
    ... strategies, or operating environment might have a negative impact on the Casio Group's business, financial position and earnings performance. 12) Risks arising from fluctuations in foreign exchange rates and interest rates The Casio Group maintains operations in numerous countries around the world...

  • Page 25
    Consolidated Six-Year Summary Years ended March 31 Casio Computer Co., Ltd. and Subsidiaries Millions of Yen 2008 2007 2006 2005 2004 2003 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, 2008 and 2007 Casio Computer Co., Ltd. and Subsidiaries Millions of Yen Thousands of U.S. Dollars (Note 1) 2008 Assets Current assets: Cash and time deposits (Note 3) ...Marketable securities (Note 5) ...Notes and accounts receivable: Trade ...Other...

  • Page 27
    ... Long-term liabilities: Long-term debt due after one year (Note 7) ...Employees' severance and retirement benefits (Note 9) ...Retirement benefits for directors and corporate auditors (Note 10)...Deferred tax liabilities (Note 8) ...Other long-term liabilities ...Total long-term liabilities ...20...

  • Page 28
    ... Years ended March 31, 2008 and 2007 Casio Computer Co., Ltd. and Subsidiaries Millions of Yen 2008 2007 Thousands of U.S. Dollars (Note 1) 2008 Net sales (Note 13) ...Costs and expenses (Note 13): Cost of sales ...Selling, general and administrative expenses ...Research and development expenses...

  • Page 29
    ... share)...Acquisitions of treasury stock ...Sales of treasury stock ...Transfer from retained earnings to additional paid-in capital for merger of consolidated subsidiaries ...Net changes other than owners' equity ...Balance at March 31, 2008 ...See accompanying notes. $485,920 485,920 Thousands...

  • Page 30
    ...2007 Casio Computer Co., Ltd. and Subsidiaries Millions of Yen 2008 2007 Thousands of U.S. Dollars (Note 1) 2008 Cash flows from operating activities: Income before income taxes and minority interests ...Depreciation (including software) ...Loss (Gain) on disposal and sales of property, plant and...

  • Page 31
    ... for trading securities (hereafter, "available-for-sale securities") for which market value is readily determinable are stated at market value as of the end of the period with unrealized gains and losses, net of applicable deferred tax assets or liabilities, not reflected in earnings but directly...

  • Page 32
    ... value). Property, plant and equipment Property, plant and equipment is stated at cost. Depreciation is principally determined by the declining-balance method at rates based on estimated useful lives except for the following buildings. The building of the head office of the Company and buildings...

  • Page 33
    ... Yen 2008 2007 Thousands of U.S. Dollars 2008 Finished products ...Work in process ...Materials and supplies...Total ...5. Securities ¥33,218 9,251 13,474 ¥55,943 ¥39,471 7,626 18,760 ¥65,857 $332,180 92,510 134,740 $559,430 (1) The following tables summarize acquisition costs, book values...

  • Page 34
    ... 31, 2008 and 2007. (a) Book value of held-to-maturity debt securities Millions of Yen 2008 2007 Thousands of U.S. Dollars 2008 Certificates of deposit ...(b) Book value of available-for-sale securities ¥9,850 ¥5,130 $98,500 Thousands of U.S. Dollars 2008 Millions of Yen 2008 2007 Commercial...

  • Page 35
    ... any credit risks. 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...

  • Page 36
    ...209,500 Thousands of U.S. Dollars The annual maturities of long-term debt at March 31, 2008 were as follows: Year ending March 31 Millions of Yen 2009...2010...2011...2012... ¥26,500 10,500 450 10,000 $265,000 105,000 4,500 100,000 Thousands of U.S. Dollars 2008 The line of credit with the main...

  • Page 37
    ... rate and the rate of expected return on plan assets used by the Company are 2.5% and 3.0% in both 2008 and 2007. The estimated amount of all retirement benefits to be paid at the future retirement date is allocated equally to each service year using the estimated number of total service years...

  • Page 38
    ... fiscal years ending after that date. Under Japanese laws and regulations, the entire amount paid for new shares is required to be designated as common 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...

  • Page 39
    ... 2. Major products in each business segment: (1) Electronics: Electronic calculators, Electronic dictionaries, Label printers, Digital cameras, Electronic musical instruments, Digital watches, Analog watches, Clocks, Cellular phones, Handy terminals, Electronic cash registers (including POS), Office...

  • Page 40
    ...The main countries and the areas which belong to each segment except for Japan were as follows: (1) North America...U.S.A., Canada, Mexico (2) Europe ...U.K., Germany, France, Spain, Netherlands, Norway (3) Asia...Taiwan, Hong Kong, South Korea, Malaysia, Singapore, China, India, Indonesia, Thailand...

  • Page 41
    ... 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 42
    ... Registered trading name: Film Device Business Development Preparation Co., Ltd. Paid-in capital: ¥250,000 ($2,500) Number of employees: 375 as of June 1, 2008 Nature of business: 1) Research, development, manufacturing and marketing of electronic parts for computers, electronic system equipment...

  • Page 43
    ...: Manufacturing and marketing of electrical wire and cable, IT network systems, wireless systems, compound semiconductors, materials for semiconductor sealants, wrought copper products, automotive components, etc. (6) Schedule for share transfer: Date of transfer of shares: June 1, 2008 (7) Value of...

  • Page 44
    ...: ¥976 ($9.76) (par value portion) (11) Details of collateral: None (12) Use of funds The funds raised through the business transfer will be principally applied to strengthening the earnings capabilities of the Company's Electronics segment through research and development as well as investment in...

  • Page 45
    ... of the Film Device Business occurred on June 1, 2008, and Casio Micronics transferred all shares in the new entity to Hitachi Cable. (2) As discussed in Note 17 to the consolidated financial statements, a meeting of the Board of Directors of the Company held on May 16, 2008 approved a capital...

  • Page 46
    ... 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 utilizing Casio's electronic cash...

  • Page 47
    ... 31, 2008) Established: June 1957 Paid-in Capital: ¥48,592 million Employees: 13,202 Home Page Address: http://world.casio.com/ Domestic Offices Head Office 6-2, Hon-machi 1-chome, Shibuya-ku, Tokyo 151-8543 Accounting Department Tel: (03) 5334-4852 R&D Centers Hamura Research & Development Center...

  • Page 48
    CASIO COMPUTER CO., LTD. 6-2, Hon-machi 1-chome, Shibuya-ku, Tokyo 151-8543, Japan http://world.casio.com/ Printed in Japan