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Annual Report 2010
For the year ended March 31, 2010
Technology
Next Stage
for the

Table of contents

  • Page 1
    Technology for the Next Stage Annual Report 2010 For the year ended March 31, 2010

  • Page 2
    ...released. Casio's first electronic dictionary released. Casio's first electronic musical instruments, Casio Tone electronic keyboards released. Enters timepiece market with the release of Casiotron, a digital wristwatch. Casio Mini, the world's first personal electronic calculator, released. Casio...

  • Page 3
    ... from the President Priorities for the current fiscal year 2 6 Digital Cameras Timepieces Electronic Dictionaries The Digital Art Frame CASIO at a Glance Corporate Governance Corporate Social Responsibility (CSR) Activities 6 7 8 9 10 12 14 Management's Discussion and Analysis Business Risks...

  • Page 4
    Message from the President Kazuo Kashio, President & CEO 2 CASIO COMPUTER CO., LTD.

  • Page 5
    ...the cell phone business, Casio released a total of seven new models, including the Exilim keitai CA003 for au, which is equipped with a variety of digital camera functions including high-speed burst shooting and the Dynamic Photo function. Also newly released was the G'zOne ROCK, a waterproof, shock...

  • Page 6
    ... building up sales in the Chinese market by launching color models and expanding the target market. 2. Creating New Strategic Businesses In the past, Casio has drawn on unique ideas and advanced technology to bring the world a range of exciting new products. To achieve steady growth in the future...

  • Page 7
    ...for employees, Casio is striving to improve corporate governance and compliance by ensuring that all employees and officers understand and comply with laws and regulations, maintain social order, and contribute to society. Kazuo Kashio, President & CEO July 2010 their support. Annual Report 2010 5

  • Page 8
    .... In the future, we aim to expand our share in overseas markets, particularly Europe and China, through a marketing strategy that focuses on deepening customer understanding of these products by proposing new ways of using them. An example is the EX-FS10S, a digital camera in the Exilim range...

  • Page 9
    ... ahead, we aim to expand our lineup of women's wristwatches based on this module, and build our share of the women's timepiece market. Meanwhile, in 2009, we organized "Shock the World Tour" to further strengthen the G-Shock brand, taking in 19 cities in 11 countries including New York, Paris and...

  • Page 10
    ... and develop new marketing channels for electronic dictionaries at educational institutions where they are needed, prior to launching a drive to develop overseas markets. In the future, we will introduce color models in the highly promising Chinese market and broaden the range of target markets, to...

  • Page 11
    ... to use family photos to make your own homemade clocks and calendars, by combining the Dynamic Photo and snapshot-to-painting conversion functions on the Digital Art Frame and images from a Casio digital camera with high-speed burst shooting. We plan to launch further new products that develop the...

  • Page 12
    ... l Clocks Mobile Network Solutions (MNS) Principal Products l Cellular Phones l Handy Terminals System Equipment Principal Products l Electronic Cash Registers (including POS) l Office Computers l Page Printers l Data Projectors Electronic Components and Others Sales (Year ended March 31, 2010...

  • Page 13
    ... Calculators l Electronic Dictionaries l Label Printers l Digital Cameras l Electronic Musical Instruments l Digital Watches l Analog Watches l Clocks l Cellular Phones* System Equipment Principal Products l Electronic Cash Registers (including POS) l Office Computers l Page Printers l Data...

  • Page 14
    ... President and CEO and Directors oversight CSR Committee Subcommittees Accounting audit Election and discharge Accounting Auditor Accounting audit Internal audit Internal Audit Department Oversight Board of Oversight Corporate Officers Corporate Officers Business divisions Group companies Audit...

  • Page 15
    ... 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 2010...

  • Page 16
    ... the list of 500 Japanese companies, 31 companies including us were selected. Casio Donates Graphing Calculators to Chicago's Public Schools Casio America, Inc. donated 5,000 graphing calculators to 20 Chicago public schools. While graphing calculators are used in America's high school mathematics...

  • Page 17
    ... while striving to promote greater cooperation between the company and employees, and will make ever greater efforts in the area of social contribution activities. Support for "Dolphin & Whale Eco-Research Network" In 1994, we began selling "G-Shock" and "Baby-G" watch models in co-sponsorship...

  • Page 18
    ...including the Exilim keitai CA003 for the au service, equipped with a variety of digital camera functions such as high-speed burst-shooting and Dynamic Photo function, and the rugged G'zOne ROCK cell phone, for Verizon Wireless in the United States. This business struggled in the Japanese market and...

  • Page 19
    ...953 million operating loss, due mainly to sharply reduced revenues in the cell phone business. By contrast, timepieces and electronic dictionaries remained earnings drivers, and digital cameras saw steady improvement in profitability from the second half. The Electronic Components and Others segment...

  • Page 20
    ...million, due partly to increased working capital. Net cash used in investing activities amounted to ¥14,997 million, ¥29,711 million less than the outflows of the previous year. This was chiefly attributable to proceeds from redemption of investment securities outweighing purchases, creating a net...

  • Page 21
    ... position and share price of The Company 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 2010. 1) Japan's economy and the global economy The Group's products...

  • Page 22
    ... the future. 10) Risks related to information management The 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...

  • Page 23
    ... the year ended March 31, 2007, the Company and its consolidated subsidiaries adopted the new accounting standard, "Accounting Standard for Presentation of Net Assets in the Balance Sheet" (Statement No. 5 issued by the Accounting Standards Board of Japan on December 9, 2005), and the implementation...

  • Page 24
    ... depreciation ...Net property, plant and equipment ...(148,880) 71,657 38,733 63,770 110,240 983 6,023 219,749 (145,063) 74,686 416,150 684,129 1,153,613 7,290 110,183 2,371,365 (1,600,860) 770,505 Investments and other assets: Software ...Stock of affiliates ...Investment securities (Notes 6 and...

  • Page 25
    ... (3,612) 193,810 522,495 706,494 599,054 (37,839) 1,790,204 Capital surplus ...Retained earnings ...Treasury stock ...Total shareholders' equity ...Valuation and translation adjustments Valuation difference on available-for-sale securities ...Deferred gains or losses on hedges ...Foreign currency...

  • Page 26
    ... March 31, 2010 and 2009 Casio Computer Co., Ltd. and Subsidiaries Millions of Yen 2010 2009 Thousands of U.S. Dollars (Note 1) 2010 Net sales (Note 14) ...Costs and expenses (Note 14): Cost of sales ...Selling, general and administrative expenses ...Research and development expenses ... ¥427...

  • Page 27
    Consolidated Statements of Changes in Net Assets Years ended March 31, 2010 and 2009 Casio Computer Co., Ltd. and Subsidiaries Shares of common stock Balance at March 31, 2008...Effect of changes in accounting policies applied to foreign subsidiaries...Dividends from surplus (Â¥33.00 per share) ......

  • Page 28
    ... plant and equipment ...Proceeds from sales of property, plant and equipment ...Purchase of intangible assets ...Purchase of investment securities ...Proceeds from sales and redemption of investment securities ...Purchase of stocks of subsidiaries and affiliates ...Proceeds from transfer of business...

  • Page 29
    ... of readers outside Japan, using the prevailing exchange rate at March 31, 2010, which was ¥93 to U.S.$1. The convenience translation should not be construed as representation that the Japanese yen amounts have been, could have been, or could in the future be, converted into U.S. dollars at...

  • Page 30
    ... consolidated balance sheets. (Additional information) The Company has shortened the useful lives of metal molds and other manufacturing equipment as well as software used in our cell phone business to respond to the rapid shrinkage of cell phone markets and intensified competition. Accordingly, the...

  • Page 31
    ... Welfare, for release from the obligation of paying benefits for employees' prior services relating to the substitutional portion of the Welfare Pension Insurance Scheme. Concurrently, the employees' pension fund plan was changed to defined benefit corporate pension fund plan. The Company and some...

  • Page 32
    ... New accounting standards for retirement benefits Effective from the year ended March 31, 2010, the Company and consolidated subsidiaries in Japan adopted ASBJ Statement No. 19, "Partial Amendments to Accounting Standard for Retirement Benefits (Part 3)" issued by Accounting Standards Board of Japan...

  • Page 33
    ... for the year ended March 31, 2010 required pursuant to the revised accounting standards is as follows: (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...

  • Page 34
    ...highly secure and highly-rated bonds and include shares in 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. Notes and accounts payable-trade and accounts...

  • Page 35
    ... if a new loan is made. Derivative transactions See Note 8 "Derivative transactions." Note 2: Financial instruments of which fair value is difficult to estimate Millions of Yen 2010 Book value Thousands of U.S. Dollars 2010 Book value Unlisted shares... ¥3,190 $34,301 The market price of the...

  • Page 36
    ... 2010 and 2009 Casio Computer Co., Ltd. and Subsidiaries (b) Available-for-sale securities Securities with book values exceeding acquisition costs: Millions of Yen 2010 2009 Acquisition Acquisition Book value cost Difference Book value cost Difference Thousands of U.S. Dollars 2010 Acquisition Book...

  • Page 37
    ... See notes below: Note 2 "Significant Accounting Policies" Note 6 "Fair Value of Financial Instruments" (1) Qualitative information on financial instruments 2) Details of financial instruments used, risks, and policies and systems for risk management Fair value of derivative transactions The...

  • Page 38
    ... one year Fair value Thousands of U.S. Dollars 2010 Contract amount Due after Total one year Fair value Hedge accounting method Type Main hedged item Interest rate swaps: Long-term loans Receive fix/ payable, etc. Pay float Interest rate swaps: Interest rate swap subject Long-term loans Receive...

  • Page 39
    ... benefits ...Inventories ...Property, plant and equipment ...Accrued expenses (bonuses to employees) ...Other ...Gross deferred tax assets ...Valuation allowance...Total deferred tax assets ...Deferred tax liabilities: Unrealized holding gain ...Valuation difference on available-for-sale securities...

  • Page 40
    ... rate and the rate of expected return on plan assets used by the Group are 2.5% and 3.0% respectively in both 2010 and 2009. 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...

  • Page 41
    ... 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 42
    ...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 terminals, Electronic cash registers (including POS), Office computers...

  • Page 43
    ... 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, Thailand 3. The Brazilian subsidiary, Casio Brasil Comercio...

  • 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
    ... the transaction purpose 1) Name of company subject to intra-group transaction Casio Micronics Co., Ltd. 2) Lines of business Research, development, manufacture and sale of electronics components (2) Legal form Share exchange with the purpose of making Casio Micronics a wholly-owned subsidiary of...

  • Page 47
    ... jointly developed by the Company and Toppan Printing, the two companies decided that the collaboration would be the best for the small and medium-size display business. 4) Date of spin-off April 1, 2010 Summary of accounting procedures 1) Transfer of gain (loss) Not applicable 2) Proper book-value...

  • Page 48
    .... The new company boasts a highly competitive range of products that merges the advanced technologies and product development capabilities of each company. Furthermore, combination of NEC's IT/Network technology supported by product development capabilities linked to service business for enterprises...

  • Page 49
    ..., 2010 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 29, 2010 Annual Report 2010...

  • Page 50
    ... Sales of Casio products Asia •Casio Computer (Hong Kong) Ltd. Hong Kong Production of electronic calculators and LCDs •Casio Taiwan Co., Ltd. Taiwan Sales of Casio products •Casio Singapore Pte., Ltd. Singapore Production of electronic components and sales of Casio products •Casio India...

  • Page 51
    ...-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, F.R. Germany Tel: 040-528-65-0 Investor Information (As of March 31, 2010) Stock Exchange Listings Tokyo Transfer Agent The...

  • Page 52
    CASIO COMPUTER CO., LTD. 6-2, Hon-machi 1-chome, Shibuya-ku, Tokyo 151-8543, Japan http://world.casio.com/ Printed in Japan