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Annual Report 2011
For the year ended March 31, 2011
Creating limitless enjoyment withCreating limitless enjoyment with
Digital ArtDigital Art

Table of contents

  • Page 1
    t r A l a t i g i D t with n e m y o j n e s s e l t i m Creating li Annual Report 2011 For the year ended March 31, 2011

  • Page 2
    ...is uniquely positioned to deliver. Products with innovative functions assist people in their daily lives and keep society moving forward. They also bring great delight to many people and help to revitalize culture. When even a single new product is widely adopted, whole new markets develop, and this...

  • Page 3
    Contents To Our Stakeholders ...2 Imaging Square Q&A ...4 CASIO at a Glance ...7 Business Review ...8 Corporate Governance ...10 Corporate Social Responsibility (CSR) Activities ...12 Management's Discussion and Analysis ...14 Business Risks ...15 Consolidated Six-Year Summary ...17 Consolidated ...

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

  • Page 5
    ...word series, the electronic dictionary business maintained the overwhelming top share in the Japanese market, and sales also expanded in China. The digital camera business developed and released high value-added products, which included the EX-ZR100 featuring Casio's HDR-ART function, which makes it...

  • Page 6
    Imaging Square Q&A In January 2011, Casio launched Imaging Square, a new online service where users can enjoy digital photo art. The person responsible for developing this service gives an overview. Digital Art ment with y jo en ss le it m li g Creatin http://art.casio.com Q A .01 Could you ...

  • Page 7
    ... it seem to dance to the music. Imaging Square is an online service that lets users convert photos they have taken with a digital camera or cell phone into original artworks. You can create artistic images simply by manipulating the photos you have uploaded to the Imaging Square website. Up to now...

  • Page 8
    ... and trade your creations. You can also connect up on social networking sites, where we plan to make it even easier for you to talk with other artists about their own works of art and comment on the works of fellow artists. Imaging Square makes art part of your life and everyday fun. Casio will...

  • Page 9
    CASIO at a Glance Segment Overview Consumer Sales (Year ended March 31, 2011) Principal Products l฀Watches l฀Clocks l฀Electronic Dictionaries l฀Electronic Calculators l฀Label Printers l฀Electronic Musical Instruments l฀Digital Cameras etc. 69.7% System Equipment Sales (Year ended ...

  • Page 10
    ...In our new Smart Access system for analog watches, the hour, minute, and second hands are driven independently, thus avoiding mutual interference when switching modes and enabling quick operation. Additionally, the electronic crown switch lets the user easily switch between the various functions. As...

  • Page 11
    ...spot in the Japanese market by unit sales for seven straight years, and we aim to keep the top market share through continuous product evolution. Our electronic dictionaries are popular among a wide range of customers thanks to our extensive lineup of specialized dictionaries with software contents...

  • Page 12
    ... 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 Internal audit Internal Audit Department 10 CASIO COMPUTER...

  • Page 13
    ... 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 2011...

  • Page 14
    ...-offered bonds, which are offered for sale via a securities company for the general public, privately-placed bonds are corporate bonds sold to a small number of specifically chosen investors. Participation in Ecocap Movement From fiscal 2008, Casio Techno Co., Ltd. and Casio Information Systems...

  • Page 15
    ...to local communities. Casio Electronic Technology (Zhongshan) Co., Ltd. Casio Computer Hamura R&D Center Kofu Casio Co., Ltd. Support for "Dolphin & Whale Eco-Research Network" In 1994, we began selling "G-SHOCK" and "Baby-G" watch models in co-sponsorship with the 4th International Dolphin & Whale...

  • Page 16
    ... market. Sales in China also increased. In the digital camera category, Casio developed and launched high value-added products such as the EX-ZR100, which incorporates an HDR ART function that makes it easy to take beautiful, artistic photos, as well as the EX-TR100, which offers photo shooting...

  • Page 17
    Business Risks The management performance, financial 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 2011. 1) Japan's ...

  • Page 18
    ... 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 of such information in its employee...

  • Page 19
    ...Six-Year Summary Years ended March 31 Casio Computer Co., Ltd. and Subsidiaries Millions of Yen 2011 2010 2009 2008 2007 2006 For the year: Net sales ...Cost of sales ...Selling, general and administrative expenses ...Research and development expenses ...Operating income (loss) ...Net income (loss...

  • Page 20
    ...Sheets March 31, 2011 and 2010 Casio Computer Co., Ltd. and Subsidiaries Millions of Yen Thousands of U.S. Dollars (Note 1) 2011 Assets Current assets: Cash and deposits (Notes 4 and 6) ...Short-term investment securities (Notes 4, 6 and 7)...Notes and accounts receivable: Trade (Note 6) ...Other...

  • Page 21
    ... bonds and long-term loans payable (Note 9) ...Notes and accounts payable: Trade (Note 6) ...Other (Note 6) ...Accrued expenses ...Income taxes payable (Note 10) ...Other ...Total current liabilities ... 2011 2010 ¥ 14,800 10,000 ¥ 15,846 450 $ 178,313 120,482 51,688 20,180 11,894 2,900 6,424...

  • Page 22
    ... of Operations Years ended March 31, 2011 and 2010 Casio Computer Co., Ltd. and Subsidiaries Millions of Yen 2011 2010 Thousands of U.S. Dollars (Note 1) 2011 Net sales (Note 14) ...Costs and expenses (Note 14): Cost of sales ...Selling, general and administrative expenses ...Research and...

  • Page 23
    ...-for-sale securities ...Deferred gains or losses on hedges ...Foreign currency translation adjustment ...Share of other comprehensive income of associates accounted for using equity method ...Total other comprehensive income... ¥4,435 214 (296) 0 ¥4,353 See accompanying notes. Annual Report 2011...

  • Page 24
    ... Years ended March 31, 2011 and 2010 Casio Computer Co., Ltd. and Subsidiaries Shares of common stock Balance at March 31, 2009...Dividends from surplus (Â¥15.00 per share) ...Net loss...Purchase of treasury stock...Disposal of treasury stock...Transfer from retained earnings to additional paid-in...

  • Page 25
    ... Cash Flows Years ended March 31, 2011 and 2010 Casio Computer Co., Ltd. and Subsidiaries Millions of Yen 2011 2010 Thousands of U.S. Dollars (Note 1) 2011 Net cash provided by (used in) operating activities: Income (loss) before income taxes and minority interests...Depreciation and amortization...

  • Page 26
    ..., 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, 2011, which was ¥83 to U.S.$1. The convenience...

  • Page 27
    ... of market or cost. 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...

  • Page 28
    ... 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 of its consolidated subsidiaries in Japan...

  • Page 29
    ... subsidiaries in Japan adopted ASBJ Statement No. 22, "Accounting Standard for Consolidated Financial Statements" issued by the Accounting Standards Board of Japan on December 26, 2008. The effect on net income of the adoption of the new accounting standard is not material. Annual Report 2011 27

  • Page 30
    ...and 2010 Casio Computer Co., Ltd. and Subsidiaries 4. Cash and Cash Equivalents (1) Cash and cash equivalents at March 31, 2011 and 2010 consisted of the following: Millions of Yen 2011 2010 Thousands of U.S. Dollars 2011 Cash and deposits...Time deposits over three months ...Marketable securities...

  • Page 31
    ... the Accounting Standards Board of Japan on March 10, 2008, respectively. Information on financial instruments for the years ended March 31, 2011 and 2010 required pursuant to the revised accounting standards are as follows: (1) Qualitative information on financial instruments 1) Policies for using...

  • Page 32
    ... deposits, [2] Notes and accounts receivable-trade Since these items are short-term and the fair value approximates the book value, the book value is used as fair value. [3] Short-term investment securities and investment securities The fair value of shares is the market price, while the fair value...

  • Page 33
    ...Derivative transactions." Note 2: Financial instruments of which fair value is difficult to estimate Millions of Yen 2011 Book value 2010 Book value Thousands of U.S. Dollars 2011 Book value Unlisted shares... ¥5,620 ¥3,190 $67,711 The market price of the above shares are not available and the...

  • Page 34
    ... Consolidated Financial Statements Years ended March 31, 2011 and 2010 Casio Computer Co., Ltd. and Subsidiaries 7. Securities (1) Held-to-maturity debt securities Millions of Yen 2011 Book value Fair value 2010 Difference Book value Fair value Difference Thousands of U.S. Dollars 2011 Book value...

  • Page 35
    ...amount Due after Total one year Hedge accounting method Type Main hedged items Fair value Currency swaps that are subject to appropriated treatment Currency swaps: Receive in yen/ Pay in U.S. dollars Foreign-currency bond ¥3,020 ¥3,020 ¥- ¥- Note 2 ¥- Total ... Annual Report 2011 33

  • Page 36
    ... 31, 2011 and 2010 Casio Computer Co., Ltd. and Subsidiaries (2) Interest rate-related derivatives Millions of Yen 2011 Contract amount Due after Total one year Fair value Thousands of U.S. Dollars 2011 Contract amount Due after Total one year Fair value Hedge accounting method Type Main hedged...

  • Page 37
    ... 2011 and 2010 was as follows: Millions of Yen 2011 2010 Thousands of U.S. Dollars 2011 Line of credit...Unused ... ¥88,735 88,735 ¥61,725 61,725 $1,069,096 1,069,096 10. Income Taxes The Company and domestic consolidated subsidiaries used the statutory income tax rate of 40.7% for calculation...

  • Page 38
    ...Consolidated Financial Statements Years ended March 31, 2011 and 2010 Casio Computer Co., Ltd. and Subsidiaries Significant components of deferred tax assets and liabilities as of March 31, 2011 and 2010 were as follows: Millions of Yen 2011 2010 Thousands of U.S. Dollars 2011 Deferred tax assets...

  • Page 39
    ... 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 additional...

  • Page 40
    ...and the market and consumer categories. The categories of the main products and services belonging to each reportable segment are as follows. Consumer ...Watches, Clocks, Electronic dictionaries, Electronic calculators, Label printers, Electronic musical instruments, Digital cameras, Cellular phones...

  • Page 41
    ...attributable to reportable segments. 2. Segment income or loss is reconciled with operating income on the consolidated statements of operations. (4) Information about geographic areas Millions of yen For 2011 Japan North America Europe Asia Others Total Net sales ...For 2011 ¥162,351 Japan ¥42...

  • Page 42
    ... of manufacturing 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...

  • Page 43
    ... 2. 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, Singapore, China, India, Indonesia, Thailand...

  • Page 44
    ...its mobile terminal business. (2) Impairment loss For 2011: The Company and its consolidated subsidiaries have posted impairment loss. Details are as follows: Use Type of assets Location Business assets used in the other businesses of some Group companies Idle assets Land, buildings and structures...

  • Page 45
    ...June 1, 2010, CHMC merged with NCMC. Summary of business combination performed by subsidiary 1) Name and business of business combination including subsidiary a. Surviving company Company Name: NEC CASIO Mobile Communications, Ltd. Business Summary: Mobile terminal development, production, sales and...

  • Page 46
    ... its core business of wafer testing services for semiconductor manufacturing, and in December 2010 the company successfully went public with a listing on the Mothers section of the Tokyo Stock Exchange. In receiving Casio Group's WLP-related business, Tera Probe plans to strengthen and expand its...

  • Page 47
    ... obligations of the WLP-related business of the Company and Casio Micronics, as specified in the absorption-type company split agreement. b. Overview of the parties to the company split Name: Teramikros, Inc. (provisional name) Capital: Undecided Number of employees: Approx. 305 (including temporary...

  • Page 48
    Notes to Consolidated Financial Statements Years ended March 31, 2011 and 2010 Casio Computer Co., Ltd. and Subsidiaries (ii) Casio Micronics Business activities of the division being split off WLP-related business (research/development/manufacturing/sales) Business results of the division being ...

  • Page 49
    Independent Auditors' Report To the Board of Directors of CASIO COMPUTER CO., LTD.: We have audited the accompanying consolidated balance sheets of CASIO COMPUTER CO., LTD. (the "Company") and consolidated subsidiaries as of March 31, 2011 and 2010, the related consolidated statements of operations...

  • Page 50
    ... Company Casio Russia Sales of Casio products •Casio Italia S.r.l. Italy Sales of Casio products Asia •Casio Computer (Hong Kong) Ltd. Hong Kong Production of electronic calculators •Casio Taiwan Co., Ltd. Taiwan Sales of Casio products •Casio Singapore Pte., Ltd. Singapore Sales of Casio...

  • Page 51
    ..., 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, 2011) Stock Exchange Listings Tokyo Transfer Agent The Sumitomo Trust and Banking Co., Ltd. 600 Share Price 800 (Yen) Number...

  • 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