Epson 2015 Annual Report Download - page 103

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102
35. Financial Instruments
(1) Capital Management
Epson selects the most effective fund management method focusing on the preservation of funds in view of
safeness and flexibility. In addition, Epson obtains financing from bank loans and bonds issued. Epson has a policy
not to transact derivatives for speculation purposes, but for avoiding the risks stated below.
Epson manages net interest-bearing debt, where cash and cash equivalents are deducted from interest-bearing debt,
and capital (equity attributable to owners of the parent company). The amounts were as follows:
Millions of yen
Thousands of
U.S. dollars
March 31,
March 31,
2014
2015
2015
Interest-bearing debt
220,553
185,978
1,547,613
Cash and cash equivalents
(211,510)
(245,330)
(2,041,524)
Net interest-bearing debt
9,042
(59,351)
(493,911)
Capital (equity attributable to
owners of the parent company)
362,371 494,325 4,113,547
Epson monitors financial indicators in order to maintain a well-balanced capital structure that ensures an
appropriate return on equity and a sound and flexible financial condition for future investment. Epson monitor
credit ratings for financial soundness and flexibility, and ROE (return on equity) for profitability, while focusing on
changes in the domestic and overseas environment.
(2) Financial Risk Management
Epson is exposed to financial risks (credit risks, liquidity risks, foreign exchange risks, interest rate risks, and
market price fluctuation risks) in the process of its business activities; and it manages risks based on a specific
policy in order to avoid or reduce said risks. The results of risk management are quarterly reported by the financial
and general accounting department to the Executive Committee of the Company.
Epson’ s policy limits derivatives to transactions for the purpose of mitigating risks from transactions based on
actual demand. Therefore, Epson do not transact derivatives for speculation purposes or trading purposes.