Sharp 2012 Annual Report Download - page 60

58 SHARP CORPORATION
Financial Section
The Company strives to recognize and reduce
irrecoverable risks, due to deteriorating financial
conditions or other factors at an early stage. The
Company’s consolidated subsidiaries also follow
the same monitoring and administration process.
[2] Management of market risk
The Company decides basic policy for derivative
transactions at the Foreign Exchange Administra-
tion Committee meeting which is held monthly
and the Finance Administration Committee meet-
ing which is required by the Company’s internal
procedure. The Treasury Department of Corporate
Accounting and Control Group executes transac-
tions and reports the result of such transactions
to the Accounting Department of Corporate Ac-
counting and Control Group on a daily basis. The
Accounting Department has set up the specialized
section for transaction results and position man-
agement, and reports the result of transactions to
the General manager of Corporate Accounting and
Control Group on a daily basis.
In addition, the Treasury Department reports
the result of transactions to the Foreign Exchange
Administration Committee and the Finance Ad-
ministration Committee on a periodic basis. Its
consolidated subsidiaries also manage forward for-
eign exchange transactions in accordance with the
rules established by the Company, and report the
content of such transactions to the Company on a
monthly basis. For interest swap contracts and cur-
rency swap contracts, its consolidated subsidiaries
execute transactions after the Company approves.
For other securities and investments in capital,
The Company regularly monitors prices and is-
suer’s financial positions, and continually reviews
the possession by taking these indices as well as
the relationship with issuers into consideration.
[3] Management of liquidity risk in financing activities
The Treasury Department manages the liquidity
risk by making and updating the financial plans
based on reports from each section, and maintains
ready liquidity.
(4) Supplementary explanation of fair value of financial
instruments
The fair value of financial instruments is based on the
quoted market price in active market, but in case a
market price is not available, reasonably estimated
prices are included in the fair value. As variable fac-
tors are incorporated in the determination of this
reasonably estimated price, it may vary depending on
different assumptions. The contract amount related
to derivative transactions has nothing to do with the
market risk related to the derivative transactions.
(b) Fair values of financial instruments
The consolidated balance sheet amounts, fair values and differences between the two, as of March 31, 2011 and 2012
are as follows:
(1) Cash and cash equivalents, Time deposits, and Short-term investments
(2) Notes and accounts receivable (excluding other accounts receivable)
(3) Investments in securities
1) Shares of nonconsolidated subsidiaries and affiliates
2) Other securities
Total Assets
(4) Notes and accounts payable (excluding other accounts payable)
(5) Bank loans and Current portion of long-term borrowings
(included in short-term borrowings)
(6) Commercial paper (included in short-term borrowings)
(7) Straight bonds (included in short-term borrowings and long-term debt)
(8) Bonds with subscription rights to shares (included in long-term debt)
(9) Long-term borrowings (included in long-term debt)
Total of Liabilities
(10) Derivative transactions*
¥ 195,325
375,411
3,357
48,408
622,501
389,484
212,321
351,000
217,126
201,068
112,952
1,483,951
(6,881)
¥ 195,325
368,524
2,101
48,408
614,358
389,484
212,321
351,000
220,966
196,997
115,055
1,485,823
(8,051)
¥ 0
(6,887)
(1,256)
0
(8,143)
0
0
0
3,840
(4,071)
2,103
1,872
(1,170)
Yen (millions)
2012
DifferenceFair Value
Consolidated
Balance Sheet
Amount