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Notes to Consolidated Financial Statements
3. CASH AND CASH EQUIVALENTS
The reconciliations between cash and time deposits in the consolidated balance sheets and cash and cash equivalents in the
consolidated statements of cash flows as of March 31, 2012 and 2011 are as follows:
Thousands of
Millions of yen
U.S. dollars
2012 2011 2012
Cash and time deposits............................................................................. ¥132,657 ¥142,287 $1,614,028
Securities maturing within three months from the acquisition dates............ 12,278 51,000 149,386
Deposits placed with banks with a maturity of over three months............... (2,576) (1,195) (31,342)
Cash and cash equivalents........................................................................ ¥142,359 ¥192,092 $1,732,072
In fiscal 2012, the Company and its consolidated subsidiaries
did not have any significant non-cash transaction.
In fiscal 2011, Commuture Corp., together with Daimei
Telecom Engineering Corp. and Todentsu Corp. transferred
its share and established Mirait Holdings Corp. As a result,
Commuture Corp. and its two subsidiaries have been
excluded from the consolidated subsidiaries. Details of
decrease in assets and liabilities are provided below as a
result of this transaction.
2011 Millions of yen
Current assets............................ ¥30,014
Non-current assets.................... 21,145
Total assets................................ 51,159
Current liabilities......................... 10,022
Non-current liabilities.................. 2,071
Total liabilities............................. ¥12,093
4. FINANCIAL INSTRUMENTS
a) Qualitative Information on Financial Instruments
(1) Policies for using financial instruments
The Company and its consolidated subsidiaries finance
investment in equipment and operating capital for business,
mainly using borrowings from banks and the issuance of
bonds based on their cash flow planning. Temporary excess
cash is managed with low risk financial assets. The Company
and its consolidated subsidiaries utilize derivative transactions
only to hedge risks of future changes in cash flows and fair
values not for trading purpose.
(2) Details of financial instruments used and the exposures to
risk and how they arise
Trade notes and accounts receivable are exposed to the credit
risks of customers, but the Company and its consolidated
subsidiaries try to reduce the risk according to rules for credit
control. Operating receivables denominated in foreign currency
are exposed to foreign exchange risks, but the Company and
its consolidated subsidiaries hedge the risks using forward
exchange contracts, etc. for the net position of foreign
currency operating receivables and payables. Securities are
mainly held to build and maintain good customer relationships.
The Company and its consolidated subsidiaries review the
circumstances periodically and evaluate the fair value of the
securities or the financial condition of the issuer, which are
generally business counterparties.
The main purpose of holding debt and issuing bonds is
to secure financing for equipment and operating capital.
The derivative transactions entered into comprise forward
exchange contracts to hedge exchange risks of foreign
currency debts and credits, interest swap contracts to hedge
fluctuation risks of interest rates and fair value for debt and
bonds, and commodity forward transactions to hedge the
risk of price fluctuation for materials. The Company and its
consolidated subsidiaries manage and control these risks
according to management’s rules for derivative transactions.
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SUMITOMO ELECTRIC Annual Report 2012