Brother International 2007 Annual Report Download
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Table of contents
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Page 1
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Page 2
... also machine tools and information and communications equipment such as printers, facsimiles and M ulti-Function Centers. Brother has also expanded its business operations overseas. Currently, it has 19 production facilities and 41 sales companies in 39 countries and regions.
Printing & Solutions...
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Page 3
... these goals, w e are making large capital expenditures and substantial investments in R&D programs. During the first year of "CS B2008," w hich ended in M arch 2007, w e achieved higher sales of communications and printing equipment and machine tools in all geographic regions. Sales also benefited...
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Page 4
... Brother's competitive edge in the market, while increasing investments and laying the foundation for Phase 3 Development of areas of new business, and building the business foundation for future growth
Driving Brother's global growth toward achievement of GV 21
02
Brother Annual Report 2007
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Page 5
...
" Achieving a balance between sustaining high profitability and technology investment for the future "
" Driving Brother's Growth "
Expanding of the Printing Business and building a stronger position in the market Investment in development of new business areas
Expansion of the Printing Business...
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Page 6
... company that can constantly contribute to society w hile receiving support from all stakeholders. To rew ard shareholders, w e plan to increase corporate value by achieving the goals of "Global Vision 21." Furthermore, w e have established a clearly defined dividend policy for distributing earnings...
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Page 7
...PC sales in India w ill lead to increase demand for printing equipment, including core Brother products like printers and multi-function centers. As a result, India is certain to become an even more important market for the Brother Group. The new company aims to reinforce Brother's sales and service...
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Page 8
... print / display tim e & date w ith a sim ple key operation and also com es w ith a huge back-light graphic display (16-characters x 3 lines) for easy view ing. Its sophisticated, ergonom ic design appeals " Easy to use" of m achine and blend in to any business scene.
06
Brother Annual Report 2007
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Page 9
... for free-motion mode and a single USB port for design import and export. It also comes with special accessories for quilting, such as an extra-w ide table and three different styles of free-m otion quilting feet. Creative, dependable and loaded w ith a variety of quilting stitches, the QC-1000...
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Page 10
Selected Five-Year Summary
Brother Industries, Ltd. and Consolidated Subsidiaries
M illions of Yen Fiscal years ended M arch 31
2007 Results of Operations:
Net sales Operating income Income before income taxes and minority interests Net income Depreciation and amortization Capital expenditures ...
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Page 11
... Japan, the economy continued to recover as companies reported strong earnings. In this environment, the Brother Group (Brother Industries, Ltd. and its consolidated subsidiaries) posted strong sales of communications and printing equipment and machine tools in all regions. Sales also benefited from...
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Page 12
... and Liquidity
0
2005
2006
2007
Interest-bearing Debt Debt Equity Ratio
Fiscal years ended March 31 (Â¥ billion) 100 0.5 80.7 (%) 0.5
80
0.4
60 0.2 40 37.5 20 0.2 35.3
0.3
0.2
0.1
0
2005
2006
2007
0
Interest-bearing Debt Debt Equity Ratio
The Brother Group's main financial policy is...
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Page 13
The Brother Group believes that its operating cash flow s, internal liquidity, including credit facilities, and sound balance sheet can provide the necessary funds for w orking capital, capital expenditures and R&D activities in order to sustain the group's grow th.
Total Assets
Fiscal years ended ...
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Page 14
... Sheets
Brother Industries, Ltd. and Consolidated Subsidiaries Years ended March 31, 2007 and 2006 Thousands of U.S. Dollars (Note 1)
M illions of Yen
2007 ASSETS CURRENT ASSETS:
Cash and cash equivalents Time deposits M arketable securities (Note 4) Receivables: Trade notes and accounts (Note...
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Page 15
... Issued: 277,535,866 shares in 2006 and 2005 Capital Surplus Stock acquisition rights (Note 9) Retained earnings Unrealized gain on available-for-sale securities Deferred loss under hedge accounting Land revaluation difference Foreign currency translation adjustments Treasury stock, at cost 2007...
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Page 16
...NET INCOM E NET INCOM E
PER SHARE OF COM M ON STOCK (Note 14):
Basic net income Diluted net income Cash dividends applicable to the year
See notes to consolidated financial statements.
Yen
U.S. Dollars
Â¥
104.82 104.82 20.00
Â¥
89.03 13.00
$
0.888 0.888 0.169
14
Brother Annual Report 2007
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Page 17
... Years ended March 31, 2007 and 2006 Thousands
Outstanding Number of Shares of Common Stock
M illions of Yen
Unrealized Gain on Deferred Foreign Stock Land Available-for- Loss under Currency sale Hedge Revaluation Translation Treasury Capital Acquisition Retained Earnings Securities Accounting...
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Page 18
Consolidated Statements of Cash Flows
Brother Industries, Ltd. and Consolidated Subsidiaries Years ended March 31, 2007 and 2006 Thousands of U.S. Dollars (Note 1)
M illions of Yen
2007 OPERATING ACTIVITIES:
Income before income taxes and minority interests Adjustments for: Income taxes - paid ...
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Page 19
... Cash and cash equivalents including transferred assets Gain on transfer of business Net disbursement for transfer of business
See notes to consolidated financial statements.
Â¥
1,446 (1,110) (1,034) 312
Â¥
-
$
12,254 (9,407) (8,763) 2,644
Â¥
(386)
Â¥
-
$
(3,271)
Brother Annual Report...
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Page 20
... financial statements are stated in Japanese yen, the currency of the country in w hich BROTHER INDUSTRIES, LTD. (the "Company") is incorporated and operates. The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japan...
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Page 21
... Brother Finance (U.K.) Plc Taiw an Brother Industries, Ltd. Zhuhai Brother Industries, Co., Ltd. Xian Typical Brother Industries, Co., Ltd. Brother Corporation (Asia) Ltd. Brother Industries Technology (M alaysia) Sdn. Bhd. Brother International (Aust.) Pty. Ltd. Brother International Singapore Pte...
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Page 22
...difference account and related deferred tax assets. As at M arch 31, 2007, the carrying amount of the land after the above one-time revaluation exceeded the market value by ¥ 0 million ($ 0 thousand).
(8) Long-lived Assets
In August 2002, the Business Accounting Council (BAC) issued a Statement of...
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Page 23
...be capitalized, w hile other finance leases are permitted to be accounted for as operating lease transactions if certain "as if capitalized" information is disclosed in the notes to the lessee's financial statements.
(12) Warranty Reserve
The Group provided a w arranty reserve for repair service to...
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Page 24
... Statements
Brother Industries, Ltd. and Consolidated Subsidiaries For the Years ended March 31, 2007 and 2006
According to the approval at the Company's annual shareholders' meeting on June 23, 2006, the Company terminated the policy relating to retirement benefits to directors and corporate...
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Page 25
... w arrants at the beginning of the year (or at the time of issuance). Cash dividends per share presented in the accompanying consolidated statements of income are dividends applicable to the respective years including dividends to be paid after the end of the year.
Brother Annual Report 2007
23
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Page 26
... to Consolidated Financial Statements
Brother Industries, Ltd. and Consolidated Subsidiaries For the Years ended March 31, 2007 and 2006
(24) New Accounting Pronouncements
Lease Accounting On M arch 30, 2007, the ASBJ issued ASBJ Statement No.13, "Accounting Standard for Lease Transactions", w hich...
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Page 27
... and Investment Securities
M arketable and investment securities as of M arch 31, 2007 and 2006 consisted of the follow ing:
M illions of Yen Thousands of U.S. Dollars
2007
Current: Government and corporate bonds Total Non-current: M arketable equity securities Government and corporate bonds Others...
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Page 28
... Financial Statements
Brother Industries, Ltd. and Consolidated Subsidiaries For the Years ended March 31, 2007 and 2006
Available-for-sale securities and held-to-maturity securities w hose fair value w as not readily determinable as of M arch 31, 2007 and 2006 w ere as follow s:
Carrying...
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Page 29
...) at M arch 31, 2007 w ere as follow s:
Thousands of U.S. Dollars
M illions of Yen
Inventories Buildings and structures, net of accumulated depreciation Land Accounts receivable Total
Â¥
1,011 408 123 24,563
$
8,568 3,458 1,042 208,161
Â¥
26,105
$
221,229
Brother Annual Report 2007
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Page 30
... Statements
Brother Industries, Ltd. and Consolidated Subsidiaries For the Years ended March 31, 2007 and 2006
7. Retirement and Pension Plans
The liability for retirement benefits in the accompanying consolidated balance sheets consisted of retirement allow ances for directors and corporate...
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Page 31
...2,587 1,427 (1,882) 776 (60) 900 (6) 213 985
Â¥
4,940 -
Â¥
4,940
* Includes special termination benefits of ¥725 million ($ 6,144 thousand) paid by a certain consolidated subsidiary.
Assumptions used for the years ended M arch 31, 2007 and 2006 w ere as follow s:
2007
Periodic recognition of...
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Page 32
.... The Board of Directors may declare dividends (except for dividends in kind) at any time during the fiscal year if the company has prescribed so in its articles of incorporation. The Company meets all the above criteria. The Corporate Law permits companies to distribute dividends-in-kind (non-cash...
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Page 33
...)
The assumptions used to measure fair value of 2007 Stock Option Estimate method: Black-Scholes option pricing model Volatility of stock price: 39.12% Estimated remaining outstanding period: 9 years Estimated dividend rate: 1.16% Interest rate w ith risk free: 1.63%
Brother Annual Report 2007
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Page 34
Notes to Consolidated Financial Statements
Brother Industries, Ltd. and Consolidated Subsidiaries For the Years ended March 31, 2007 and 2006
10. Income Taxes
The Company and its domestic subsidiaries are subject to Japanese national and local income taxes w hich, in the aggregate, resulted in ...
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Page 35
.... Pro forma information of leased property under finance leases that do not transfer ow nership of the leased property to the lessee on an "as if capitalized" basis for the years ended M arch 31, 2007 and 2006 w as as follow s:
M arch 31, 2007
M illions of Yen Furniture and Fixtures M achinery...
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Page 36
... Consolidated Financial Statements
Brother Industries, Ltd. and Consolidated Subsidiaries For the Years ended March 31, 2007 and 2006
Sublease obligations included in the above table at M arch 31, 2007 and 2006 w ere as follow s:
M illions of Yen Thousands of U.S. Dollars
2007
Finance leases: Due...
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Page 37
... in the value of hedged assets or liabilities. The Group does not hold or issue derivatives for trading purposes. Because the counterparties to these derivatives are limited to major international financial institutions w ith high credit rating, the Group does not anticipate any losses arising from...
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Page 38
Notes to Consolidated Financial Statements
Brother Industries, Ltd. and Consolidated Subsidiaries For the Years ended March 31, 2007 and 2006
The Group had the follow ing derivative contracts outstanding at M arch 31, 2007 and 2006:
M arch 31, 2007
M illions of Yen Contract or Notional Am ount ...
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Page 39
... Average Shares Yen EPS Dollars
Net Incom e
For the year ended M arch 31, 2007: Basic EPS Net income available to common shareholders Effect of Dilutive Securities Stock acquisition rights Diluted EPS Net income for computation For the year ended M arch 31, 2006: Basic EPS Net income available...
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Page 40
... 1, 2006, the Group classified its business segment as follow s: "Information and Document" consists of sales and production of fax machines, M FCs (multi-function centers), printers, typew riters, netw ork karaoke machines and information distribution services for cellular phones. "Personal and...
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Page 41
... the new accounting standard for stock options w as to decrease operating income of Others by¥ 62 million ($ 525 thousand) for the year ended M arch 31, 2007. (b) Total assets, depreciation, impairment loss and capital expenditures:
2007 Assets: Printing and Solutions Personal and Home M achinery...
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Page 42
... to Consolidated Financial Statements
Brother Industries, Ltd. and Consolidated Subsidiaries For the Years ended March 31, 2007 and 2006
2006 Assets: Information and Document Personal and Home M achinery and Solution Others Subtotal Elimination/Corporate Total Depreciation: Information and Document...
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Page 43
...
Information about geographical segments for the years ended M arch 31, 2007 and 2006 is summarized as follow s: (a) Sales, operating expenses and operating income:
M illions of Yen
2007
Japan Am ericas Europe Asia and Others Elim inations /Corporate Consolidated
Sales to customers Interarea sales...
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Page 44
Notes to Consolidated Financial Statements
Brother Industries, Ltd. and Consolidated Subsidiaries For the Years ended March 31, 2007 and 2006 M illions of Yen
2006
Japan Am ericas Europe Asia and Others Elim inations /Corporate Consolidated
Sales to customers Interarea sales Total sales Operating ...
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Page 45
Brother Annual Report 2007
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Page 46
...-6826 URL : http://w w w .brother.com
Foundation M ain Factories and Offices (including subsidiaries and affiliated companies)
62
Number of Group Employees
23,346
Stock Exchange Listings
1908
Date of Incorporation
Nagoya, Tokyo, Osaka
Transfer Agent
January 15, 1934
Paid-in Capital
M itsubishi...
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Page 47
... Corporation (Canada) Ltd. . Brother International Europe Ltd. . Brother International G.m.b.H. . Brother France S.A.S. . Brother U.K. Ltd. . Brother International (Aust.) Pty. Ltd. . Brother International Singapore Pte. Ltd. . Brother (China) Ltd. . Brother Sales, Ltd.
. Brother Industries...
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