Brother International 2008 Annual Report Download
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Table of contents
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Page 1
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Page 2
...only sewing machines for home and industrial use, but also machine tools and information and communications equipment such as printers, facsimiles and Multi-Function Centers. Brother has also expanded its business operations overseas. Currently, it has 19 production facilities and 41 sales companies...
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Page 3
... foreign exchange rate. In Machinery & Solution business, sales of industrial sewing machines moved steadily, mainly for shipments to Turkey, and the overall performance also turned out to include an increase in sales. Sales of machine tools moved strongly, mainly for shipments to China, resulting...
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Page 4
... "CS B2008 (FY2006 - FY2007)" was "Driving Brother's Growth." While continuing our sales growth with the printing business as a leading force, we developed our first color laser products equipped with a Brother original engine and started to distribute them worldwide. Concurrently, disposal of non...
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Page 5
.../Eastern
Inkjet High-Speed Line-Head Models
Color Lasers
Inkjet Models for Business Use Inkjet Models for Home/Home Office Use
Home Home Office Small Office SMB Corporate
Europe, and firmly maintain a position as the top manufacturer of compact monochrome laser products. Reinforce the Electronic...
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Page 6
...Concurrent Chain and Supply Chain.
Fostering of Human Resources •Significantly increase the number of employees in departments related to research & development and manufacturing, and rapidly cultivate their skills. •Globalize human resources, mainly in product development and design. Promotion...
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Page 7
... our focus on product development to invigorate the domestic sewing machine market for many years to come.
A special nameplate was placed on the memorial sewing machine.
3
BIC (USA) Receives Staples' 2007 Global Vendor of the Year Award
Brother International Corporation (USA) (BIC (USA)) has been...
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Page 8
...or connected to a PC. The machine can print/display time & date with a simple key operation and also comes with a large back-light graphic display for easy viewing. Its sophisticated, ergonomic design appeals "Easy to use" of machine and blend in to any business scene.
6
Brother Annual Report 2008
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Page 9
....
M&S
Machinery & Solution
BAS-342G
Direct Drive Programmable Electronic Sewing Machine with Cylinder Bed The programmable electronic sewing machine is used to sew geometric patterns, for example, hip pockets on jeans, shoes and bags. The BAS-342G has the world's highest sewing speed and industry...
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Page 10
...SUMMARY
Brother Industries, Ltd. and Consolidated Subsidiaries
Millions of Yen Fiscal years ended March 31
2008 Results of Operations: Net sales Operating income Income before income taxes and minority interests Net income Depreciation and amortization Capital expenditures Research and development...
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Page 11
... increase of 0.7% year on year. Although we had some sales-decreasing factors such as business transfers, we could keep the result at this level due to steady sales of communications and printing equipment and machine tools, as well as the positive impact of the foreign exchange rate, mainly against...
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Page 12
... sales)
1) Japan Net sales: ¥428,022 million (-0.1% YoY ) While we had a sales increase in communications and printing equipment, mainly for shipments to Europe, net sales remained almost at the same level as in the same period in the previous year because of sales decrease for business transfers...
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Page 13
.... In the full-year forecast for the fiscal year ending March 2009, under such an economic environment, we expect to increase net sales compared with the fiscal year ended March 2008, mainly due to sales increases in the laser and inkjet business of communications and printing equipment, in spite of...
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Page 14
... and associated companies Allowance for doubtful accounts Inventories (Note 6) Deferred tax assets (Note 10) Other current assets Total current assets PROPERTY, PLANT AND EQUIPMENT: Land (Notes 5 and 6) Buildings and structures (Notes 5 and 6) Machinery and vehicles Furniture and fixtures...
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Page 15
...,866 shares in 2008 and 2007 Capital surplus Stock acquisition rights (Note 9) Retained earnings Unrealized gain on available-for-sale securities Deferred gain (loss) under hedge accounting Land revaluation difference Foreign currency translation adjustments Treasury stock, at cost 2008 - 2,197,495...
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Page 16
... of property, plant and equipment, net Foreign exchange loss Loss on impairment of long-lived assets (Notes 2(7) and 5) Reversal of bad debt allowance Gain on transfer of at-home sales business (Note 2(15)) Retirement benefit cost Other, net Other expenses, net INCOME BEFORE INCOME TAXES AND...
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Page 17
... Number of Shares of Common Stock Common Stock Capital Surplus Stock Acquisition Rights Retained Earnings
Millions of Yen
Unrealized Deferred Gain on Gain (Loss) Available-forUnder sale Hedge Securities Accounting Land Revaluation Difference Foreign Currency Translation Adjustments Treasury Stock...
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Page 18
... doubtful accounts Increase in liability for warranty reserve Other - net Total adjustments Net cash provided by operating activities INVESTING ACTIVITIES: Proceeds from sales of property, plant and equipment Proceeds from sales of investment securities Proceeds from collection of loans Disbursement...
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Page 19
... $
(90,820) 128,420 - - 703,770 832,190
Additional information Assets and liabilities increased due to acquisition of shares of a new consolidated subsidiary (Note 3) Assets Liabilities Cash paid for capital Goodwill Assets and liabilities decreased due to transfer of at-home sales business (Note...
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Page 20
...consolidated financial statements are stated in Japanese yen, the currency of the country in which 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 Corporation (Asia) Ltd. Brother Industries Technology (Malaysia) Sdn. Bhd. Brother International (Aust.) Pty. Ltd. Brother International Singapore Pte. Ltd. Brother Sewing Machine Xian Co., Ltd. Brother Industries (Shenzhen) Ltd. Brother (China) Ltd. Brother Industries (Vietnam) Ltd. Brother...
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Page 22
...the declining-balance method. Property, plant and equipment acquired by the Company and domestic consolidated subsidiaries on and after April 1, 2007 are depreciated by the declining-balance method in accordance with the revised corporate tax law, which is effective for fiscal years beginning on and...
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Page 23
... 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. (11) Warranty Reserve The Group provided a warranty reserve for repair service to cover all repair expenses based on the past...
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Page 24
... the network karaoke business and accounted for it by purchase method of accounting. The related goodwill is being systematically amortized over 7 years. The Group transferred 100% of its at-home sales business to Yamano Holdings Corporation on January 1, 2007. The transferred at-home sales business...
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Page 25
... are translated into Japanese yen at the average exchange rate during the year. (20) Derivative and Hedging Activities The Group uses derivative financial instruments to manage its exposures to fluctuations in foreign exchange and interest rates. Foreign exchange forward contracts, interest...
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Page 26
... and losses of defined benefit plans recognized outside profit or loss (3) Capitalization of intangible assets arising from development phases (4) Fair value measurement of investment properties, and the revaluation model for property, plant and equipment, and intangible assets (5) Retrospective...
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Page 27
... and Investment Securities
Marketable and investment securities as of March 31, 2008 and 2007 consisted of the following:
Millions of Yen Thousands of U.S. Dollars
2008 Current: Government and corporate bonds Total Non-current: Marketable equity securities Government and corporate bonds Others...
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Page 28
... STATEMENTS
Brother Industries, Ltd. and Consolidated Subsidiaries For the Years ended March 31, 2008 and 2007
Available-for-sale securities and held-to-maturity securities whose fair value was not readily determinable as of March 31, 2008 and 2007 were as follows:
Carrying amount Millions of Yen...
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Page 29
... bonds due 2011 *2 Loans principally from banks, due serially to 2011 with interest rates ranging from 1.39% to 2.24% (from 2.10% to 3.10% in 2007): Collateralized Unsecured Total Less: Current portion Long-term debt, less current portion
*1 : Issued by the Company *2 : Issued by Brother Real...
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Page 30
... with the Japanese Corporate Law. Certain domestic consolidated subsidiaries recorded a liability for their unfunded retirement allowance plan covering all of their directors and corporate auditors. Employees' Retirement Benefits Under the pension plan, employees terminating their employment...
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Page 31
... Yen Thousands of U.S. Dollars
2008 Service cost Interest cost Expected return on plan assets Recognized actuarial loss Amortization of prior service cost Prior retirement benefits cost in foreign subsidiaries Additional retirement payments and others* Amounts contributed from employees Cumulative...
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Page 32
... Number of Options granted 46,000 shares Date of Grant Mar 19, 2007 Exercise Price ¥1 ($0.010) ¥1 ($0.010) Exercise Period 30 years starting on the following day of stock option grant date Same as above
2008 Stock Option
6 directors
65,100 shares
Mar 24, 2008
30
Brother Annual Report...
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Page 33
... used to measure fair value of 2008 Stock Option Estimate method: Volatility of stock price: Estimated remaining outstanding period: Estimated dividend rate: Interest rate with risk free: Black-Scholes option pricing model 38.62% 9 years 1.24% 1.09% Black-Scholes option pricing model 39.12% 9 years...
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Page 34
...:
Thousands of U.S. Dollars
Millions of Yen
2008 Deferred Tax Assets: Inventory Accrued bonuses Accrued expenses Allowance for doubtful accounts Warranty reserve Employees' retirement benefits Write-down of investment securities Depreciation Tax loss carryforwards Deferred loss on derivatives...
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Page 35
.... Pro forma information of leased property under finance leases that do not transfer ownership of the leased property to the lessee on an "as if capitalized" basis for the years ended March 31, 2008 and 2007 was as follows: March 31, 2008
Furniture and Fixtures Millions of Yen Machinery and Vehicles...
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Page 36
..., 2008 was not disclosed since it was nil. Leased property whose ownership does not transfer to the lessee during or at the completion of the lease term at March 31, 2007 was as follows: March 31, 2007
Machinery and Vehicles Millions of Yen Intangible Fixed Assets Total
Acquisition cost Accumulated...
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Page 37
... with internal policies which regulate the authorization and credit limit amount. The contract or notional amounts of derivatives which are shown in the following table do not represent the amounts exchanged by the parties and do not measure the Group's exposure to credit or market risk.
Brother...
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Page 38
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Brother Industries, Ltd. and Consolidated Subsidiaries For the Years ended March 31, 2008 and 2007
The Group had the following derivative contracts outstanding at March 31, 2008 and 2007: March 31, 2008
Millions of Yen Contract or Notional Amount Fair ...
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Page 39
... Fair Value Unrealized Gain (Loss)
Forward exchange contracts: Selling: U.S. Dollars EURO Pound Sterling YEN Mexican Peso Buying: U.S. Dollars EURO Pound Sterling YEN Australian Dollars Currency option contracts Selling: Call Euro (Option fee) Buying: Call Euro (Option fee) Interest rate swaps...
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Page 40
... of sales and production of domestic sewing machines. "Machinery and Solution" consists of sales and production of industrial sewing machines and machine tools. "Others" consists of network karaoke services, information distribution services for cellular phones, real estate, leasing parts and...
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Page 41
... capital expenditures:
Millions of Yen Thousands of U.S. Dollars
2008 Assets: Printing and Solutions Personal and Home Machinery and Solution Others Subtotal Elimination/Corporate Total Depreciation: Printing and Solutions Personal and Home Machinery and Solution Others Total Impairment: Printing...
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Page 42
... Information about geographical segments for the years ended March 31, 2008 and 2007 is summarized as follows: (a) Sales, operating expenses and operating income:
Millions of Yen
2008
Japan Americas Europe Asia and Others Eliminations /Corporate Consolidated
Sales to customers Interarea sales...
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Page 43
...discussed in Note 2(6), property, plant and equipment acquired by the Company and domestic consolidated subsidiaries on and after April 1, 2007 are depreciated by the declining-balance method in accordance with the revised corporate tax law, which is effective for fiscal years beginning on and after...
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Page 44
... STATEMENTS
Brother Industries, Ltd. and Consolidated Subsidiaries For the Years ended March 31, 2008 and 2007
17. Subsequent Events
a. Appropriations of Retained Earnings The following appropriations of retained earnings at March 31, 2008 were approved at the Company's board of directors' meeting...
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Page 45
Brother Annual Report 2008
43
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Page 46
... Facsimile : +81-52-811-6826 URL : http://www.brother.com
Foundation
Main Factories and Offices (including subsidiaries and affiliated companies)
60
Number of Group Employees
23,809
Stock Exchange Listings
1908
Date of Incorporation
Nagoya, Tokyo, Osaka
Transfer Agent
January 15, 1934
Paid-in...
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Page 47
... Ltd. · Brother International (Aust.) Pty. Ltd. · Brother International Singapore Pte. Ltd. · Brother (China) Ltd. · Brother Sales, Ltd.
· Brother Industries (Shenzhen) Ltd. · Brother Industries (Vietnam) Ltd. · Brother Technology (Shenzhen) Ltd. · Brother Industries Technology (M) Sdn. Bhd...
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