Brother International 2009 Annual Report Download

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Table of contents

  • Page 1

  • Page 2
    ...for creative sewing and embroidery. MACHINERY & SOLUTION The Machinery & Solution (M&S) business offers customers "solutions" that meet or exceed the needs of their production sites through industrial sewing machines and machine tools. Brother's industrial sewing machines are energy saving and offer...

  • Page 3
    ... 60 50 45.8 40 30 20 10 0 16.9% 33.2% 15.1% 34.8% 25 20 15 10 5 104.8 The Americas Europe Asia and Others Japan 0 2007 2008 2009 Net income Net income per share (right) * Includes commemorative dividends of ¥2 per share to mark the 100th anniversary of the Company's founding. Brother Annual...

  • Page 4
    ... of our mid- to long-term corporate vision, Global Vision 21. We will continue to fortify our management infrastructure and prepare for growth with carefully examined investments. Toshikazu Koike Net Sales Fiscal years ended March 31 Operating Income Fiscal years ended March 31 Net Income Fiscal...

  • Page 5
    ... working toward the goal of "Turning Global Vision 21 into Reality." In line with the expansion of existing businesses and significant increases mainly in new businesses, we have set "challenge" targets of ¥1 trillion in net sales and ¥100 billion in operating income for FY2012. Shorter-term...

  • Page 6
    ...time being mFocus on higher-end value-added models as well as business models Electronic Stationery Business mReinforce solution-providing capability mExploit new demands from specialized applications for vertical markets mActively utilizing outside resources, including M&A 4 Brother Annual Report...

  • Page 7
    ... promotion of business utilizing music contents Domestic and Industrial Sewing Machines and Machine Tools Business We will continue making the Personal & Home business, which conducts domestic sewing machine operations, profitable. The Machinery & Solution business, which handles industrial sewing...

  • Page 8
    ...Lite label design software is built right into the machine, eliminating the hassle of installing software and allowing PC users to easily print on the go. This innovative labeling system is extremely portable, suiting it for use at home, in the office or at a job site. 6 Brother Annual Report 2009

  • Page 9
    ... for next-generation sewing and embroidery machines. M&S Machinery & Solution S-7200C Single Needle Direct Drive Straight Lock Stitcher with Thread Trimmer This industrial sewing machine uses a new proprietary motor. With a direct drive system that minimizes drive motor power transmission loss...

  • Page 10
    ... directors) Strategy Meeting President Headquarters Departments Personal & Home Company Machinery & Solution Company Corporate Mechanism and Internal Control System The Board of Directors comprises seven members (including three outside directors) and meets regularly each month and in special...

  • Page 11
    ...nine members) under the direction of the representative director and president, inspect risk-related conditions affecting the headquarters, internal and Group companies and report directly to the representative director and president as well as to the corporate auditors. Brother Annual Report 2009 9

  • Page 12
    ...-100B began in Japan, and we are developing product-related marketing activities to release this product overseas. •Maintenance workers viewing manuals onsite. •This viewer can store the equivalent of 10,000 A4 pages of data. •The Brother Document Viewer SV-100B 10 Brother Annual Report 2009

  • Page 13
    ..., resulted in decreased income. Machinery and Solution (M&S) Business 1.5 0 2007 2008 2009 Net sales: ¥41,665 million (down 38.6% YoY) Industrial sewing machines: ¥19,105 million (down 45.8% YoY) Decreased demand for capital investment in the global garment industry, particularly in China...

  • Page 14
    ...use of cash held by individual companies. We also maintain open lines of credit with multiple banking institutions to complement existing liquidity. By creating this system to correct the uneven distribution of funds, we have succeeded in reducing our borrowing needs. 12 Brother Annual Report 2009

  • Page 15
    ...capital, capital investment and R&D investment to maintain growth through cash flows from operating activities; liquidity on hand, including open lines of credit; and a sound corporate financial structure. 100 80 60 46.1 83.2 70.4 40 20 0 2007 2008 2009 Interest-bearing Debt Fiscal years ended...

  • Page 16
    ... 1) Brother Industries, Ltd. and Consolidated Subsidiaries March 31, 2009 and 2008 Millions of Yen 2009 ASSETS CURRENT ASSETS: Cash and cash equivalents Time deposits Marketable securities (Note 3) Receivables: Trade notes and accounts (Note 6) Unconsolidated subsidiaries and associated companies...

  • Page 17
    ... earnings Unrealized (loss) gain on available-for-sale securities Deferred gain under hedge accounting Foreign currency translation adjustments Treasury stock, at cost 2009 - 9,886,894 shares 2008 - 2,197,495 shares Total Minority interests Total equity TOTAL See notes to consolidated financial...

  • Page 18
    ...704 90,826 (5,612) 155,735 PER SHARE OF COMMON 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 ¥ 56.79 56.76 26.00 ¥ 98.46 98.44 22.00 $ 0.579 0.579 0.265 16 Brother Annual Report...

  • Page 19
    ... Securities Brother Industries, Ltd. and Consolidated Subsidiaries Years ended March 31, 2009 and 2008 Millions of Yen Deferred Gain (Loss) Under Hedge Accounting Land Revaluation Difference Foreign Currency Translation Adjustments Common Stock Capital Surplus Retained Earnings Treasury Stock...

  • Page 20
    ... doubtful accounts (Decrease) 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...

  • Page 21
    ...OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR CASH AND CASH EQUIVALENTS, END OF YEAR See notes to consolidated financial statements. 2008 ¥ 28,897 $ 2009 (58,143) ¥ (5,698...

  • Page 22
    ... 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 and have been made at the rate of ¥98 to $1, the approximate rate of exchange at March...

  • Page 23
    ...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...

  • Page 24
    ... value model of accounting for property, plant, and equipment and investment properties and incorporation of the cost model of accounting; 5) recording the prior years' effects of changes in accounting policies in the income statement where retrospective adjustments to financial statements have been...

  • Page 25
    ... of the leased property to the lessee were to be treated as sales. However, other finance leases were permitted to be accounted for as operating lease transactions if certain "as if sold" information is disclosed in the note to the lessor's financial statements. The revised accounting standard...

  • Page 26
    ... CONSOLIDATED FINANCIAL STATEMENTS Brother Industries, Ltd. and Consolidated Subsidiaries For the Years ended March 31, 2009 and 2008 (13) Warranty Reserve The Group provided a warranty reserve for repair service to cover all repair expenses based on the past warranty experience. Warranty reserve...

  • Page 27
    ... in minority interests. Revenue and expense accounts of consolidated foreign subsidiaries are translated into Japanese yen at the average exchange rate during the year. (21) Derivative and Hedging Activities The Group uses derivative financial instruments to manage its exposures to fluctuations in...

  • Page 28
    ... value model accounting for property, plant, and equipment and investment properties and incorporation of the cost model accounting; 5) recording the prior years' effects of changes in accounting policies in the income statement where retrospective adjustments to the financial statements have been...

  • Page 29
    ...-for-sale and held-to-maturity at March 31, 2009 were as follows: Millions of Yen Thousands of U.S. Dollars Held to Maturity March 31, 2009 Due in one year or less Due after one year through five years Total Held to Maturity ¥ ¥ 301 525 826 $ $ 3,071 5,357 8,428 Brother Annual Report 2009...

  • Page 30
    ... FINANCIAL STATEMENTS Brother Industries, Ltd. and Consolidated Subsidiaries For the Years ended March 31, 2009 and 2008 4. Inventories Inventories at March 31, 2009 and 2008 consisted of the following: Millions of Yen Thousands of U.S. Dollars 2009 Merchandise and Finished products Work...

  • Page 31
    ... plan was terminated. The Company and certain domestic subsidiaries applied accounting treatments specified in the guidance issued by the Accounting Standard Board of Japan. Certain foreign subsidiaries have defined benefit pension plans and defined contribution pension plans. Brother Annual Report...

  • Page 32
    ... any time during the fiscal year in addition to the year-end dividend upon resolution at the shareholders meeting. For companies meet certain criteria such as; (1) having the Board of Directors, (2) having independent auditors, (3) having the Board of Corporate Auditors, and (4) the term of service...

  • Page 33
    ... years starting on the following day of stock option grant date Same as above Same as above 2007 Stock Option 6 directors 46,000 shares Mar 19, 2007 2008 Stock Option 2009 Stock Option 6 directors 5 directors 65,100 shares 114,500 shares Mar 24, 2008 Mar 23, 2009 Brother Annual Report 2009...

  • Page 34
    ... 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 43.17% 10 years 1.34% 1.29% 32 Brother Annual Report 2009

  • Page 35
    ...) 1.03 37.69% A reconciliation between the normal effective statutory tax rate and the actual effective tax rate reflected in the accompanying consolidated statements of income for the year ended March 31, 2008 was not disclosed because the difference was not material. Brother Annual Report 2009 33

  • Page 36
    ...the years ended March 31, 2009 and 2008, respectively. As discussed in Note 2(12), the Group accounts for leases which existed at the transition date and do not transfer ownership of the leased property to the lessee as operating lease transactions. Pro forma information of such finance leases which...

  • Page 37
    ... assets. As discussed in Note 2(12), the Group accounts for leases which existed at the transition date and do not transfer ownership of the leased property to the lessee as operating lease transactions. Expected revenues including interest revenue portion from such finance leases existed at the...

  • Page 38
    N OTES TO CONSOLIDATED FINANCIAL STATEMENTS Brother Industries, Ltd. and Consolidated Subsidiaries For the Years ended March 31, 2009 and 2008 13. Derivatives The Group enters into foreign currency forward contracts and currency option contracts to hedge foreign exchange risk associated with ...

  • Page 39
    ...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...552 8,329 229 ¥ 134 939 419 (121) (3) Brother Annual Report 2009 37

  • Page 40
    ... FINANCIAL STATEMENTS March 31, 2009 Thousands of U.S. Dollars Contract or Notional Amount Fair Value Unrealized Gain (Loss) Brother Industries, Ltd. and Consolidated Subsidiaries For the Years ended March 31, 2009 and 2008 Forward exchange contracts: Selling: U.S. Dollars Pound Sterling Thailand...

  • Page 41
    ... and typewriters. "Personal and Home" consists 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...

  • Page 42
    ...Business Segments Information about business segments for the years ended March 31, 2009 and 2008 is summarized as follows: (a) Sales, operating expenses and operating income (loss) : Millions of Yen 2009 Printing and Solutions Personal and Home Machinery and Solution Others Eliminations /Corporate...

  • Page 43
    ... Information about geographical segments for the years ended March 31, 2009 and 2008 is summarized as follows: (a) Sales, operating expenses and operating income: Millions of Yen 2009 Japan Americas Europe Asia and Others Eliminations /Corporate Consolidated Sales to customers Interarea sales...

  • Page 44
    ... FINANCIAL STATEMENTS Millions of Yen Brother Industries, Ltd. and Consolidated Subsidiaries For the Years ended March 31, 2009 and 2008 2008 Japan Americas Europe Asia and Others Eliminations /Corporate Consolidated Sales to customers Interarea sales Total sales Operating expenses Operating...

  • Page 45
    Brother Annual Report 2009 43

  • Page 46
    ... Information Brother Industries, Ltd. Head Office 15-1, Naeshiro-cho, Mizuho-ku, Nagoya 467-8561, Japan Telephone : +81-52-824-2075 Facsimile : +81-52-811-6826 URL : http://www.brother.com Foundation Main Factories and Offices (including subsidiaries and affiliated companies) 61 Number of Group...

  • Page 47
    ...· 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 (Malaysia) Sdn. Bhd...

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