Brother International 2010 Annual Report Download
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Table of contents
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Page 1
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Page 2
... repair business for sewing machines. Brother Industries, Ltd., was established in 1934 as an enterprise to manufacture and distribute sewing machines. Today, its line of products includes not only sewing machines for home and industrial use, but also machine tools and information and communications...
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Page 3
...
Net Sales by Business Segment
(FY2009)
The Machinery and 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 a rich array...
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Page 4
...482 34,779 Operating income Income before income taxes and minority interests Net income Depreciation and amortization Capital expenditures Research and development costs Per Common Share (yen): Net income Equity Cash dividends Financial Position at Year-End: Total equity Total assets ¥ 149,921 343...
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Page 5
... ¥19,629 million, up 28.6% over the previous year.
Fiscal 2010 Strategy
Aiming for further growth, the Brother Group formulated a mid- to long-term corporate vision-Global Vision 21-in which we define three objectives for the Group.
1. Global 2. Vision 21 3.
From the autumn of 2008, the economic...
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Page 6
... Asia, centering on China, where we are pursuing cost reductions and targeting profitability. The Industrial Sewing Machines business is moving forward with profit base strengthening efforts, including the realignment of production sites. The Machine Tools business is strengthening its manufacturing...
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Page 7
... • Set up a software development company in Hangzhou, China
Production
Global
• Strengthen cost competitiveness and human resource development in Huanan region of China • Enhance cooperation between development and production divisions at the design stage
Sales & Marketing
• To increase...
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Page 8
... contributed to a 1.8% overall increase in operating income, to ¥1,797 million.
2008
2009
2010
Product Line-up
Printing and Solutions
MFC-6490CW
Color Inkjet All-in-One
MFC-9840CDW
Color Laser All-in-One
PT-1290
Labeling System
The MFC-6490CW is the first Brother color inkjet all-in-one...
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Page 9
Machinery and Solution (M&S) Business
•Net Sales (left) •Operating Income (loss) (right) Fiscal years ended March 31 (¥ billion) (¥ billion) 75 67.8 60 9.9 45 30 15 0 -0.8 -2.7 41.7 31.8 6 3 0 9 15 12
2008
2009
2010
Machine tools Industrial sewing machines
Net sales: ¥31,791 million (...
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Page 10
...President Auditing Strategy Meeting Executive Officers
Headquarters Departments / Personal & Home Company / Machinery & Solution Company
* For details, please see Board of Directors, Auditors and Executive Officers on page 48.
Corporate Mechanism and Internal Control System
The Board of Directors...
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Page 11
... 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.
Outside Directors
The Company...
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Page 12
...and Solutions business sales composition, resulting in an overall increase in income.
The Americas
Net sales: ¥144,831 million (down 9.7% YoY) Sales of communications and printing equipment and industrial sewing machines decreased and the impact of a stronger yen caused revenues to fall. Operating...
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Page 13
... markets. The Brother Group believes that it has sufficient cash for working 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.
2008
2009
2010...
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Page 14
... on Brother Group sales. Nevertheless, the Group expects net sales to increase year on year and anticipates higher sales from the online karaoke business as a result of the BMB Corp. acquisition, as well as stronger performance from the Machinery and Solution business, owing to a market recovery...
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Page 15
... returns on investment, which could adversely affect Group performance and financial conditions. (11) Natural Disasters and Other Threats The majority of Group production and sales facilities is located overseas. Its main production facilities are in China, Malaysia and Vietnam, and the Group...
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Page 16
C
ASSETS
onsolidated Balance Sheets
Thousands of U.S. Dollars (Note 1)
Brother Industries, Ltd. and Consolidated Subsidiaries March 31, 2010 and 2009
Millions of Yen
2010 CURRENT ASSETS: Cash and cash equivalents (Note 14) Time deposits Marketable securities (Notes 3 and 14) Receivables (Note 14...
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Page 17
...,535,866 shares in 2010 and 2009 Capital surplus Stock acquisition rights (Note 10) Retained earnings (Note 19) Unrealized gain (loss) on available-for-sale securities Deferred gain under hedge accounting Foreign currency translation adjustments Treasury stock, at cost 2010 - 9,901,661 shares 2009...
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Page 18
... 71,806 (785) 211,065
PER SHARE OF COMMON STOCK (Note 16): Basic net income Diluted net income Cash dividends applicable to the year
See notes to consolidated financial statements.
Yen
U.S. Dollars
Â¥
73.34 73.28 18.00
Â¥
56.79 56.76 26.00
$
0.789 0.788 0.194
16
Brother Annual Report 2010
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Page 19
... Stock Acquisition Rights Unrealized Gain (Loss) on Available-forsale Securities
Brother Industries, Ltd. and Consolidated Subsidiaries Years ended March 31, 2010 and 2009
Millions of Yen
Deferred Gain (Loss) Under Hedge Accounting Foreign Currency Translation Adjustments
Common Stock
Capital...
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Page 20
... benefits Increase in allowance for doubtful accounts Increase (decrease) 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...
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Page 21
Millions of Yen
Thousands of U.S. Dollars (Note 1)
2010 FORWARD FINANCING ACTIVITIES: Decrease in short-term borrowings, net Repayments of long-term debt Cash dividends paid Increase in treasury stock, net Other - net Net cash used in financing activities EFFECT OF FOREIGN CURRENCY EXCHANGE RATE ...
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Page 22
...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 23
...Plc Taiwan Brother Industries, Ltd. Zhuhai Brother Industries, Co., Ltd. Xian Brother Industries, Co., Ltd. Brother Corporation (Asia) Ltd. Brother Industries Technology (Malaysia) Sdn. Bhd. Brother International (Aust.) Pty. Ltd. Brother International Singapore Pte. Ltd. Brother Sewing Machine Xian...
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Page 24
... has been directly recorded in the equity; 3) expensing capitalized development costs of R&D; 4) cancellation of the fair 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...
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Page 25
... enacted tax laws to the temporary differences. (14) Bonuses to directors and corporate auditors Bonuses to directors and corporate auditors are accrued at the year end to which such bonuses are attributable. (15) Liability for Retirement Benefits (i) Employees' Retirement Benefits The Company has...
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Page 26
... Financial Statements
Brother Industries, Ltd. and Consolidated Subsidiaries For the Years ended March 31, 2010 and 2009
(ii) Retirement Benefits for Directors and Corporate Auditors Certain domestic consolidated subsidiaries provide retirement allowances for directors and corporate auditors...
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Page 27
... that has been directly recorded in the equity; 3) expensing capitalized development costs of R&D; 4) cancellation of the fair 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...
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Page 28
... information disclosures for the fiscal years beginning on or after April 1, 2010.
3. Marketable and Investment Securities
Marketable and investment securities as of March 31, 2010 and 2009 consisted of the following:
Millions of Yen Thousands of U.S. Dollars
2010 Current: Government and corporate...
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Page 29
... as follows:
Carrying amount Millions of Yen Thousands of U.S. Dollars
2010 Available-for-sale: Equity securities Investments in limited liability partnerships Other Total ¥ ¥ 645 80 - 725 ¥ ¥
2009 389 111 24 524 $ $
2010 6,935 861 - 7,796
The carrying values of debt securities and others by...
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Page 30
...Financial Statements
Brother Industries, Ltd. and Consolidated Subsidiaries For the Years ended March 31, 2010 and 2009
4. Inventories
Inventories at March 31, 2010 and 2009 consisted of the following:
Millions of Yen Thousands of U.S. Dollars
2010 Merchandise and Finished products Work in process...
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Page 31
... for directors and corporate auditors of ¥156 million ($1,677 thousand) and ¥285 million at March 31, 2010 and 2009, respectively, and employees' retirement benefits of ¥7,032 million ($75,613 thousand) and ¥5,860 million at March 31, 2010 and 2009, respectively.
Brother Annual Report 2010 29
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Page 32
...
Brother Industries, Ltd. and Consolidated Subsidiaries For the Years ended March 31, 2010 and 2009
Retirement Allowances for Directors and Corporate Auditors Retirement allowances for directors and corporate auditors are paid subject to approval of the shareholders in accordance with the Companies...
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Page 33
... 31, 2010 were as follows:
Stock Option Persons Granted Number of Options granted Date of Grant Exercise Price Exercise Period
2007 Stock Option
6 directors
46,000 shares
Mar 19, 2007
¥1 ($0.011) ¥1 ($0.011) ¥1 ($0.011) ¥1 ($0.011)
30 years starting on the following day of stock option...
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Page 34
... used to measure fair value of 2010 Stock Option (executive officers) Estimate method: Volatility of stock price: Estimated remaining outstanding period: Estimated dividend rate: Interest rate with risk free:
32 Brother Annual Report 2010
- - - - - - 114,500 - - 114,500
- - - - - 65,100...
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Page 35
...Total deferred tax assets Deferred Tax Liabilities: Securities withdrawn from retirement benefit trust Prepaid pension cost Differences between book and tax bases of property, plant and equipment Undistributed earnings of foreign subsidiaries Unrealized gain on available-for-sale securities Deferred...
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Page 36
...Consolidated Financial Statements
Brother Industries, Ltd. and Consolidated Subsidiaries For the Years ended March 31, 2010 and 2009
12. Research and Development Costs
Research and development costs charged to income were ¥34,779 million ($373,968 thousand) and ¥36,859 million for the years ended...
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Page 37
... 22,634 50,914
¥ ¥
2,630 2,105 4,735
¥ ¥
97 180 277
¥ ¥
1 0 1
$ $
1,043 1,935 2,978
Thousands of U.S. Dollars
2010 Finance leases: Due within one year Due after one year Total ¥ ¥ 2,630 2,105 4,735 ¥ ¥
2009 55 21 76 $ $
2010 28,280 22,634 50,914
35
Brother Annual Report 2010
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Page 38
... business administration department to identify the default risk of customers in the early stage. With respect to held-to-maturity financial investments, the Group manages its exposure to credit risk by limiting its funding to high credit rating bonds in accordance with in its internal guidelines...
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Page 39
... Fair value of financial instruments
Millions of yen Carrying amount Unrealized gain/loss
March 31, 2010 Cash and cash equivalents Marketable securities Receivables Investment securities Total Short-term bank loans Current portion of long-term debt Income taxes payable Payables Long-term debt Total...
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Page 40
...information of the fair value for derivatives is included in Note 15. (b) Financial instruments whose fair value cannot be reliably determined
Carrying amount Thousands of U.S. Dollars
March 31, 2010 Equity securities that do not have a quoted market price in an active market Investments in limited...
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Page 41
...in accordance 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...
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Page 42
... Statements
Brother Industries, Ltd. and Consolidated Subsidiaries For the Years ended March 31, 2010 and 2009 (Thousands of U.S. Dollars)
At March 31, 2010 Foreign currency forward contracts: Selling: U.S. Dollars Euro Pound Sterling Thailand Baht Yen Mexican Peso Korean Won Indonesia Rupee Taiwan...
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Page 43
...
88
Â¥
0
Current portion of long-term debt
Â¥
5,000
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Â¥
-
(Thousands of U.S. Dollars)
At March 31, 2010 Foreign currency forward contracts: Selling: U.S. Dollars Euro Pound Sterling Korean Won Indonesia Rupee Taiwan Dollars Buying: Taiwan Dollars Interest rate swaps: (fixed rate payment...
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Page 44
N otes to Consolidated Financial Statements
Brother Industries, Ltd. and Consolidated Subsidiaries For the Years ended March 31, 2010 and 2009
The following is the fair value information for foreign currency forward contracts to which hedge accounting is not applied at March 31, 2009. Foreign ...
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Page 45
... sales and production of home sewing machines. "Machinery and Solution" consists of sales and production of industrial sewing machines and machine tools. "Others" consists of online karaoke, information distribution services for cellular phones, real estate, leasing parts and other areas of business...
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Page 46
... business segments for the years ended March 31, 2010 and 2009 is summarized as follows: (a) Sales, operating expenses and operating income (loss) :
Millions of Yen
2010
Printing and Solutions Personal and Home Machinery and Solution Others Eliminations /Corporate Consolidated
Sales to customers...
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Page 47
... Information about geographical segments for the years ended March 31, 2010 and 2009 is summarized as follows: (a) Sales, operating expenses and operating income:
Millions of Yen
2010
Japan Americas Europe Asia and Others Eliminations /Corporate Consolidated
Sales to customers Interarea sales...
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Page 48
... The following appropriation of retained earnings at March 31, 2010 was approved at the Company's board of directors' meeting held on May 14, 2010:
Millions of Yen Thousands of U.S. Dollars
Year-end cash dividends of ¥10 ($0.108) per share
46 Brother Annual Report 2010
Â¥
2,687
$
28,892
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Page 49
Brother Annual Report 2010
47
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Page 50
...Brother Industries, Ltd.
Headquarters
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
Subsidiaries and Affiliated Companies
64
Number of Group Employees
27,303
Stock Exchange Listings
1908
Date...
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Page 51
... International Corporation (Canada) Ltd. · Brother International Europe Ltd. · Brother International GmbH · Brother France SAS. · Brother U.K. Ltd. · Brother International (Aust.) Pty. Ltd. · Brother International Singapore Pte. Ltd. · Brother (China) Ltd. · Brother Sales, Ltd. · Brother...
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