Brother International 2010 Annual Report Download - page 13

Fund Procurement, Liquidity and Cash Flows
The Brother Group’s financial policies ensure flexible and efficient funding and maintain an appropriate level of
liquidity for current and future operating activities. We have created a cash management system to optimize the
groupwide use of cash held by individual companies. We also maintain open lines of credit with several banking
institutions to complement existing liquidity on hand. Through these measures, we have been working to estab-
lish a system to correct the uneven distribution of funds and minimize the overall borrowing needs of the Group.
Liquidity Management
The Group’s liquidity on hand consists of cash and cash equivalents and the unused portion of open commitment
lines of credit. As of March 31, 2010, cash and cash equivalents totaled ¥49,031 million.
The Group maintains commitment lines of credit with several financial institutions. The entire amount of the
Group’s total ¥30,000 million in open lines of credit was unused, as of March 31, 2010. This total plus cash and cash
equivalents was ¥79,031 million at fiscal year-end. Taking into consideration seasonal funding requirements, debt
payable within one year and business environment risks, the Group believes it has sufficient liquidity on hand to
support operations for one year.
Fund Procurement
As a rule, working capital and other short-term funding is debt payable within one year that is funded with local
currency. The basic policy on long-term funding for manufacturing facilities is that funds should come from
internal reserves, long-term fixed-rate debt and corporate bonds.
As of March 31, 2010, short-term borrowings were ¥6,337 million, primarily denominated in yen.
Unsecured long-term debt totaled ¥5,107 million, with fixed-rate debt procured in yen. Corporate bonds
totaled ¥15,500 million.
As of March 31, 2010, Rating and Investment Information, Inc., assigned the Group’s long-term bonds and
issuer credit “A” ratings and its commercial paper an “a-1” rating. We consider consistent ratings important in
maintaining access to credit and capital 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.
Cash Flows
Cash flows from operating activities
Net cash provided by operating activities was ¥50,348 million, ¥29,828 million more than the ¥20,520 million
provided in the previous year. This was primarily due to an increase in income before income taxes and minority
interests, an increase in trade notes and accounts payable and a decrease in inventories.
Cash flows from investing activities
Net cash used in investing activities was ¥18,061 million, ¥8,157 million less than the ¥26,218 million used in the
previous year, reflecting a decrease in disbursement for purchases of property, plant and equipment.
Cash flows from financing activities
Net cash used in financing activities was ¥32,173 million, ¥12,651 million more than the ¥19,522 million used in the
previous year. On the basis of cash flow, the total amount of decrease in short-term borrowings, net, and repay-
ments of long-term debt resulted in ¥26,965 million in disbursements, ¥24,255 million more than in the previous
year. Cash dividends paid used ¥5,375 million, ¥1,426 million less than one year earlier.
As a result of these activities, as well as the exchange rate fluctuations affecting the yen conversion value of cash
and cash equivalents of overseas consolidated subsidiaries, cash and cash equivalents as of March 31, 2010,
amounted to ¥49,031 million, up ¥2,903 million from one year earlier.
Cash and Cash Equivalents,
End of Year
(¥ billion)
83.2
46.1 49.0
As of March 31
0
20
40
60
80
100
201020092008
Cash Flows from Operating Activities
Cash Flows from Investing Activities
Cash Flows from Financing Activities
-29.3 -26.2
-18.1
-7.0
-19.5
-32.2
-40
-15
10
35
60 58.2
20.5
50.3
Cash Flows
(¥ billion)
Fiscal years ended March 31
201020092008
Interest-bearing Debt
(¥ billion)
30.4
33.6 31.5
As of March 31
0
10
20
30
40
201020092008
11Brother Annual Report 2010