Small Motors for
Big Solutions

Motor for engine
peripheral equipment
RS-4F5WA

Annual Report

2014
Year ended December 31, 2014

Profile

Small Direct-Current
Electric Motors
Small, Lightweight Motors
for Big Solutions
Ever since its founding, Mabuchi Motor Co., Ltd. has been a
specialist manufacturer of small motors that deliver consistently
high quality and efficiency at low prices in line with our basic
policy “Bringing better and more reasonably priced goods to themarket.” Small motors from Mabuchi contribute to convenient,
comfortable living for people the world over as functional
components in a wide variety of applications in manyindustries, including automotive products, audio andvisual equipment, precision and office equipment, home
appliances, power tools, toys, and hobbies.
The Mabuchi Group is the world’s leading
producer of small motors. Our annual production
volume of approximately 1,465 million units(2014 results) is testimony to the excellent
reputation and trust we have built with ourcustomers and a source of great pride for us.
In the coming years, we will continue
to aspire to create new value through productdevelopment adaptable to market needs, anda flexible supply system.

1

MABUCHI MOTOR CO., LTD.

Quality Assurance
Small motors from Mabuchi play an important role in manydifferent settings in everyday life, mainly in the automotive
products industry. To enable people to use our motors
with confidence even in demanding environments, we
conduct rigorous quality testing of every aspect of productperformance, including the material quality and processing
accuracy of parts, noise, change in temperature andhumidity, and vibration.

Production
Mabuchi has established production bases across Asia with the aims of developing
a competitive motor production system and providing employment opportunities inhost countries. Furthermore, we strive to combine high quality and low cost in our
production process by seeking an optimal balance between people and machines.

Research and Development
Continuing to respond to a variety of needs with regard to motors,
primarily the ability to be highly efficient and low in noise, Mabuchi
Motor has always been leading the market in small motors.
From basic research, product development, design,and production to motor-applied technology in thesesmall machine components, Mabuchi has collected
a wide range of technical capabilities over many
years.

Market Research
We engage in market research to rapidly,
sufficiently and appropriately ascertain market
and technology trends around the world
and the motor functions that customers
require. We provide our customers with
low-cost, high-quality products andexcellent delivery response times,
while analyzing information wecollect on diverse customer needs todiscover commonalities that permit
standardization.
Annual Report 20142

Table of Contents

ProfileTo Our Shareholders
4

Message from the President

Financial Highlights
9
11
13
15
16

Financial Summary
Segment Information by Motor Application
Management’s Discussion and Analysis
Research and Development Activities
Business and Other Risks

Activities for Sustainable Management

18 Mabuchi’s Management Vision
19 Corporate Governance21	Board of Directors, Audit & Supervisory Board Members,
and Executive Officers
22 Corporate Social Responsibility

Financial Data
23
25
25
26
27
28
43

Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Net Assets
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Independent Auditor’s ReportCompany Information
44 Investor Information
45 Corporate Data

3

MABUCHI MOTOR CO., LTD.

Forward-Looking Statements
This annual report contains forward-looking
statements about Mabuchi’s future plans, beliefs,
strategies, and performance that are not historicalfacts. These statements are based on current
expectations, forecasts, estimates, and projections
about the industry in which Mabuchi operates andthe beliefs and assumptions made by its management.
As such expectations, forecasts, estimates, andprojections are subject to a number of risks,
uncertainties, and assumptions, they may cause
actual results to differ materially from thoseprojected. Mabuchi therefore cautions readers not
to place undue reliance on forward-looking
statements. Furthermore, the Company undertakes
no obligation to update any forward-looking
statements as a result of new information, future
events, or other developments.
Risks, uncertainties, and assumptions mentioned
above include, but are not limited to, exchange
rates and economic conditions; the outcome ofpending and future litigation; commodity prices;and the continuing status of financing, financial
instruments, and financial resources.

To Our Shareholders
As we look to make major leaps forward, we will steadily implement priority activities
aimed at expediting our growth strategies.

Hiroo Okoshi
Representative Director and President & CEO

Business Development and Results

In the markets in which the Mabuchi Group operates,

During the fiscal year ended December 31, 2014 (fiscal

strong demand in the U.S. and demand recovery in Europe2014), the world economy continued on a gradual recovery

compensated for sluggish demand growth in emerging

trend. The U.S. economy remained strong as improvement

countries. The Home Appliances, Power Tools, Toys, andin the employment situation led to firm consumer spending.

Precision & Office Equipment Market were stable but flat indemand in the Automotive Products Market was healthy as

developed countries and emerging countries alike. On the
The European economy continued to gradually recover,other hand, the Audio & Visual Equipment Market contin-

although there are regional differences. The sense of stag-

ued to contract.

nation in emerging countries strengthened, and economic
growth was slow.
Business conditions in Japan were weak because of the
prolonged impact of a demand decline in reaction to theconsumption tax increase.

Annual Report 20144

In fiscal 2014, the Mabuchi Group actively implemented measuresto achieve further progress with sales and market share
expansion, realizing results that will lead to future businessgrowth.

Under these business conditions, the Mabuchi GroupOperating income for fiscal 2014 was 16,875 million yen

addressed several issues: continued strengthening of the(an 80.8% increase on a year-on-year basis) due to prog-

automotive products business and new activities in theress in cost-reduction measures and an improvement in the

consumer and industrial products businesses, promotion of

product mix, coupled with a weaker yen compared with

manufacturing innovation, and establishment of new

the previous fiscal year.

production bases. Specifically, the Group actively introduced and implemented measures to achieve further prog-

Income before income taxes was 23,595 million yen (aress with sales and market share expansion, and to raise

57.1% increase on a year-on-year basis) as a result of aquality and efficiency, realizing results that will lead todecrease in extraordinary loss due to the non-recurrence of

future business growth.

an impairment loss on fixed assets recorded in the previous
fiscal year.

These measures included 1) acquisition of new customers
through the introduction of new motors for power window

Net income was 18,090 million yen (a 72.0% increase on alifters; 2) strengthening of sales of medium-sized auto-year-on-year basis) as the consolidated effective tax rate

motive motors by introducing application-specific standard

was held down by the recording of a portion of deferred

products for each application; 3) full-scale entry into thetax assets as assets at year-end, following a careful review

light electric vehicle (LEV) and commercial office equipmentof the collectability of deferred tax assets in light of thesectors; 4) labor-saving in production processes and man-Company’s operating results and future outlook.

hour reduction through expanded introduction of facilities
to rationalize production; and 5) establishment of a new
production base in Mexico.
As a result, consolidated net sales for fiscal 2014 were
122,544 million yen (a 13.0% increase on a year-on-yearbasis). Motors sales, which account for the majority ofconsolidated net sales, were 122,502 million yen (a 13.1%
increase on a year-on-year basis).

Financial Highlights
Thousands of
U.S. dollars

Rate ofchange

2014

2014

YoY

¥122,544$1,021,200+13.0%

16,875

140,625+80.8%

18,090150,750+72.0%

256,368

2,136,400+12.8%

233,312

1,944,266+11.7%

Millions of yen

2013
Net sales ¥108,401
Operating
9,335
incomeNet
10,519incomeTotal
227,253
assetsNet assets 208,791

5MABUCHI MOTOR CO., LTD.

Growth strategies and cost strategies underpin our efforts toachieving growth on a global scale.

Medium- to Long-term Management Strategy
and Issues to Be Addressed

Medium-sized automotive motors for power seats, electric
parking brakes, and engine peripheral equipment constitutea market sector for which continued increases in installation(1) Strengthening of the Automotive Products Businessrates can be expected in light of today’s emphasis on auto-

In the Automotive Products Business, the Mabuchi Groupmobile safety, comfort, and fuel efficiency. By leveraging

features a line of products optimized for key applications forhighly competitive standard products for each application,

medium-sized motors, including motors for power window

we will seize this business opportunity and increase sales.

lifters, power seats, electric parking brakes, and engine

For the power window lifter application, we will begin mass(2) Development of New Applications and Sales
Expansion in the Consumer and Industrial Products
Business

production and shipment of a new medium-torque productIn the consumer and industrial product sector, in addition tofor a new customer, a Japanese automaker. Leveraging thebusiness activities centered on existing small brush motors,

success of this operation, we will aim for a further increase in

we are reinforcing initiatives to develop and increase sales of

the number of models equipped with the new motor. Forbrushless motors in order to focus on new applications andthe new high-torque product, we will commence, as

create new demand.

peripheral equipment.

planned, mass production of a product for a major North
American automaker that will become a growth driver forWith regard to brushless motors for light electric vehicles,

the power window lifter business. Becoming an authorized

following the introduction of motors for electrically assisted

supplier for a major North American automaker for thisbicycles, for which full-scale mass production and shipment

product has opened up opportunities. We have received

have begun, we are expanding into new markets for ourinquiries from many regulator manufacturers, and we plan toapplications and have won orders for motors for assistive

begin mass production for customers in the Middle East.

equipment. We have won orders for brushless motors for
multifunction printers (MFPs) from new customers, large

We will continue to engage in global activities to expand

Japanese manufacturers, as a result of a full-scale effort bysales, as we aim to win orders from new customers bycustomers to reduce power consumption. We will continueemphasizing our track record and product competitiveness.

to expand the product line and aim to increase orders byactively engaging in sales activities.

Power Window Lifter Motor Sales Results and Forecast
Sales amount
Sales quantity (2011=100%)(Billions of yen)

30

Mid-sized Automotive Motor Sales Results and Forecast(%)(Billions of yen)

200

20

150

15

Sales amount
Sales quantity (2011=100%)

(%)

300

20

200
100

10

50

5

0

0

10

0

100

2011

2012

2013

2014

2015
Plan

0
2015
Plan
Note: Mid-sized automotive motor applications: power seats, electric parking brakes, steeringcolumn adjusters, engine air intake and exhaust, seatbelt pretensioners
2011

2012

2013

2014

Annual Report 20146

Since our application-specific standard products in theup trial production lines identical to our mass production

consumer and industrial products sector have earned alines and work to establish next-generation facilities, pro-favorable reputation for striking a good balance between

duction methods, and processes to streamline production.

performance and cost, we will work to open up additional

In addition, by having employees from our overseas produc-

new applications.

tion bases, which supply products globally, participate inthis initiative and introduce at their own production bases(3) Cost Reduction through Strengthening of Production
Technology Capabilities

optimal facilities that they themselves have helped establish,

Although the Mabuchi Group previously excelled at labor-

manufacturing.

we will undertake global deployment of next-generation

intensive production utilizing abundant labor, in response toincreases in labor costs accompanying economic develop-(5) E stablishment of a Global Production and Supply
Structure

ment in countries where production bases are located, since

In August 2014, Mabuchi established Mexico Mabuchi, a2011 we have implemented a shift from personnel to facili-

production subsidiary in Mexico, to address changes inties as a manufacturing innovation. In the first phase of thismanufacturing methods and to meet an increasing demand

shift, which ended in 2013, we achieved a target of labor-

for motor production in locations near customers’ manufac-

saving equivalent to 30% of direct employees from theturing plants, particularly among customers dealing in2010 level. To proceed with further cost reductions throughmedium-sized automotive motors, among other factors. In

manufacturing innovation, we are implementing a phase-

parallel with the construction of a plant building, Mexico

two plan to achieve further laborsaving exceeding 30%

Mabuchi will install production facilities and engage infrom the 2013 level by 2016.

personnel development utilizing the abovementioned Man-a major change in the business environment, namely sharp

ufacturing Training Hall, with the aim of beginning test
In fiscal 2014, the first year of the three-year plan, we

production of motors for power window lifters in 2015.

achieved laborsaving according to plan, exceeding 10%
from the fiscal 2013 level, not only offsetting the impact of

In addition, Kaohsiung Mabuchi, a production base inlabor cost increases but realizing cost reductions. We will

Taiwan that manufactures precision parts and production

further strengthen our production facilities with regard toequipment, will streamline a mass production system fordesign and development, fabrication, and procurement

motors for power window lifters in order to expand supply

functions and mount a groupwide effort to achieve ourcapacity to meet robust demand for these motors. Throughlaborsaving plan.

these initiatives, we will further strengthen our global
production and supply structure.

In addition, to ensure maximum impact from the production
technology strategy of shifting from personnel to facilities,
we will undertake sharp reductions in production facility
costs and lead times.

(4) Development of a Next-Generation Manufacturing
Approach
The Mabuchi Group will establish the Manufacturing Training Hall within its corporate headquarters for the purpose ofdeveloping a next-generation manufacturing approach andraising the level of its technological capabilities and personnel. To shift production from personnel to facilities andachieve high competitiveness, it is necessary for every
Mabuchi Group employee engaged in some aspect of our
production process to establish and maintain a high level ofcompetence. At the Manufacturing Training Hall, we will set

7

MABUCHI MOTOR CO., LTD.

We will proactively return profits to all shareholders.

Basic Policy on Profit Sharing, and Dividend
Payments for the Current and Next Periods

Outlook for 2015

Mabuchi maintains a basic policy of actively returning

to remain strong and for gradual recovery in the European

profits to shareholders in accordance with its businesseconomy centered on key countries to continue. In Japan,

results. We do this while also providing funds from internal

the impact of the consumption tax increase is expected toreserves for capital expenditures and research and develop-

diminish, and business conditions are expected to graduallyment, which are necessary for the growth of the Company,

recover. On the other hand, only modest growth is forecast

and while maintaining our financial soundness.

for emerging countries as a result of the gradual pace ofIn the outlook for 2015, the forecast is for the U.S. economy

recovery in business conditions in developed countries, theUnder this policy, apart from when business results are

destination for exports.

remarkably sluggish due to a sudden deterioration in thebusiness environment, we consistently distribute an annual

Regarding the markets in which the Mabuchi Group oper-

ordinary dividend of 60 yen per share as part of a long-

ates, worldwide automobile production is expected toterm stable dividend, plus an additional special dividend

grow and remain strong in the Automotive Products Mar-equal to 30% of the consolidated net income divided byket, while demand is expected to remain stable in devel-

the number of outstanding shares, depending on theoped countries and grow gradually in emerging countries in

performance of the Company.

the Consumer and Industrial Products Market.

We will continue to consider repurchasing more treasury

In addition, for fiscal 2015 (the fiscal year ending December

stocks as necessary, as a way of flexibly responding to

31, 2015) and subsequent years we have changed thechanges in the share price and the business environment,

fundamental standard for calculating dividend payments

and as a means of fulfilling our capital policy and returning

under the abovementioned profit distribution policy, from a

profits to shareholders.

consistent distribution of 60 yen per share for our annual
ordinary dividend to a payment of 30 yen per share, reflect-

It is our policy to appropriate internal reserves to further

ing the stock split in which each share of the Company’s

strengthen and deepen our existing businesses and tocommon stock was split into two shares on January 1, 2015.

invest in areas of growth, with a view to increasing corporate value.

Based on this change, for fiscal 2015 we plan to pay anannual dividend of 99 yen per share (an ordinary dividend

Under the profit distribution policy, for fiscal 2014 we paidof 30 yen and a special dividend of 69 yen). The annual

an annual dividend of 214 yen per share consisting of andividend will consist of a second-quarter dividend of 49 yenamount based on the above calculation standards (anper share (an ordinary dividend of 15 yen and a special

ordinary dividend of 60 yen and a special dividend of 154

dividend of 34 yen) and a year-end dividend of 50 yen peryen). We have already paid a second-quarter dividend of

share (an ordinary dividend of 15 yen and a special divi-

83 yen (an ordinary dividend of 30 yen and a special divi-

dend of 35 yen).

dend of 53 yen) per share, and therefore, we paid a yearend dividend of 131 yen per share (an ordinary dividend of

We look forward to the renewed support and understand-

30 yen and a special dividend of 101 yen).

ing of all shareholders in the years ahead.

Annual Report 20148

Financial Summary
Net Sales

Operating Income

Net Income¥122,544
million¥16,875
million¥18,090
millionConsolidated net sales in fiscal 2014
rose 13.0% from the previous fiscal
year to ¥122,544 million(US$1,021,200 thousand).

Operating income rose 80.8% to¥16,875 million (US$140,625
thousand).

Net Sales by Application
2013

Net Sales by Region

66,2202014

30,0002013 10,109 11,475 19,713

19,786 13,479 8,854

78,7480

The Mabuchi Group recorded a
72.0% increase in net income,reaching ¥18,090 million(US$150,750 thousand).

21,04660,00090,0002014 11,307 12,850

14,507 8,200
120,000

041,52823,62430,00025,51344,77960,00029,94090,000(Millions of yen)

Automotive ProductsHome Appliances, Power Tools & Toys
Precision & Office Equipment

120,000(Millions of yen)

Audio & Visual Equipment

Japan
North & Latin America
EuropeChina & Hong Kong
Asia Pacific

Factors Affecting FY2010–FY2014 Consolidated Operating Income
Selling, General and Administrative Expenses(Millions of yen)

SG&A

20,000
19.4%

SG&A ratio

20.3%

18.8%

16.2%

Exchange Gain/Loss
15.3%

15,00010,00016,064

15,981

15,987

17,51918,7395,000(%)(Millions of yen)

25

6,000

20

4,500

15

3,000

10

1,500

5

0

0

-1,500

5,624

5,124

3,647

-272
0

2010

2011

2012

2013

2014

Capital Expenditures
9,597

10,000

6,524

5,755

9

2013

2014

4,771

5,000

4,301
3,450

3,000

3,176

3,410

2,000

3,210

2,000
0

2012

(Millions of yen)

4,000

6,825

6,000
4,000

2011

Depreciation and Amortization(Millions of yen)

8,000

-1,036
2010

1,000
2010

2011

MABUCHI MOTOR CO., LTD.

2012

2013

2014

0

2010

2011

2012

2013

2014

Mabuchi Motor Co., Ltd. and Consolidated Subsidiaries (Years Ended December 31)
Millions of yen

Thousands of
U.S. dollars

2014

2014

2010

2011

2012

2013

¥82,752¥78,886¥85,254¥108,401¥122,544$1,021,200

Cost of sales

60,062

59,83864,21481,54686,929724,408

Selling, general and administrative expenses

16,064

15,981

15,987

17,51918,739156,158

6,624

3,066

5,052

9,335

16,875

140,625

Income before income taxes

7,291

3,248

8,426

15,01523,595

196,625

Operating income ratio (%)

8.0

3.9

5.9

8.6

13.8

–

5,260

(466)

6,385

10,51918,090150,750

Capital expenditures

3,210

6,524

6,825

5,755

9,597

79,975

Depreciation and amortization

3,450

3,176

3,410

4,301

4,771

39,758R&D expenses

3,337

3,493

3,794

3,763

4,503

37,525

Exchange gain (loss)(1,036)

(272)

3,647

5,624

5,124

42,700Net cash provided by operating activities

5,457

696

9,091

11,75018,118150,983

Net cash (used in) provided by investing
activities

8,601(2,874)

8,230

4,264

(11,977)(99,808)

Net cash used in financing activities(3,507)(3,507)(3,509)(3,031)(6,014)(50,116)

Total assets

185,408

181,351

196,702227,253

256,368

2,136,400

Net assets

174,570

168,538

181,372

208,791

233,312

1,944,266

For the year:
Net sales

Operating income

Net income (loss)

Cash flows:At year-end:

Per share data:

Yen

U.S. dollars

75.07(6.65)

91.12

150.10258.022.15

2,491.21

2,405.18

2,588.38

2,978.02

3,325.99

27.71

50.00

50.00

50.00

70.00

107.000.89

Operating income margin (%)

8.0

3.9

5.9

8.6

13.8

–

ROE (%)

3.0

(0.3)

3.6

5.4

8.2

–

ROA (%)

4.0

2.7

5.6

7.9

9.9

–

Shareholders’ equity ratio (%)

94.2

92.9

92.2

91.9

91.0

–

Number of shares outstanding(Thousands of shares)

35,03735,03635,03535,14535,144–

Number of employees (Persons)

37,46633,91829,05828,18825,354–

Net income (loss)
Net assets
Dividends payable
Other data:

Notes:
1. U.S. dollar amounts have been translated from yen, for convenience only, at the rate of ¥120=U.S.$1, the approximate exchange rate on December 31, 2014.
2. ROE is calculated by dividing net income by the average of total shareholders’ equity plus the revaluation/translation adjustment during the period.
3. The shareholders’ equity ratio is calculated by dividing the sum of total shareholders’ equity and the revaluation/translation adjustment as of the end of theperiod by total assets as of the end of the period.
4. Per share data: The Company conducted a stock split on January 1, 2015, in which each share of the Company’s common stock was split into two shares. Per
share data has been calculated based on the number of shares issued after the stock split (excluding treasury stock).

Annual Report 201410

Segment Information by
Motor Application
In fiscal 2014, the Mabuchi Group introduced a number of measures that will lead to future
growth, including the launch of new products in the automotive products business, thepromotion of manufacturing innovation, and the establishment of new production bases.
In fact, these efforts have already begun to yield results, with net sales in the automotive
products business rising 18.9% on a year-on-year basis.
Overall motor sales, which account for the majority of consolidated net sales, increased
13.1%, reaching 122,502 million yen.

64.3%

Automotive Products
Major Applications	Power window lifters, door locks, mirrors, powerseats, air conditioning damper actuators, etc.

Automotive Products Market
Net sales in this market rose sharply, to 78,748 million yen (an18.9% increase on a year-on-year basis). Owing to growth
in worldwide automobile production, combined with new
product introductions and an increase in market share, sales of
products for all applications were strong. These include sales ofmotors for power window lifters, power seats, and electronicparking brakes, applications for medium-sized motors, andsales of motors for door mirrors, door lock actuators, and air
conditioning damper actuators, and applications for compact motors.
The impact of the weak yen also contributed to the overall increase.
Net Sales by Principal Item
(100 millions of yen)

(Year-on-year change)

48
91
35
56
80

125.1%
151.9%
115.3%
135.7%

143

111.5%

167

110.5%

177212

119.9%

2013

2014

73
23
49
59
128
151

14

OthersElectric parking brakes
Air conditioning
damper actuators
Power seats
Mirrors(including folding)
Door lock actuators
Power window lifters

Net Sales by Application
Thousands of
U.S. dollars

Millions of yen

2010

2011

2012

2013

2014

Automotive
Products¥40,063 ¥40,651 ¥49,055 ¥ 66,220 ¥ 78,748

Home Appliances,Power Tools & Toys

17,337

15,792

15,695

19,786

21,046

175,383

Precision & Office
Equipment

13,821

12,58911,334

13,47914,507

120,891

Audio & Visual
Equipment

11,435

9,725

9,045

8,854

8,200

68,333

Total Sales¥82,658 ¥78,760 ¥85,131 ¥108,340 ¥122,502$1,020,850

MABUCHI MOTOR CO., LTD.

8,200$  656,233$1=¥120

11(Millions of yen)

2014

11,435

9,725

13,821

12,58917,337

15,79240,06340,651

2010

2011

9,045
11,3348,854

14,507

13,47921,046

19,786

Precision & Office
Equipment

15,69549,0552012

Audio & Visual
Equipment

Home Appliances,Power Tools & Toys
66,2202013

78,7482014

Automotive Products

17.2%

Home Appliances, Power Tools & Toys
Major Applications

Beauty-related equipment, power tools, health-related equipment, toys, etc.

Home Appliances, Power Tools & Toys Market

Net Sales by Principal Item

Net sales in this market increased to 21,046 million yen
21,046(a 6.4% increase on a year-on-year basis).19,786
Although
17,337
sales of motors for beauty-related
products, health15,792
15,695related equipment, and power tools continued to beaffected by inventory adjustments inthe market, sales increased due to theimpact of the weak yen.

(100 millions of yen)

2010

2011

2012

2013

(Year-on-year change)

63
7

2014

10

73

115.8%

7

97.9%
100.7%

10

42

41

98.9%

72

76

104.2%

20132014(100 millions of yen)

Net sales in this market13,479
increased
12,58911,334
to 14,507 million
yen (a 7.6%
increase on a year-on-year basis).
Sales of motors for inkjet printerswere strong, and the weak yen also
contributed to the increase.

13,821

2012

2013

105.1%

2014

111

2013

2014

Others

104.7%

Inkjet printers

6.7%

CD players, DVD players, etc.

(100 millions of yen)

11,4358,854

150.6%

21

106

Net Sales by Principal Item

9,045

12

Multifunction
printers (MFPs) andlaser printers

Major Applications

Audio & Visual Equipment Market

Beauty-related equipment(Year-on-year change)

8
20

Audio & Visual Equipment

9,725

Power tools

Net Sales by Principal Item

14,5072011

Health-related equipment

Inkjet printers, multifunction printers (MFPs), laser printers, etc.

Precision & Office Equipment
Market2010

Toys and models

11.8%

Precision & Office Equipment
Major Applications

Others(Year-on-year change)

6
11

5
8

8,200

93.2%
71.0%
Others

Net sales in this market decreased to 8,200 million yen (a 7.4%
decrease on a year-on-year basis). Sales of motors for CD players
in cars and DVD players decreased due to greater selectivity inaccepting orders to maximize
profitability.
2010
2011
2012
2013
2014

DVD players

70

67

2013

2014

96.2%

CD players

Net Sales by Region
Thousands of
U.S. dollars

Millions of yen

2010
Japan

2011

2012

2013

2014

¥10,069 ¥ 8,773 ¥ 9,664 ¥ 10,109 ¥ 11,307(Millions of yen)2014$   94,225

29,940

North & Latin
America

7,438

7,461

8,714

11,475

12,850107,083

Europe11,79312,362

14,211

19,71323,624

196,866

18,880China & HongKong

34,47732,13532,27041,52844,779373,158

34,47725,51318,02732,135Asia Pacific
China & Hong Kong

20,27044,77941,528

North & Latin
America

32,27019,71323,624

Asia Pacific

18,88029,940249,500$1,020,850

12,362
7,461
8,773

8,714
9,664

11,475

12,850¥82,658 ¥78,760 ¥85,131 ¥108,340 ¥122,502

11,793
7,438
10,06914,211

Total Sales

10,10911,307$1=¥120

2010

2011

2012

2013

2014

18,027

20,27025,513

EuropeJapan

Annual Report 201412

Management’s
Discussion and Analysis
Market Conditions
During the fiscal year ended December 31, 2014 (fiscal 2014), the world economy continued on a gradual recovery trend. Economic conditions in key
countries and regions were as follows:

Economic Conditions in Key Countries and Regions
United States: The U.S. economy remained strong as an improvement in the employment situation led to strong consumer spending.
Europe: The European economy continued to gradually recover, although there were regional differences within Europe.
Asia: The sense of economic stagnation in Asian countries deepened, and economic growth slowed.
Japan: Business conditions in Japan were weak because of the prolonged impact of the drop in demand in the wake of the consumption tax increase.
The conditions in the markets in which the Mabuchi Group operates were as follows:

By Application
Automotive Products Market: Demand in the Automotive Products Market was healthy, as strong demand in the U.S. and demand recovery in Europe
compensated for sluggish demand growth in emerging countries.
Home Appliances, Power Tools, Toys, and Precision & Office Equipment Market: The Home Appliances, Power Tools, Toys, and Precision & Office
Equipment Market were stable but flat in the U.S. and Europe, and Asia alike.
Audio & Visual Equipment Market: The Audio & Visual Equipment Market continued to contract.

Operating Results
Net Sales

Operating Income

Income before Income Taxes

The sales results for fiscal 2014 were 1,465
million units (a 0.3% increase on a year-onyear basis) and ¥122,544 million (a 13.0%
increase on a year-on-year basis).

Operating income for fiscal 2014 was ¥16,875
million (an 80.8% increase on a year-on-yearbasis).

Income before income taxes was ¥23,595
million (a 57.1% increase on a year-on-yearbasis).
— A decrease in extraordinary loss was recorded
due to the non-recurrence of an impairment
loss on fixed assets recorded in the previous
fiscal year.

— Automobile demand was strong, led by themarkets in North America and emerging
countries, and sales growth contributed to theoverall increase in the Company’s businessresults.
— In the consumer and industrial products
businesses, although sales volume declined due
to greater selectivity in accepting orders tomaximize profitability, net sales increased as aresult of an improved product mix and yen
depreciation.

Net Sales/Gross Profit Margin(Millions of yen)

29.1

27.4
24.1

24.7

78,886Net Income
Net income was ¥18,090 million (a 72.0%
increase on a year-on-year basis).
— The consolidated effective tax rate was held
down by the recording of a portion of deferred
tax assets as assets at year-end, following a
careful review of the collectability of deferred
tax assets.

Operating Income/Operating Income Margin

Net Income (Loss)/ROE(Millions of yen)

(Millions of yen)

13.8

8.2

24.8
122,544

8.6

8.0

108,401
82,752— Earnings increased by ¥0.2 billion due to anincrease in sales volume.
— Earnings increased by ¥2.5 billion due to an
improved product mix.
— Earnings increased by ¥2.5 billion due to adecrease in costs.
— Earnings increased by ¥0.5 billion due to adrop in commodities prices (copper, steel, andprecious metals).
— Yen depreciation contributed to the increasein earnings by ¥1.8 billion.

3.9

85,254

5.4

16,875

5.9

10,519

-0.3

9,335
6,624

6,385

5,260

5,052

18,090

3.6

3.0

3,066
- 466

2010

2011

2012

2013

2014

Gross profit margin (%)

2010

2011

2012

2013

2014

2010

2011

2012

2013

ROE (%)

Operating income margin (%)

Analysis of Operating Income

Cost decrease¥2.5 billion
Sales quantity
increase¥0.2 billion

Fiscal 2013 Results¥9.3 billion

13

MABUCHI MOTOR CO., LTD.

Improvement inselling prices andproduct mix¥2.5 billion

Decrease incommodities prices(copper, steel,precious metals)¥0.5 billion

Foreign exchange¥1.8 billion

Fiscal 2014 Results¥16.8 billion

2014Financial Position
AssetsLiabilities

Net Assets

Total assets as of December 31, 2014 stood at¥256,368 million, an increase of ¥29,114
million from the previous year-end.
— An increase in cash and bank deposits of¥9,755 million— An increase in trade notes and accounts
receivable of ¥3,880 million— An increase in inventories of ¥4,895 million— An increase in property, plant and equipment of ¥8,994 million due to capital expenditures and yen depreciation

Total liabilities stood at ¥23,055 million, an
increase of ¥4,593 million from the previous
year-end.
— An increase in trade notes and accounts
payable of ¥1,398 million— An increase in other current liabilities of¥1,600 million— An increase in net defined benefit liability,
accompanying the application of the accounting standard for retirement benefits, of ¥1,461
million— A decrease in allowance for retirement
benefits for employees of ¥484 million

Total net assets increased ¥24,520 million fromthe previous year-end, to ¥233,312 million.
— An increase in retained earnings of ¥12,116
million— An increase in foreign currency translation
adjustments of ¥13,242 million due to yen
depreciation

Total Assets

Liabilities

Net Assets(Millions of yen)

(Millions of yen)

(Millions of yen)

256,368

185,408

181,351

208,791

196,702

18,461

2011

174,570

168,538

2010

2011

15,33010,838

2010

233,31223,055

227,253

2012

2013

2014

2010

181,372

12,813

2011

2012

2013

2014

2012

2013

2014

Cash FlowsNet Cash Provided by Operating
Activities¥18,118 million (compared with net cash
provided by operating activities of ¥11,750
million from the previous fiscal year)— An increase in income before income taxesof ¥8,579 million

Net Cash Used in Investing Activities

Net Cash Used in Financing Activities¥11,977 million (compared with net cash
provided by investing activities of ¥4,264
million from the previous fiscal year)— An increase in purchases of short-term
investments and investment securities of¥2,455 million— A decrease in proceeds from sales ofshort-term investments and investment securities of ¥8,529 million— An increase in purchase of fixed assets of¥4,180 million due to the establishment of a
new company and new capital expenditures¥6,014 million (compared with net cash used infinancing activities of ¥3,031 million from theprevious fiscal year)— An increase in cash dividends paid of ¥2,357
millionAs a result, the balance of cash and cash
equivalents amounted to ¥109,220 million, an
increase of ¥6,758 million from the previous
year-end.

Outlook
Our forecasts for the full-year business results
for fiscal 2015 (the fiscal year ending December 31, 2015) are as follows:
Consolidated Results Forecasts (Comparedwith the Previous Period)
Net sales: ¥133,000 million (8.5% increase)
Operating income: ¥19,300 million (14.4%
increase)
Net income: ¥16,100 million (11.0% decrease)
The above forecasts assume an exchange rateof 1 USD = 108 JPY. No allowances have been
made for foreign exchange gains or losses.

Fiscal 2015 Market Conditions

Summary• The outlook is for a strong North American economy andgradual recovery in key countries in Europe, despite a senseof uncertainty.
• A slowing of the economic growth rate in emerging
countries is likely to continue.

Automotive
Products• Worldwide automobile production volume is expected torise by 4% from fiscal 2014.
• Demand is likely to be strong in North America, Europe,and China.

Consumer andIndustrial
Products• Demand for home appliances and power tools is likely to bestable.
• Although the personal-use products market is likely to besluggish, demand for precision and office equipment fromthe business-use market is likely to recover.

Annual Report 201414

Research andDevelopment Activities
automaker in North America for a model currently under development.
To address the technological and sales expansion requirements of theseand other models, we are currently ramping up our technical service
personnel.

The Mabuchi Motor Group’s R&D activities are spearheaded by Mabuchi
Motor Co., Ltd. (the parent company) and MABUCHI MOTOR (DONGGUAN) CO., LTD. (in the Asia segment). In this section, we provide an
overview of the Group’s R&D activities.
The R&D organization consists of the Research and Development
Headquarters and its subordinate organizations: the Research andDevelopment Dept. 1, the Research and Development Dept. 2, and theProduction Engineering Dept. In addition, the Research and Development Headquarters directly controls groups that engage in activities
pertaining to fundamental technology, intellectual property, test evaluation, technology research, and engineering management. The organization engages mainly in high-value-added work, including the development of elemental technologies based on the Group’s technology
roadmap, described below, as well as new product development centered on strategically important applications. From its inception, theResearch and Development Center of MABUCHI MOTOR (DONGGUAN)
CO., LTD. (the “R&D Center”) has mainly engaged in design improvement work. The R&D Center also handles new product development
aimed at rapidly launching products in the Chinese local market, as well
as new product development tasks entrusted by the Company.
To materialize timely new product development and new productintroductions, Mabuchi has prepared the technology roadmap based on
information obtained from market research and benchmarking-based
technical investigation, and is steadily developing elemental technologies
in accordance with the roadmap. In fiscal 2014, we further strengthened
our R&D system, having established a Cross-Functional Team (CFT) in
the previous fiscal year to spearhead initiatives across departmental lines.
Through these activities, we have now clearly identified technologies
that we need to acquire and strengthen, as well as product fields that
we should target. Going forward, we will further reinforce our tacticalstructure and our response personnel.
Mabuchi is focusing particular attention on the strategies described
below for examination and implementation of urgent measures, with theaims of strengthening its responsiveness to new motor-related fields andapplications and addressing the steep rise in labor costs in overseas
countries where it operates plants.

Motors for power seats
Mabuchi’s introduction of distinctive, small, high-torque motors for
power seats has led to increased adoption by large customers and sharp
growth in sales and market share. Targeting further increases in costcompetitiveness, in fiscal 2014, we started mass production of a new
motor (described later) and launched it on the market.

Motors for other small automotive applications
For some time, Mabuchi has been highly competitive in the field ofcompact, high-torque models featuring low vibration and low mechanical noise. In addition to rolling out these models in this field, we havelaunched new offerings equal in size to existing models but with lower
vibration and lower mechanical noise.

Motors for light electric vehicles
In addition to being a growth sector, motors for light electric vehicles(LEVs) serve as welfare equipment and thus make a huge contribution tosociety. In the previous fiscal year, we launched our first model in thisfield—the 700W IS-94B brushless motor, which is being adopted inelectrically assisted bicycles. In addition to increasing sales of the IS-94B
to electrically assisted bicycle makers, we are actively promoting its
adoption in welfare equipment, gardening equipment, and the like.
In regard to existing models for other markets, Mabuchi will continue
harnessing its know-how to improve its product features while promoting remodeling to enhance added value. At the same time, we will
deploy the aforementioned R&D Center to build a structure for promptly
meeting market and customer needs.
In fiscal 2014, R&D expenses amounted to ¥4,503 million. At fiscal
year-end, the total number of industrial property rights held by theCompany stood at 638 (109 in Japan and 529 overseas), and the total
number of domestic and overseas new industrial property applications
during the year was 62. A total of 432 employees engaged in R&D activities (246 at our headquarters and 186 at the R&D Center of MABUCHIMOTOR (DONGGUAN) CO., LTD.).
Below are major new products launched in fiscal 2014:(1) Strengthen our expertise in circuit design technologies to increase ourmarket share for brushless motors (a high-priority sector)(2) A dopt innovative perspectives to broaden the application of major
reductions in production line workers(3) Reduce product development lead-times and work processes by half(4) Strengthen and broaden the application of optional mechanism
attachment technologies(1) Motor for power seats using ferrite magnet (RZ-46B)
This is a compact, lightweight, high-torque motor featuring an
optimized design for magnetic circuits—a Mabuchi strength—without
the need for high-priced rare earth magnets. The use of ferrite
materials, which offer stability in supply and prices, also facilitatesefforts to make car bodies lighter.

Meanwhile, our technology and sales teams will join forces to addressapplications in our core automotive motor business and applications that
we must concentrate on in businesses earmarked to become operationalpillars in the future.

(2) Motor for engine peripheral equipment (RS-4F5)

Motors for power window lifters

This motor addresses the harsh conditions affecting automobile
engines (temperature, vibration), and functions as an electronic
control for the various valves and pumps of an automobile, contributing to better fuel efficiency and the reduction of harmful exhaustemissions.

Thanks to increasing sales to large-scale customers in Japan and overseas, sales of motors for power window lifters exceeded ¥20 billion in
fiscal 2014, making this a core business for the Group. In fiscal 2013, we
set up production of the GD-558, a compact, lightweight power window
lifter motor, and we acquired certification as a supplier from a major

R&D Expenses/R&D Expenses Ratio

R&D Personnel

Number of Intellectual Properties(Millions of yen)

(Persons)(Intellectual properties)

4.0

4.4

4.5
3.5

3.7
4,503

3,337

2010

3,493

2011

3,794

2012

MABUCHI MOTOR CO., LTD.

386

414

425

432

2013

2014

2010

2011

624

607

600

108

99

95

473

516

508

505

2010

2011

2012

2013

591
118

3,763

R&D expenses ratio (%)

15

368

2012

2013

2014

Overseas

Domestic

638
109

529

2014

Business and Other Risks
Changes in Economic Conditions
The demand for Mabuchi products, which are incorporated into our customers’ products, is influenced by the economic conditions
present in the diverse markets in which the Mabuchi Group sells. Consequently, the Group’s business results and financial position may
be adversely affected by economic recessions and the corresponding contraction in demand in its key markets, including Japan, North
America, Europe and Asia.

Fluctuations in Foreign Exchange Rates
Items denominated in local currencies on the financial statements of our overseas subsidiaries are converted into Japanese yen when
the consolidated financial statements are prepared. Consequently, amounts which are to be recorded after being converted into
Japanese yen are subject to the foreign exchange rates at the time of conversion. In particular, appreciation of the Japanese yen
against the U.S. dollar will have a negative effect on the Mabuchi Group’s consolidated business results, and conversely any
depreciation of the Japanese yen will have a positive effect.
Appreciation of local currencies in regions where the Group carries out production will push up manufacturing and procurement
costs which are denominated in those local currencies. Increased costs will lower the Group’s profit margins and price competitiveness,
and will impact negatively on its business results.

Development of New Products and New Technologies
The development and sale of new products, by their very nature, involve both complexities and uncertainties, and include a broadarray of risks.
In the event the Mabuchi Group cannot fully predict the changing needs of the market, or cannot develop appealing new products
in a timely fashion, or in the event a technological innovation emerges which causes its products to become obsolete, then the Group’sbusiness results and financial position may be subject to significant adverse effects.

Price Competition
Our customers are businesses in a diverse range of sectors that belong to the electrical and electronic equipment and machinery
manufacturing industries, and price competition in these industries is extremely severe. In these kinds of environments, prices are amajor contributing factor to competition in all sectors, and with the prominence of rival Chinese manufacturers, competition is
becoming even more intense.
If our cost-reduction activities cannot keep up with falling prices over the long-term, then the Mabuchi Group’s business results
and financial position may be subject to significant adverse effects.

Potential Risks in International Economic Transactions and in Expanding Business Overseas
The majority of the Mabuchi Group’s business activities are conducted in the various countries in Europe, North America and Asia.
Within these overseas business activities there are certain inherent risks, including changes in political and economic environments,
undeveloped infrastructures, changes in laws, tax affairs or various other systems, or social unrest.
For example, much of the Group’s production activity is conducted in China and Vietnam. The occurrence of an unexpected event(such as changes in the political or legal environment, changes in economic conditions, problems related to the employment
environment, or other changes to the social environment) may lead to significant problems for our production and/or sales activities,
and these may lead to the Group’s business results and financial position being subject to significant adverse effects.

Annual Report 201416

Product Quality
There is no guarantee that all Mabuchi Group products will have no major quality issues. If a quality issue occurs, the amount ofcompensation may be influenced by the effect on the quality of the final product in which the Mabuchi product is incorporated. The
unlikely event of a product defect that leads to a large-scale product complaint, recall or product liability compensation may trigger an
accrual of a large amount of costs or a downturn in sales due to a loss of credibility, and may have significant adverse effects on theGroup’s business results and financial position.

Protection of Intellectual Property
We recognize that the acquisition of intellectual property can greatly influence the growth of the Mabuchi Group. However, in certain
regions, for certain inherent reasons, the Group’s intellectual property rights may not be completely protected. In such instances, theGroup’s intellectual property may be used without authority by third parties, and through the manufacture of similar products, we may
suffer damages. Or we may lose our competitive advantage through the outflow of other technology or expertise, and then having it
exploited by other companies. Or even still, there is a possibility that it could be claimed that the Group has impinged on theintellectual property of another company.
The failure of protection or the violation of intellectual property rights, or the outflow of other intellectual property may lead to theGroup’s business results and financial position being subject to significant adverse effects.

Securing and Developing Human Resources
The Mabuchi Group operates in a highly competitive corporate arena. This situation renders essential the recruitment and developmentof employees who are highly skilled in related areas: engineers with specialist scientific and technological expertise, and managers with
top business strategy acumen and executive capacities. The Group is fully cognizant of the need for the continuous enhancement andimprovement of its human resources for the next generation and beyond. Meanwhile, the Group should put in a great deal to recruitand develop such a workforce.
The failure to recruit and cultivate such a workforce on an ongoing basis through the requisite expenditure and long-term humanresource development vision would invite adverse impact on the Group’s future performance and financial position.

Procurement of Raw Materials
Depending on the type of raw material that the Mabuchi Group procures from external sources, we may be dependent on a limited
number of suppliers.
There is a possibility that supply of the raw material is suspended due to an accident befalling the supplier or for some otherreason, or that a shortage of supply transpires due to a sudden upsurge in demand. If such conditions were to continue long-term andalternative materials were not easily available, then there is a possibility that the Group’s production activities would be affected
dramatically, and in turn this would undermine the assurance of delivery and quality of products to its customers. It is also possible,that the prices of such materials would escalate, which would trigger a rise in manufacturing costs.
If such an event were to occur, then the Group’s business results and financial position may be subject to significant adverse
effects.

Natural Disasters and Accidents
The Mabuchi Group has established a system of international division of labor. We conduct business activities in countries throughout
the world, and we own facilities and equipment at our various bases, including plants and offices. The Group has implemented
measures to prevent its exposure to risks associated with the occurrence of disasters and accidents at these centers, and it has
implemented measures to reduce damages, including by insuring. However, there is no guarantee that completely protects us against,
or which can reduce as planned, the effects of disruptions to our business activities caused by disasters or accidents at our Head Office
or individual bases. In the event that these kinds of unforeseeable events occur, the Group’s business results and financial position may
be subject to significant adverse effects.
17

MABUCHI MOTOR CO., LTD.

Activities for Sustainable
Management
The “Management Principle” of Mabuchi Motor encompasses the belief that we at Mabuchi
must elevate our level of contribution to society and persevere as a prominent entity the world
cannot do without. This principle is not only a guide for running our corporation but a gene to
be carried down to subsequent generations of the Mabuchi enterprise.

Mabuchi’s Management Vision
MANAGEMENT PRINCIPLE
Contributing to International Society and Continuously Increasing Our Contribution
Mabuchi believes that a company can continue to exist and grow only if its business activities contribute to society on
an ever-expanding basis. It goes without saying that a company cannot expand or even remain in business unless it
generates profits. However, profit is not Mabuchi’s sole management objective.
Our ultimate objective is to continue raising our level of contribution to society through our business activities andremain a company that society considers essential. This management principle is at the core of all our activities,
unchanging through time andirrespective of the people at the
management helm.

Our Missions

Mabuchi’s missions embrace a set of values for all Mabuchi Group
employees to share in overcoming various difficulties and conflicts
that occur in carrying out their duties and achieving further growth.

MANAGEMENT GUIDELINES
Mabuchi’s management guidelines, which flow from ourmanagement principle, spell out specifically how we “contribute.”
These guidelines outline the mission of Mabuchi’s business activities.

MANAGEMENT POLICIESMabuchi’s management policies provide guidelines for its corporate
activities, which are a starting point for creating value and lead togreater levels of social contribution and achieving sound growth.

MANAGEMENT SCHEME

Our Management Vision

Based on Mabuchi’s business policy of maximizing the potential ofsmall DC brush motors as our core business, we mobilize ourorganizational skills and promote business activities in which we cancontinuously exert a unique “Mabuchi-ism” that cannot easily beemulated. Naturally, we do not aim at diversification without
contributing to society, namely, diversification only to expand sales.
We generate revenues and profits as a result of our contributions tomarkets in which we are truly welcome. We plan to continue
reflecting this management philosophy, which has served us well in
the past, into the future.
Annual Report 201418

Corporate Governancesocial impartiality and are fundamental to living up to the trustand expectations of all stakeholders; andBasic Approach to Corporate GovernanceWe understand that realizing this principle is our raison d’être,and we recognize that corporate governance comprises theorganizational/management systems and various managerial
measures that support those systems. Accordingly, we believethat the fundamental objective in establishing and implementing
an appropriate corporate governance framework is to further theinterests of our shareholders and other stakeholders on an ongoingbasis through the creation of fair profits and the enhancement ofcorporate value.
Constructing and maintaining a corporate governance systemalong the lines given below are indispensable for Mabuchi as alisted company.
1. To clearly separate management decision-making and efficientbusiness execution, and to clarify the scope of accountability;
2. To build and operate a sound internal control system, namely, toeffectively work the internal check system and the management
supervision system;
3. To appoint a suitable number of independent officers whose
interests do not conflict with those of general shareholders toensure the objectivity and neutrality of management supervisionfunctions;
4. To foster a corporate culture in which all Group employees
recognize and share the understanding that the practices ofcorporate ethics and compliance support the organization’s

5. To disclose corporate information to all shareholders and otherstakeholders in an appropriate, fair, timely and clear mannerand to ensure accountability through the Board of Directors, theAudit & Supervisory Board, and other bodies.
The Mabuchi Group employs a simple corporate management
structure by establishing a corporate group consisting of Mabuchi
Motor Co., Ltd., and its wholly owned subsidiaries as well as
focusing and specializing its business resources on and in the small
DC motor business. The Mabuchi Group employs the Audit &Supervisory Board System as the best-suited organizational design
after considering such matters as directors’ duties, management
efficiency, and the maintenance of a management supervisorysystem that is appropriate to the above business contents andcorporate management structure.

Outline of Corporate Institutions
Board of Directors and Executive Committee
Significant management decision-making is carried out by the
Board of Directors, consisting of six inside directors and two
independent outside directors who are familiar with the Company’s
management environment and business. The Board of Directors
quintessentially serves the functions of management decisionmaking and supervision of the execution of directors’ duties
and, as required by laws and ordinances, reporting on important

General Meeting of Shareholders
Appoint/Dismiss
LiaiseIndependent
Auditors

ReportAudit & Supervisory Board
Advise(Including three outside Audit &Supervisory Board members/
independent outside officers) Audit

Department for Audit &Supervisory Board Members

ReportDirectInternal Reporting
SystemAdviseMABUCHI MOTOR CO., LTD.

Group Ethical Standards

Other Supervisory Frameworks

Consult
Executive Committee(Executive Managing Officers)(One Director in
Charge of Internal Control)

Company Departments(Responsible for Compliance)

19

Basic Policy on Internal Control

Supervise

ExecuteInternal
Audit

Group Management Vision

Subsidiaries(One Director in Chargeof Compliance)(Internal Audit Committee)

Meeting of Head of Group Offices(Risk Management Committee)

ReportManagement Principle

ReportRepresentative Directors

Internal Audit Department

Accounting
Audit

Board of Directors(Including two outside directors/
independent outside officer)• Environmental Management
Committee (Audit of the Environmental
Management System)• Quality Management Committee (Auditof the Quality Management System)• Design Reviews• Division of Duties/Company Rules andRegulations• Ringi System and Other Regulations• (Subsidiaries) Regulations on Powers ofApproval

executive management decisions and conditions. Responsibility forexecuting decisions that have been made by the Board of Directors
is transferred to the representative directors and the executive
officers. The Board of Directors convenes regularly once a monthand at other times as required.
The Company deems that the independent outside director
shall act in a supervisory and advisory role to the Company’s
management at the Board of Directors’ meetings to not only ensure
but also enhance transparency.
Mabuchi has established an Executive Committee, primarily
composed of executive officers, with the objectives of supporting
the functions of the Board of Directors, conducting preliminary
consultations relating to important issues for deliberation by the
Board of Directors, carrying out executive business decision-making
outside the scope of the Board of Directors’ legal powers, andreporting on executive business conditions. This arrangement
enhances the Board of Directors’ function, as it allows the Board toprioritize deliberation of reports and proposals, making decisions
on these topics and monitoring and supervising the execution ofduties. The Executive Committee meets regularly twice a month.
In addition, Mabuchi has introduced an Executive Officer
System that centralizes strategic decision-making and supervisionfunctions on directors and delegates powers and responsibilities to
executive officers for the everyday execution of their duties. Thissystem serves to enhance the functions of both directors and theexecutive officers.

Audit & Supervisory Board
Mabuchi has appointed four Audit & Supervisory Board members,
three of whom are outside members with a high degree of
independence. Mabuchi has also established a department for
Audit & Supervisory Board members and has made it possible for
the Audit & Supervisory Board members to request audit-related
assistance from employees of the Internal Audit Department andother departments where appropriate.
The Audit & Supervisory Board members (three of whom areoutside members) carry out audits of the execution of duties bydirectors and other bodies in accordance with legal stipulations
and the auditing standards, policies, plans, and apportioned duties
determined by the Audit & Supervisory Board. Specifically, Audit &Supervisory Board members attend meetings of the Board of
Directors and the Executive Committee as well as other important
meetings and oversee major business execution decisions anddocumentation related to their execution, if necessary, requesting
directors and employees to provide such documents or submit
reports, in order to audit and supervise the execution of duties
by the directors. The Audit & Supervisory Board convenes every
second month and holds regular monthly meetings for theexchange of opinions between Audit & Supervisory Board members
along with essential deliberations regarding the execution of duties
by directors.

Internal Audit Department
Mabuchi has established an Internal Audit Department under the
direct control of the president. This body liaises with the Audit &Supervisory Board (members), the Director Responsible for Internal
Control, and the Internal Control Department on a timely basis
and conducts ongoing supervision of the upgrading, running, andeffectiveness of the internal control framework for Mabuchi and
its Group companies. The Internal Audit Department reports its
findings to the president, directors, and Audit & Supervisory Board
members.

Internal Control System
In accordance with the Basic Policy on Internal Controls approved
at a meeting of the Board of Directors under the provisions of theCompanies Act, Mabuchi is working to establish an internal control
system that includes systems for risk management, complianceassurance, document management, Group management, and Audit& Supervisory Board members’ audits. In this way, inadequacies ininternal controls and other issues discovered in risk management
activities, compliance activities, Audit & Supervisory Board
members’ audits, and internal audit activities are reported to thedirectors and Audit & Supervisory Board members on a periodic
or nonperiodic basis, and appropriate corrective measures aretaken in a timely manner. These efforts provide the Company
with a framework for continuously enhancing the functioning
and effectiveness of the internal control system. By establishingand ensuring the appropriate application of internal regulations
governing the approval system, job authority and division of
responsibilities, and other matters, the Company seeks to further
ensure the appropriate conduct of business. These various internalmechanisms serve to support the directors and Audit & Supervisory
Board members in their monitoring and supervision of the conductof business by directors.

Risk Management System
In accordance with the Basic Policy on Internal Controls, Mabuchi
has designated an executive officer with overall control overrisk management and the departments responsible for risk
management; has prepared and established internal rules andprocedures necessary for appropriate management of risk; andhas taken necessary measures, including informing and educating
employees about risk management.
In addition, Mabuchi has established the Risk Management
Committee, whose members are the persons responsible forrisk management at each company department and subsidiary;
has made possible cross-organizational activities concerning risk
awareness and assessment in routine business activities, risk
response, and information provision; and has put in place a Group
Emergency Response System to prepare for contingencies, with theobjective of protecting all the Group business activities in the eventof an emergency.
Furthermore, the Internal Audit Department periodically audits
the status of risk management and reports the audit results to theBoard of Directors and Audit & Supervisory Board. The Board of
Directors reviews the report and takes any necessary measures.
In this way, Mabuchi pursues continuous improvement of the risk
management system.

Disclosure of Corporate Management Data
Mabuchi’s basic policy is to strive to carry out impartial, timely,
and clear information disclosure to ensure a fair evaluation of theCompany’s corporate value and to gain the trust of its shareholders
and investors. We innovate and improve our information disclosure
to ensure highly effective data delivery that will cultivate broad
understanding of the Company’s business activities.

Annual Report 201420

Board of Directors, Audit & Supervisory Board
Members, and Executive Officers(As of March 27, 2015)

Directors

Shinji Kamei

Hiroo Okoshi

Tadashi Takahashi

Masato Itokawa

Representative Director
and Chairman

Representative Director
and President & CEO

Director
Managing Executive Officer andGeneral Manager of Researchand Development Headquarters

Director
Executive Officer and General
Manager of Quality Assurance
Dept., in charge of Quality andEnvironmental Management

Tadahito Iyoda

Hirotaro Katayama

Iwao Nakamura

Ichiro Hashimoto

Director
Executive Officer and General
Manager of Administration
Headquarters, in charge ofInternal Controls

Director
Executive Officer and General
Manager of Operations Control
Headquarters, in charge of
Production Bases Control

Director (Outside)

Director (Outside)

Audit & Supervisory Board Members

Masahiro Gennaka

Keiichi Horii

Nobutaka Motohashi

Toru Masuda

Audit & Supervisory Board
Member (Full-time)

Audit & Supervisory Board
MemberAudit & Supervisory Board
MemberAudit & Supervisory Board
MemberExecutive Officers (excluding those also serving as directors)

21

Tsuyoshi Nakamura

Eiji Uenishi

Akihiko Kitahashi

Katsuhiko Katayama

Executive Officer
General Manager of Sales andMarketing Headquarters

Executive Officer
Deputy General Manager ofResearch and Development
Headquarters

Group Executive Officer
in charge of Taiwan BusinessGroup Executive Officer
in charge of China Business

MABUCHI MOTOR CO., LTD.

Corporate Social Responsibility
Mabuchi Motor recognizes that its key responsibilities as a corporation are to benefit society
and bring joy to people. With this in mind, we pursue a variety of initiatives on a daily basis.
Through our business activities, we deliver new levels of value to society. At the same time,
we promote various social contribution activities unique to Mabuchi that effectively convey
the importance and worth of product manufacturing.

Making environment-friendly products
We relentlessly exploit the potential of motors and improve theirvalue in order to provide better and cheaper products in a morereliable way. For end-users, we aim to make our products lighter,more compact, and more energy-efficient, while helping saveresources and energy to benefit society as a whole.
• GD–558 (Motor for Power Window Lifters)
This motor is around 14% shorter and 15%
lighter than existing products. With reduced
weight, it also contributes to better fuel efficiency
and lower costs.
• RZ–46B (Motor for Power Seats)
This is a compact, high-torque motor featuring an
optimized design for the time circuit, as well as
using ferrite instead of neodymium for the magnet.
With reduced weight, it also contributes to better fuel efficiency.
• ID (Motor for MFPs)
Addressing the need in the multifunction
printer (MFP) market for lighter, more compact and more energy-efficient products, thismotor helps save resources and energy.

Support for Manufacturing / Education
Mabuchi aims to contribute to the development of society byextending various types of support to local communities and society
at large. As one such activity, we provide educational support to theyoung, who are our future leaders, to help them grow up surrounded by the joy of science and manufacturing.
• Robot Contest Sponsorship
Mabuchi has been co-sponsoring the
National Technical College Robot Contest
and the ABU Robot Contest since 2002
and the College Robot Contest since2004 by providing motors and funding.
We support these events in the hope that we can help to foster
future engineers and the development of science and technology.
• Promoting Science Education
Each year Mabuchi provides a large number of learning materials to
support science education. In 2014, Mabuchi provided approximately
18,000 motors as well as samples of handicrafts powered by
motors. These learning materials are put to good use in scienceclasses at public elementary schools in Matsudo City and at handicraft workshops held by numerous educational institutions all overJapan.
• Technical Staff Teaching Children
Seeking to help children experience thejoys and wonders of science andunderstand how knowledge learned inscience class contributes to their lives,
Mabuchi has been dispatching staff toteach children about science since 2008. In 2014, we held classes atthree elementary schools in Matsudo City in Chiba Prefecture andat the Science Museum in Tokyo.
Using Mabuchi-made motors as learning tools, the children
gained hands-on experience in disassembling and examining
motors, while learning how electromagnetic properties are used inrotating mechanisms and to generate electricity.
We also exhibited actual products that incorporate motors toshow the children how extensively motors are used in our daily lives.
• Summer Vacation Handicraft Workshops
Every year since 2008, Mabuchi has held Summer Vacation Handicraft Workshops for parents and children to provide kids—our
future leaders—with experience in the magnificence of making
things and in the mysteries of science, thus
stimulating their interest in manufacturing.
During the summer holidays, we invited
approximately 160 parent–child pairs to use
motors as power generators to create
handicrafts from readily available wastematerials such as discarded CDs and PET
bottle caps. As of 2014, the event has
attracted more than 1,000 attendees.
• Internship Program
We offer an internship program tocollege students as an opportunity to
deepen their understanding of Mabuchi
through actual work on-site.
We accepted technical college students and college students
from the U.S. in 2014. Dongguan Mabuchi also accepted graduate
students throughout the year.
• Scholarships and Support for School Construction
Dalian Mabuchi and Daojiao Mabuchi are providing educational
support by constructing school buildings andproviding scholarships. This contribution has
been commended by the local
government on more than
one occasion.
Left: Books and exercise equipment
donated to Hope Elementary Schools(Dalian Mabuchi)
Right: School supplies for children(Daojiao Mabuchi)

Social contribution activities
The Company facilitates
regular visits of the elderly
and children, as well as
providing support for the sick.

Annual Report 201422

Consolidated Balance Sheets
Mabuchi Motor Co., Ltd. and Consolidated Subsidiaries
December 31, 2013 and 2014

Yen
(Millions)

U.S. Dollars(Thousands)

2013

2014

2014

¥101,053¥110,808$  923,400

19,45323,333

194,441

(58)

(67)

(558)

Short-term investments

12,113

12,414103,450

Merchandise and finished goods

16,81920,179168,158

Work in process

1,262

1,585

13,208Raw materials and supplies

6,071

7,283

60,691

Deferred tax assets – current

685

1,635

13,625

3,461

3,980

33,166

160,862

181,154

1,509,616

Land

6,029

6,031

50,258

Buildings and structures

43,83147,253393,775

Machinery and equipment

45,80656,719472,658

Construction in progress

2,163

4,370

36,416

97,830114,375

953,125(52,816)(60,366)(503,050)

45,01454,008450,066

19,176

18,885

157,375

Long-term loans receivable

20

2

16

Deferred tax assets – non-current

325

367

3,058

Other investments and other assets

1,853

1,950

16,25021,376(21,205)(176,708)¥227,253¥256,368$2,136,400

ASSETS
Current Assets:
Cash and bank deposits
Trade notes and accounts receivable
Less – Allowance for doubtful accounts

Other current assets
Total current assets

Property, Plant and Equipment:Less – Accumulated depreciation
Property, plant and equipment, net

Investments and Other Assets:
Investment securities

Total investments and other assets

Total Assets

23

MABUCHI MOTOR CO., LTD.

Yen
(Millions)

U.S. Dollars(Thousands)

2013

2014

¥  5,637¥  7,035$    58,625

Short-term loans payable

113

113

941

Accrued income taxes

2,241

3,079

25,658

Accrued bonuses due to employees

220

192

1,600

Accrued bonuses due to directors

74

127

1,058

Deferred tax liabilities – current

49

58

483

6,719

8,319

69,325

15,05518,926

157,716Long-term loans payable

397

283

2,358

Provision for retirement benefits for employees

484

–

–

Liability for retirement benefits

–

1,461

12,175

Asset retirement obligations

22

17

141

2,193

2,095

17,458

308

271

2,258

Total long-term liabilities

3,406

4,129

34,408

Total liabilities

18,461

23,055

192,125

Net Assets:
Shareholders’ Equity
Common stock, no par value:
Authorized: 200,000,000 shares
Issued: 75,751,762 shares in 2013
75,751,762 shares in 2014
Additional paid-in capital

20,704
20,41920,704
20,419172,533
170,158

Retained earnings

180,490

192,606

1,605,050

Treasury stock, at cost: 5,650,830 shares in 2013 and5,619,828 shares in 2014

(20,084)(20,010)(166,750)

201,529

213,720

1,781,000

Net unrealized holding gains (losses) on securities

2,162

1,968

16,400Foreign currency translation adjustments

5,069

18,311

152,591

Retirement benefits liability adjustments

–

(742)

(6,183)

7,232

19,537

162,808

29

54

450

Total net assets

208,791

233,312

1,944,266

Total Liabilities and Net Assets¥227,253¥256,368$2,136,400

LIABILITIES AND NET ASSETS

2014

Current Liabilities:
Trade notes and accounts payable

Other current liabilities
Total current liabilities
Long-term Liabilities:

Deferred tax liabilities – non-current
Other long-term liabilities – non-current

Total shareholders’ equity
Accumulated other comprehensive income

Total accumulated other comprehensive income
Subscription rights to shares

The accompanying notes to the consolidated financial statements are an integral part of these statements.

Annual Report 201424

Consolidated Statements of Income
Mabuchi Motor Co., Ltd. and Consolidated Subsidiaries
For the years ended December 31, 2013 and 2014
Yen
(Millions)
Net Sales
Cost of Sales
Gross profit
Selling, General and Administrative Expenses
Operating income
Other Income (Expenses):
Interest and dividend income
Exchange gain, net
Gain on sale of raw material scrap
Loss on disposal of fixed assets, net
Gain on sales of investment securities
Business structure improvement expenses
Impairment loss
Other, net
Income before Income Taxes
Income Taxes:
Current
DeferredIncome before Minority Interests
Net Income

U.S. Dollars(Thousands)

2013¥108,401
81,546
26,854
17,5199,335

2014¥122,544
86,92935,614
18,73916,8752014$1,021,200
724,408
296,783
156,158
140,625

600
5,624
1,182
(196)
13
–
(1,473)(71)
5,679
15,015

715
5,124
1,162
(242)
342
(434)
–
51
6,720
23,595

5,958
42,7009,683(2,016)2,850(3,616)–425
56,000196,625

4,090
405
4,496
10,519¥ 10,519

6,210
(705)
5,504
18,090¥ 18,090

51,750(5,875)45,866
150,750$  150,750

2013

2014

U.S. Dollars
2014¥ 150.10
150.09140.00¥ 258.02
257.95214.00$     2.15
2.14
1.78

Yen
Per Share Data:
Basic net income
Diluted net income
Dividends applicable to current year earnings

The accompanying notes to the consolidated financial statements are an integral part of these statements.

Consolidated Statements of Comprehensive Income
Mabuchi Motor Co., Ltd. and Consolidated Subsidiaries
For the years ended December 31, 2013 and 2014
Yen
(Millions)
Income before Minority Interests
Other Comprehensive Income
Net unrealized holding gains (losses) on securities
Foreign currency translation adjustments
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:Shareholders of the parent
Minority interests

U.S. Dollars(Thousands)

2013¥10,5192014¥18,0902014$150,750

2,321
18,08920,411¥30,930(193)
13,242
13,048¥31,139(1,608)110,350
108,733$259,491¥30,930–¥31,139–$259,491–

The accompanying notes to the consolidated financial statements are an integral part of these statements.

25

MABUCHI MOTOR CO., LTD.

Consolidated Statements of Changes in Net Assets
Mabuchi Motor Co., Ltd. and Consolidated Subsidiaries
For the years ended December 31, 2013 and 2014

Number of Shares(Thousands)

Yen(Millions)

2013

2014

2013

79,751(4,000)75,75175,751–75,751¥ 20,704–¥ 20,704¥ 20,704–¥ 20,704$  172,533–$  172,533

Additional Paid-in Capital:
Beginning balanceEnding balance¥ 20,419¥ 20,419¥ 20,419¥ 20,419$  170,158$  170,158

Retained Earnings:
Beginning balance
Net income
Dividends paid
Treasury stock disposal
Treasury stock cancellation
Ending balance¥188,175
10,519(3,614)(231)(14,359)¥180,490¥180,490
18,090(5,974)––¥192,606$1,504,083
150,750(49,783)––$1,605,050

Treasury Stock:
Beginning balance
Treasury stock acquisition
Treasury stock disposal
Treasury stock cancellation
Ending balance¥ (34,749)
(575)
881
14,359¥ (20,084)¥ (20,084)
(12)
86
–
¥ (20,010)$  (167,366)
(100)
716
–
$  (166,750)

Net Unrealized Holding Gains (Losses) on Securities:
Beginning balance
Net change during the year
Ending balance¥    (158)2,321¥  2,162¥  2,162(193)¥  1,968$   18,016(1,608)$   16,400

Foreign Currency Translation Adjustments:
Beginning balance
Net change during the year
Ending balance¥ (13,020)
18,089¥  5,069¥  5,069
13,242¥ 18,311$   42,241
110,350$  152,591

Retirement Benefit Liability Adjustments:
Beginning balance
Net change during the year
Ending balance

–
–
–

–
¥    (742)¥    (742)–$    (6,183)$    (6,183)

Total Accumulated Other Comprehensive Income:
Beginning balance
Net change during the year
Ending balance¥ (13,179)
20,411¥  7,232¥  7,232
12,305¥ 19,537$   60,266
102,541$  162,808

Subscription Rights to Shares:
Beginning balance
Net change during the year
Ending balance–¥     29¥     29¥     2924¥     54$      241200$      450

¥181,372
10,519(3,614)(575)
649¥208,791
18,090(5,974)(12)
86$1,739,925
150,750(49,783)(100)
716

20,44012,330102,750¥208,791¥233,312$1,944,266

Common Stock:
Beginning balance
Treasury stock cancellation
Ending balance

Total Net Assets:
Beginning balance
Net income
Dividends paid
Treasury stock acquisition
Treasury stock disposal
Net changes in items other thanthose in shareholders’ equity
Ending balance

2014

U.S. Dollars(Thousands)

2014

The accompanying notes to the consolidated financial statements are an integral part of these statements.

Annual Report 201426

Consolidated Statements of Cash Flows
Mabuchi Motor Co., Ltd. and Consolidated Subsidiaries
For the years ended December 31, 2013 and 2014

Yen
(Millions)

2013

2014

2014

¥ 15,015
4,571
1,473

¥ 23,595
5,066–$ 196,625
42,216
–

32

(483)

(4,025)–(600)(1,877)452(715)(1,432)

3,766(5,958)(11,933)

(13)

(342)

(2,850)196(1,823)1,226
221(1,290)(1,534)
15,597611–(935)(3,522)
11,750242(1,738)(1,731)788–(1,213)22,488723(0)–(5,092)
18,1182,016(14,483)(14,425)
6,566–(10,108)
187,400
6,025(0)–(42,433)
150,983

Cash Flows from Investing Activities:
Increase in time deposits
Proceeds from withdrawal of time deposits
Purchases of short-term investments
Proceeds from sales of short-term investments
Purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchases of investment securities
Proceeds from sales of investment securities
Other, net
Net cash provided by (used in) investing activities(8,128)
7,437(5,901)
10,180(5,658)95(1,703)
8,020
(77)
4,264

(16,070)
14,422(7,995)7,600(9,838)31(2,066)2,070(132)(11,977)(133,916)
120,183(66,625)
63,333(81,983)258(17,216)
17,250(1,100)(99,808)

Cash Flows from Financing Activities:
Repayment of long-term loans payable
Proceeds from long-term loans payable
Cash dividends paid
Purchases of treasury stock
Proceeds from sales of treasury stock
Net cash used in financing activities

(56)
567
(3,617)(575)
649(3,031)(113)–(5,974)(12)
86(6,014)(941)–(49,783)(100)
716(50,116)

9,575
22,557
79,904¥102,462

6,631
6,758
102,462¥109,220

55,25856,316
853,850$ 910,166

Cash Flows from Operating Activities:
Income before income taxes
Depreciation and amortization
Impairment loss
Increase (decrease) in allowance for retirement benefits, net ofpayments
Increase (decrease) in liability for retirement benefits
Interest and dividend income
Exchange gain
(Gain) loss on sales of short-term investments and investment
securities
Loss on disposal of fixed assets
Decrease (increase) in trade notes and accounts receivable
Decrease (increase) in inventories
Increase (decrease) in trade notes and accounts payable
Increase (decrease) in provision for business structure improvement
Other, net
SubtotalInterest and dividends received
Interest paid
Payments for directors’ retirement benefits
Income taxes paid
Net cash provided by operating activities

Effect of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and Cash Equivalents at the Beginning of Year
Cash and Cash Equivalents at the End of Year

The accompanying notes to the consolidated financial statements are an integral part of these statements.

27

U.S. Dollars(Thousands)

MABUCHI MOTOR CO., LTD.

Notes to Consolidated Financial Statements
Mabuchi Motor Co., Ltd. and Consolidated Subsidiaries
December 31, 2013 and 2014

1. Summary of Significant Accounting Policies
a Basis of presentation
The accompanying consolidated financial statements of Mabuchi Motor Co., Ltd. (the “Company”) and consolidated subsidiaries areprepared in accordance with accounting principles generally accepted in Japan, which are different in certain respects to theapplication and disclosure requirements of International Financial Reporting Standards, and are compiled from the consolidated
financial statements prepared by the Company as required by the Financial Instruments and Exchange Law of Japan.
For the purpose of this report, certain reclassifications have been made to present the accompanying consolidated financial
statements in a format which is familiar to readers outside Japan.
The consolidated financial statements are expressed in Japanese yen. However, the consolidated financial statements as of, and forthe year ended, December 31, 2014 have been translated into U.S. dollars at a rate of ¥120 = U.S.$1, the approximate exchange rate
prevailing on December 31, 2014. Those U.S. dollar amounts presented in the consolidated financial statements and related notes areincluded solely for the reader. This translation should not be construed as a representation that all the amounts shown could be
converted into U.S. dollars.
b Principles of consolidation
The consolidated financial statements include the accounts of the Company and all significant subsidiaries. All significant intercompany balances, transactions, and profits have been eliminated on consolidation. Investments in unconsolidated subsidiaries arestated at cost.
c Translation of foreign currencies
All monetary assets and liabilities denominated in foreign currencies are translated into yen at the rate of exchange in effect at thebalance sheet date. Exchange gains and/or losses resulting from such translations are included in income before income taxes.
Foreign subsidiaries’ assets and liabilities are translated into yen at the rates of exchange in effect at the balance sheet date. The
components of net assets are translated at historical rates. Revenues and expenses are translated at the average rates of exchange forthe year. The resulting foreign currency translation adjustments are shown as a separate component of net assets.
d Cash equivalents
For the purposes of the statements of cash flows, the Company considers all highly-liquid debt instruments purchased with an original
maturity of three months or less to be cash equivalents.
e Short-term investments and investment securities
The Company classifies securities as “trading securities”, when they are held for the purpose of earning capital gains in the short-term,“held-to-maturity”, where management has the positive intent and ability to hold the securities to maturity, and “other securities”,
where those securities are not classified as either trading or held-to-maturity, which represent primarily available-for-sale securities.
Held-to-maturity securities are reported at amortized cost. Available-for-sale securities are stated at fair value with changes in
unrealized holding gains or losses, net of the applicable income taxes, presented in a separate component of net assets. However,when the fair value of held-to-maturity securities and available-for-sale securities declines significantly and the decline is considered tobe irrecoverable, such unrealized holding losses are recognized as impairment losses. Available-for-sale securities for which fair value is
not readily determinable are stated at moving average cost.
Corporate bonds classified as held-to-maturity securities and debt securities (corporate bonds) classified as available-for-salesecurities include compound financial instruments.
The Company considers a decline in the value of securities to be irrecoverable where market values decline to more than 50% of
acquisition costs. Where market values decline to between 30% and 50% of acquisition costs, the Company judges the necessity ofrecognizing any impairment losses by assessing the potential of market values to recover taking into consideration declining pricetrends and other individually relevant factors.
f Inventories
Finished goods, work in process and raw materials are stated at average cost, however, where net realizable value is lower than cost,
the carrying value of the inventory is reduced.
g Property, plant and equipment and depreciation
Property, plant and equipment are stated at cost. Depreciation is computed primarily using the declining-balance method for theCompany (except for certain buildings) and for overseas subsidiaries, principally using the straight-line method over their estimateduseful lives. Buildings acquired by the Company on or after April 1, 1998 are depreciated using the straight-line method. Maintenanceand repairs, including minor repairs and improvements, are charged to income as incurred.
h Leased assets
Assets under finance leases, except for those under lease agreements which stipulate the transfer of ownership of the leased assets tothe lessee, are depreciated using the straight-line method over the lease period and making the assumption that there is no residual
value.
i Retirement benefits
The Company and certain subsidiaries have funded noncontributory pension plans covering substantially all qualifying full-time
employees. Under the plan, eligible employees are entitled to a 10-year annuity or a lump-sum payment based on the rate of pay at
the time of retirement or termination, length of service and certain other factors. Annual payments to the trustees for the pension
plan, which are deductible for tax purposes, are based on the actuarially determined costs of the plan.
The allowance for retirement benefits is provided based on the amount of the retirement benefit obligation, reduced by the fairvalue of pension plan assets at the end of each fiscal year.
Actuarial gains and losses are amortized commencing from the year following the year in which the gains or losses arose, primarily
using the straight-line method within the average remaining years of service of the employees, which is mainly 10 years.
Prior service costs are amortized using the straight-line method mainly over 10 years.
Certain subsidiaries have pension plans similar to the Company or unfunded retirement and termination allowance plans for
qualifying employees. Any amounts required under the rules of the plans have been fully accrued.
j Income taxes
Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases ofassets and liabilities and their reported amounts using current enacted tax rates.
k Derivative and hedging activities
If a forward foreign exchange contract is executed to hedge a future transaction denominated in a foreign currency, the Company
defers recognition of gains or losses on revaluation of the forward foreign exchange contract until the related losses or gains on thehedged items are recognized.

Annual Report 201428

l Standards issued but not yet effective“Accounting Standard for Retirement Benefits” (Accounting Standards Board of Japan (ASBJ) Statement No.26 of May 17, 2012) andthe “Guidance on Accounting Standard for Retirement Benefits” (ASBJ Guidance No.25 of May 17, 2012)
1) Overview
From the perspective of improving financial reporting and in light of global trends, the accounting standard and related guidance havebeen revised mainly in the areas of the accounting treatment for unrecognized actuarial gains and losses, unrecognized prior service
costs, the calculation method for retirement benefit obligations and service costs, and the enhancement of disclosures.
2) Scheduled date of application
The Company will apply this standard regarding the revision of the determination of the calculation method for retirement benefit
obligations and service costs from the fiscal year beginning January 1, 2015.
3) Impact of application of accounting standards
The Company is currently evaluating the impact of the application of these accounting standards on the consolidated financial
statements.

2. Accounting Changes(“Practical Solution on Transactions of Delivering the Company’s Own Stock to Employees, etc. through Trusts” (ASBJ PITF No.30 ofDecember 25, 2013)
The Company applied “Practical Solution on Transactions of Delivering the Company’s Own Stock to Employees, etc. throughTrusts” (ASBJ PITF No.30 of December 25, 2013) from the fiscal year beginning January 1, 2014. The impact of the application of thisaccounting standard on the consolidated financial statements was immaterial.
Details of the loans payable for the borrowings of the ESOP Trust that have been guaranteed by the Company at December 31, 2013
and 2014 were as follows:
Yen (Millions)Short-term loans payable
Long-term loans payable
Total

2013
¥113
397
¥511

U.S. Dollars (Thousands)
2014$  941
2,358$3,308

2014
¥113
283
¥397

(Accounting Standard for Retirement Benefits)
The Company adopted “Accounting Standard for Retirement Benefits” (ASBJ Statement No. 26 of May 17, 2012) and “Guidance on
Accounting Standard for Retirement Benefits” (ASBJ Guidance No. 25 of May 17, 2012) (except for certain provisions described in themain clause of Section 35 of the standard and in the main clause of Section 67 of the guidance) as of the end of the fiscal year ended
December 31, 2014. These accounting standards require entities to apply a revised method for recording the retirement benefit
obligation, after deducting pension plan assets, as a liability for retirement benefits. In addition, unrecognized actuarial differences andunrecognized prior service costs are recorded as a liability for retirement benefits. Concerning the application of the AccountingStandard for Retirement Benefits, based on the provisional treatment set out in Clause 37 of the standard, the effects of such changes
in the fiscal year ended December 31, 2014 have been recorded in retirement benefits liability adjustments through accumulated othercomprehensive income. As a result of this change, an asset for retirement benefits was recognized in the amount of ¥14 million ($116
thousand), a liability for retirement benefits was recognized in the amount of ¥1,461 million ($12,175 thousand) and accumulated
other comprehensive income decreased by ¥742 million ($6,183 thousand) as of December 31, 2014. In addition, net assets per sharedecreased by ¥10.59 ($0.08).

3. Changes in Net Assets
Information regarding changes in net assets for the years ended December 31, 2013 and 2014 is as follows:a Shares issued and outstanding / Treasury stock
2013
Type of shares
Number of shares as of December 31, 2012
Increase in number of shares
Decrease in number of shares
Number of shares as of December 31, 2013

Shares Issued (Thousands)
Common stock
39,875–2,000
37,875

Treasury Stock (Thousands)
Common stock
4,840
112
2,127
2,825

Notes: 1. T he decrease in the number of shares issued was due to the cancellation of 2,000 thousand shares by resolution of the Boardof Directors.
2. The increase in the number of shares of treasury stock was due to the purchase of 111 thousand shares by the ESOP Trustand the purchase of 1 thousand shares of less than one unit.
3. The decrease in the number of shares of treasury stock was due to cancellation of 2,000 thousand shares by resolution of theBoard of Directors, sales of 111 thousand shares to the ESOP Trust and sales of 16 thousand shares to Our Shareholding
Association by the ESOP Trust.
4. There were 95 thousand shares of treasury stock held by the ESOP Trust included in the number of treasury stock as ofDecember 31, 2013.
2014
Type of shares
Number of shares as of December 31, 2013
Increase in number of shares
Decrease in number of shares
Number of shares as of December 31, 2014

Shares Issued (Thousands)
Common stock
37,875––37,875

Treasury Stock (Thousands)
Common stock
2,825
1
17
2,809

Notes: 1. T he increase in the number of shares of treasury stock was due to the purchase of 1 thousand shares of less than one unit.
2. The decrease in the number of shares of treasury stock was due to sales of 17 thousand shares to Our Shareholding
Association by the ESOP Trust.
3. There were 95 thousand shares and 78 thousand shares of treasury stock held by the ESOP Trust included in the number ofshares of treasury stock as of January 1, 2014 and December 31, 2014, respectively.

29

MABUCHI MOTOR CO., LTD.

b Share subscription rights
2013
Number of shares issued
Company

Description

ParentCompany

Subscription
rights as stock
options
Total

Type of sharesissuedNumber ofshares at
January 1,
2013

Increase

Decrease

Number ofshares at
December 31,
2013

Balance at
December 31,
2013
Yen (Millions)

U.S. Dollars(Thousands)

–

–

–

–

–

¥29

$276

–

–

–

–

–

¥29

$276

Type of sharesissuedNumber ofshares at
January 1,
2014

Increase

Decrease

Number ofshares at
December 31,
2014

Balance at
December 31,
2014
Yen (Millions)

U.S. Dollars(Thousands)

–

–

–

–

–

¥54

$450

–

–

–

–

–

¥54

$450

2014
Number of shares issued
Company

Description

ParentCompany

Subscription
rights as stock
options
Total

c Dividends
Dividends paid during the fiscal year ended December 31, 20132013
Resolution by
Total amount of dividends
Dividends per share
Record date
Effective date

Shareholders’ Meeting
March 28, 2013
¥1,751 million($16,676 thousand)¥50($0.47)
December 31, 2012
March 29, 2013

Board of Directors’ Meeting
August 13, 2013
¥1,862 million($17,733 thousand)¥53($0.50)June 30, 2013
September 13, 2013

Note: Dividends paid to the ESOP Trust in the amount of ¥5 million ($47 thousand) have been included in the total amount ofdividends.
Dividends whose record date was in the fiscal year ended December 31, 2013 but whose effective date was in the following fiscal year
2013
Shareholders’ Meeting
March 28, 2014
¥3,057 million($29,114 thousand)¥87($0.82)
December 31, 2013
March 31, 2014

Resolution by
Total amount of dividends
Dividends per share
Record date
Effective date

Note: Dividends paid to the ESOP Trust in the amount of ¥8 million ($76 thousand) have been included in the total amount ofdividends.
Dividends paid during the fiscal year ended December 31, 2014
2014
Resolution by
Total amount of dividends
Dividends per share
Record date
Effective date

Shareholders’ Meeting
March 28, 2014
¥3,057 million($25,475 thousand)¥87($0.72)
December 31, 2013
March 31, 2014

Board of Directors’ Meeting
August 12, 2014
¥2,917 million($24,308 thousand)¥83($0.69)June 30, 2014
September 12, 2014

Note: Dividends approved at the shareholders’ meeting on March 28, 2014 paid to the ESOP Trust in the amount of ¥8 million ($47
thousand) have been included in the total amount of dividends. Dividends approved at the board of directors’ meeting on
August 12, 2014 paid to the ESOP Trust in the amount of ¥7 million ($58 thousand) have been included in the total amount ofdividends.
Dividends whose record date was in the fiscal year ended December 31, 2014 but whose effective date was in the following fiscal year.
2014
Resolution by
Total amount of dividends
Dividends per share
Record date
Effective date

Shareholders’ Meeting
March 27, 2015
¥4,603 million($38,358 thousand)¥131($1.09)December 31, 2014
March 30, 2015

Note: Dividends paid to the ESOP Trust in the amount of ¥10 million ($83 thousand) have been included in the total amount of dividends.

Annual Report 201430

d Stock options
The Company issued the following share subscription rights for the purchase of new shares of common stock in accordance with the
Corporation Law of JapanFor the years ended December 31, 2013 and 2014, the Company recognized and allocated share-based compensation costs asfollows:
Yen (Millions)
Selling, general and administrative expenses
Total

2013
¥29
¥29

U.S. Dollars (Thousands)
2014
$200
$200

2014
¥24
¥24

A description of the 2013 and 2014 Stock Option Plans as of December 31, 2013 and 2014, respectively, are summarized as follows:
Grantee categories and number of grantees
Number of shares
Grant date
Vesting conditions
Service period
Exercisable period

2013 Stock Option Plan
6 directors of the Company
5,970 shares of common stock
May 20, 2013
None
None
May 21, 2013 to May 20, 2033

2014 Stock Option Plan
6 directors of the Company
3,990 shares of common stock
April 21, 2014
None
None
April 22, 2014 to April 21, 2034

The following table summarizes the option activity under the stock option plans referred to above during the years ended December 31,
2013 and 2014.
2013 Stock Option Plan

2014 Stock Option Plan

Non-vested:
Beginning of the year
GrantedForfeited
VestedEnd of the year

–
–
–
–
–

–
3,990
–
3,990
–

VestedBeginning of the year
VestedExercised
Forfeited
End of the year

–
5,970
–
–
–
5,970

–
–
3,990
–
–
3,990

Price information of stock options for the 2013 and 2014 Stock Option Plans as of December 31, 2013 and 2014, respectively, aresummarized as follows:

Exercise price
Average price on exercise
Fair value on grant date2013 Stock
Option Plan
Yen
¥1
–
4,967

2014 Stock
Option Plan
Yen
¥1
–
6,158

2014 Stock
Option Plan
U.S. Dollars$0–51

Fair value as of the grant date for the stock options issued during the year ended December 31, 2014 was estimated using the BlackScholes option pricing model with the following assumptions:2014 Stock Option Plan
26.8%
5.6 years¥140 per share($1.16 per share)
0.22%

Expected volatility*1
Expected remaining period*2
Expected dividend yield*3
Risk-free interest rate*4

The expected volatility is estimated based on a period of 5 years and 7 months (September 8, 2008 to April 14, 2014).
The expected remaining period is based on the estimated term of incumbency of directors.
*3
The expected dividend yield is based on the actual dividend amount for interim and year-end dividend of 2013.
*4
	Risk-free interest rate represents the interest rate of Japanese government bonds whose remaining period corresponds to the
expected remaining period of the stock options.
		 Because it is difficult to estimate the forfeited number of stock options for future periods, an estimation of the vested number isbased upon actual forfeitures in prior periods.
*1*2

4. Cash and Cash Equivalents
Cash and cash equivalents at the end of the year in the accompanying consolidated statements of cash flows are reconciled to cash
and bank deposits reported in the accompanying consolidated balance sheets as of December 31, 2013 and 2014 as follows:
Yen (Millions)
Cash and bank deposits
Time deposits with maturities over three months at the time of purchase
Short-term investments
Securities exposed to price risk
Cash and cash equivalents

31

MABUCHI MOTOR CO., LTD.

2013
¥101,053(5,104)
12,113(5,600)¥102,462

2014¥110,808(7,602)
12,414(6,400)¥109,220

U.S. Dollars (Thousands)
2014$923,400(63,350)
103,450(53,333)$910,166

Significant non-cash transactions for the years ended December 31, 2013 and 2014 were as follows:
Yen (Millions)2013¥14,359

Treasury stock cancellation

U.S. Dollars (Thousands)
2014
–

2014
–

5. Financial Instruments(1) Financial Instrumentsa. Policies for financial instruments
The Company funds R&D expenditure and equipment investment through retained earnings to maintain a sound financial position.
According to this policy, the Company limits the management of surplus funds to short-term deposits and other highly secure financial
assets. The Company uses derivatives to mitigate risks as described below, and does not engage in speculative transactions.
b. Financial instruments description and risks
Trade notes and accounts receivable are exposed to customer credit risk and some are also exposed to foreign currency risk.
Short-term investments and investment securities, primarily held-to-maturity securities, other securities and investments in thestocks of trading partners, are exposed to the risk of fluctuations in market price.
Trade notes and accounts payable are due within one year, and some are exposed to foreign currency risk.
The Company uses forward foreign exchange contracts to hedge the risk of foreign exchange fluctuations associated withreceivables and payables denominated in foreign currencies.
c. Risk management of financial instruments
1 Management of credit risk (risks associated with the default of counterparties)
The Company and its consolidated subsidiaries manage credit risk in compliance with internal control rules and procedures. The due
dates and the balances of trade notes and accounts receivable from major counterparties are monitored and managed regularly toensure early detection and to mitigate the risk of doubtful receivables.
2 Management of market risk (risks associated with fluctuations in foreign exchange rates and interest rates)
The Company and some of its consolidated subsidiaries hedge the risk of foreign exchange rate fluctuations on foreign currency
denominated receivables and payables, using foreign exchange forward contracts on a monthly and individual currency basis. The
Company enters into exchange contracts based on the decision of the Board of Directors and these are monitored regularly by thehead office administrative department.
The Company monitors the fair value and the financial position of the respective issuers of short-term investments and investment
securities regularly in the head office administrative department, and continually reviews the condition of stocks held. The Company
reports the condition of stocks held and their fair value to the Board of Directors, and monitors the rating and financial conditions ofissuers.
3 Management of liquidity risk related to financing activities (risk of non-payment on due date)
The Company manages liquidity risk centrally through the administrative department, which ensures a certain amount of liquidity
through the preparation and update of cash forecasts based on reports from each department and the finance plans prepared by theaccounting departments of each subsidiary.
d. Supplemental information on the fair value of financial instruments
The Company calculates the fair value of financial instruments based on market prices, or by using reasonable estimates when market
prices are not available.
These estimates include variable factors, and therefore may change depending on changes in the underlying assumptions. The
contract amounts of the derivatives are described in Note 7. Derivative Financial Instruments below and are not indicative of themarket risk associated with derivatives transactions.
(2) Fair Value of Financial Instruments
The carrying value, fair value and variance for financial instruments as of December 31, 2013 and 2014 are as follows. Fair values thatare not readily determinable are not included in the following table.

Assets:(1) Cash and bank deposits(2) Trade notes and accounts receivable(3) Short-term investments and investment securities
Total assets
Liabilities:(1) Trade notes and accounts payable
Total liabilities

Carrying value

Yen (Millions)2013
Fair value

101,053
19,45331,179151,686

101,053
19,45331,810152,317

–
–
631
631

5,637
5,637

5,637
5,637

–
–

Yen (Millions)

Variance

U.S. Dollars (Thousands)
2014

Carrying value

Fair value

Variance

Assets:(1) Cash and bank deposits

110,808

110,808(2) Trade notes and accounts receivable

23,33323,333(3) Short-term investments and investment
securities
Total assets
Liabilities:(1) Trade notes and accounts payable
Total liabilities

Carrying value

Fair value

Variance–

923,400

923,400––

194,441

194,441–

31,18731,885697

259,891

265,708

5,808

165,329

166,027697

1,377,741

1,383,558

5,808

7,035
7,035

7,035
7,035

–
–

58,62558,62558,62558,625––

1: Method for calculating the fair values of financial instruments, short-term investments and derivative transactions
Assets:(1) Cash and bank deposits and (2) Trade notes and accounts receivable

Annual Report 201432

The carrying value is used for the fair value of these short-term items because these amounts are approximately the same.
(3) Short-term investments and investment securities
Market prices on securities exchanges are used to determine the fair value of stock. Prices quoted by exchanges or financial institutions
are used to determine the fair value of bonds.
Liabilities(1) Trade notes and accounts payable
The carrying value is used for the fair value of these short-term items because these amounts are approximately the same.
Derivative instruments
Please refer to Note 7. Derivative Financial Instruments.
2: Carrying value of financial instruments for which fair values were extremely difficult to determine
Yen (Millions)
2013
111

Unlisted stocks

U.S. Dollars (Thousands)
2014
933

2014
112

These items are not included in “(3) Short-term investments and investment securities” because market prices do not exist for these
items and their fair values are not readily determinable.
3: Redemption schedule for receivables and marketable securities with maturities at December 31, 2013 and 2014
Yen (Millions)2013
1–5 years––

5–10 years
–
–

–
500

5,375
–

4,000
–

5,600
2,000
1,500
130,106

700
–
–
6,075

–
–
–
4,000

Within 1 year
101,053
19,453

Cash and bank deposits
Trade notes and accounts receivable
Short-term investments and investment securities
Held-to-maturity securities
Corporate bonds
Commercial paper
Other securities
Corporate bonds
Certificates of deposit
Investment trust
Total
Yen (Millions)

U.S. Dollars (Thousands)
2014

Cash and bank deposits
Trade notes and accounts
receivable
Short-term investments andinvestment securities
Held-to-maturity securities
Corporate bonds
Commercial paper
Other securities
Corporate bonds
Certificates of deposit
Investment trust
Total

Within 1 year
110,808

1–5 years–

5–10 years–

Within 1 year
923,400

23,333

–

–

–
1,500

5,375
–

4,400
2,000
2,000
144,042

1,000
–
–
6,375

1–5 years–

5–10 years–

194,441

–

–

4,000
–

–
12,50044,791–33,333
–

–
–
–
4,000

36,666
16,666
16,666
1,200,350

8,333
–
–
53,125–––33,333

6. Investment Securities
The carrying value, fair value and variance for held-to-maturity securities as of December 31, 2013 and 2014 were as follows:(1) Held-to-maturity securities

Securities whose fair value exceeds their carrying value
Corporate bonds
Subtotal
Securities whose carrying value exceeds their fair value
Corporate bonds
Subtotal
Total

33

MABUCHI MOTOR CO., LTD.

Carrying value

Yen (Millions)2013
Fair value

4,375
4,375

5,096
5,096

721
721

5,499
5,499
9,875

5,409
5,409
10,506

(90)
(90)
631

VarianceYen (Millions)

U.S. Dollars (Thousands)
2014

Securities whose fair value exceeds
their carrying value
Corporate bonds
Subtotal
Securities whose carrying value
exceeds their fair value
Corporate bonds
Subtotal
Total

Carrying value

Fair value

Variance

Carrying value

Fair value

Variance

8,375
8,375

9,169
9,169

794
794

69,791
69,791

76,40876,408

6,616
6,616

2,499
2,499
10,874

2,403
2,403
11,572

(96)
(96)
697

20,82520,82590,61620,02520,02596,433

800
800
5,808

The acquisition cost, carrying value and variance for other securities as of December 31, 2013 and 2014 were as follows:(2) Other securities
Acquisition cost

Yen (Millions)2013
Carrying value

Variance

3,285
2,103
1,627
7,016

5,804
2,104
2,092
10,001

2,519
0
464
2,984

54
4,201
7,116
11,373
18,389

44
4,200
7,058
11,302
21,304

(9)
(1)
(58)
(70)
2,914

Securities whose carrying value exceeds their acquisition cost
Stock
Corporate bonds
Other
Subtotal
Securities whose acquisition cost exceeds their carrying value
Stock
Corporate bonds
Other
Subtotal
Total
Yen (Millions)

U.S. Dollars (Thousands)
2014

Securities whose carrying value
exceeds their acquisition cost
Stock
Corporate bonds
Other
Subtotal
Securities whose acquisition costexceeds their carrying value
Stock
Corporate bonds
Other
Subtotal
Total

Acquisition cost

Carrying value

Variance

Acquisition cost

Carrying value

Variance

4,533
1,500
–
6,033

7,262
1,501
–
8,763

2,729
1
–
2,730

37,775
12,500–50,27560,516
12,508–73,02522,7418–
22,750

54
3,900
7,635
11,59017,623

51
3,897
7,599
11,54820,312

(2)
(2)
(36)
(41)
2,689

450
32,50063,62596,583
146,858

425
32,47563,32596,233
169,266

(25)
(25)
(300)
(350)
22,408Unlisted stocks are not included in “Other securities” because their market prices do not exist and their fair values are not readily
determinable.

7. Derivative Financial Instruments
The Company enters into forward exchange contracts and options, and forward precious metal contracts, as a normal part of risk
management efforts. The Company also utilizes compound financial instruments for the purpose of efficient management of surplus
funds. However, only principal guaranteed instruments are used, and derivatives are not used for speculative trading purposes. As aresult, the Company is exposed to risk of currency rate fluctuations and commodity price risk. The Company is also exposed to credit
related losses in the event of the nonperformance of the counterparties to foreign exchange contracts, precious metal contracts andcompound instruments. Management believes such credit risks are minor because of the high credit worthiness of the counterparties
and as such financial instruments are not held for trading purposes.
Forward precious metal contracts are used by the Company to hedge the risk of changes in market prices resulting from thepurchase of precious metals as raw materials for motor products. The contracted amounts outstanding at December 31, 2013 and2014 were ¥3,604 million and ¥16,774 million ($139,783 thousand), respectively.
The estimated fair values at December 31, 2013 and 2014 were ¥3,579 million and ¥15,598 million ($129,983 thousand),
respectively.
These forward contracts are long-term purchase contracts of raw materials, and are also not in the scope of the accounting
standards of financial instruments.

Annual Report 201434

8. Retirement Benefit Plans
The table below sets forth the plans’ statuses and amounts recognized in the balance sheet at December 31, 2013.
Yen (Millions)2013¥(10,280)
9,869
(411)
85
(46)
(372)
111
¥   (484)

Projected benefit obligation
Plan assets at fair value
Unfunded retirement benefit obligation
Unrecognized prior service cost
Unrecognized actuarial gains
Net retirement benefit obligation
Prepaid pension costAccrued retirement benefits

The components of net periodic pension cost for the year ended December 31, 2013 were as follows:
Yen (Millions)
2013
¥ 661
171
20
(105)
(56)
¥ 691

Service cost
Interest cost
Amortization of prior service cost
Expected return on plan assets
Amortization of unrecognized actuarial gain
Net periodic pension cost

The table below sets forth the plans’ statuses and amounts recognized in the balance sheet at December 31, 2014.
1. Movement in retirement benefit obligations
Balance at January 1, 2014
Service cost
Interest cost
Actuarial loss (gain)
Benefit paid
Other
Balance at December 31, 2014

Yen (Millions)¥10,006
358
189
978
(320)
271
¥11,482

U.S. Dollars (Thousands)$83,383
2,983
1,575
8,150
(2,666)
2,258$95,683

Yen (Millions)¥ 9,869
129
58
398
(320)
244
¥10,378

U.S. Dollars (Thousands)$82,241
1,075
483
3,316
(2,666)
2,033$86,483

Yen (Millions)
¥274
38
(10)
38
¥342

U.S. Dollars (Thousands)$2,283316(83)
316$2,8502. Movement in plan assets
Balance at January 1, 2014
Expected return on plan assets
Actuarial gain (loss)
Contributions paid by the employer
Benefit paid
Other
Balance at December 31, 2014

3. Movement in retirement benefit obligations calculated using the simplified method
Balance at January 1, 2014
Retirement benefit cost
Benefit paid
Other
Balance at December 31, 2014

4. Reconciliation from retirement benefit obligations and plan assets to liability (asset) for retirement benefits
Funded retirement benefit obligations
Plan assets
Unfunded retirement benefit obligations
Total net liability for retirement benefits at December 31, 2014
Liability for retirement benefits
Asset for retirement benefits
Total net liability for retirement benefits at December 31, 2014

35

MABUCHI MOTOR CO., LTD.

Yen (Millions)¥ 11,482(10,378)
1,104342¥   1,446
Yen (Millions)¥   1,461(14)¥   1,446

U.S. Dollars (Thousands)$ 95,683(86,483)
9,200
2,850
$ 12,050
U.S. Dollars (Thousands)$ 12,175(116)$ 12,050

5. Retirement benefit costs
Service cost
Interest cost
Expected return on plan assets
Amortization of unrecognized actuarial gain
Amortization of prior service cost
Retirement benefit costs applying a simplified method
Other
Total retirement benefit costs for the fiscal year ended December 31, 2014

Yen (Millions)¥  358
189
(129)
(64)
20
38
598
¥1,012

U.S. Dollars (Thousands)$ 2,983
1,575(1,075)
(533)
166
316
4,983
$ 8,433

Yen (Millions)¥   64968¥1,032

U.S. Dollars (Thousands)$  5338,066$8,6006. Accumulated adjustments for retirement benefits before tax effectUnrecognized prior service cost
Unrecognized actuarial loss
Total balance at December 31, 2014

7. Plan assets
The fair values of plan assets, by major category, as a percentage of total plan assets as of December 31, 2014 were as follows:① Plan assets at December 31, 2014 comprise:
General accounts
Bonds
Cash and deposits
Other
Total

68.0%
19.2%
6.0%
6.8%
100.0%② Long-term expected rate of return
The expected rate of return on plan assets has been estimated based on the anticipated allocation to each asset class and the expectedlong-term returns on assets held in each category.
The assumptions used in accounting for the above plans were as follows:
Discount rate
Expected rate of return on plan assets

2013
Mainly 2.0%
Mainly 1.0%

2014
Mainly 1.0%
Mainly 1.0%

9. Income Taxes
The Company is subject to a number of taxes based on income with the statutory income tax rate of approximately 37.8% for theyears ended December 31, 2013 and 2014. Foreign subsidiaries are subject to income taxes in the countries in which they operate.
The following table summarizes the significant differences between the Japanese statutory income tax rate and the effective income
tax rates on pre-tax income for the years ended December 31, 2013 and 2014.

Statutory income tax rate
Tax credits on dividend income
Different tax rates applied to foreign subsidiaries
Undistributed earnings in foreign subsidiaries
Valuation allowance
Tax deduction
Other, net
Effective income tax rates

2013
%
37.8
0.5
(10.9)
0.6
0.7
(2.5)
3.7
29.9

2014
%
37.8
0.6
(10.1)
1.0
(4.5)
(1.5)
(0.0)
23.3

Annual Report 201436

Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities forfinancial reporting purposes and the amounts used for income tax purposes. Significant components of deferred tax assets andliabilities at December 31, 2013 and 2014 were as follows:
Yen (Millions)Deferred tax assets:
Evaluation losses on investment securities and other assets
Depreciation
Allowance for retirement benefits
Liability for retirement benefits
Unrealized loss on available-for-sale securities
Impairment loss
Unrealized profits on inventories and fixed assets
Net operating loss carry forwards
Other
Valuation allowance
Total
Deferred tax liabilities:
Tax on undistributed earnings in foreign subsidiaries
Unrealized holding gain on securities
Other
Total
As reported in the consolidated balance sheet:
Deferred tax assets
Deferred tax liabilities

2013

2014

U.S. Dollars (Thousands)
2014¥   911
114
148
–
25
368
871
325
531
(2,149)¥ 1,147¥   573
125
–
415
24
494
1,243
237
454
(1,189)¥ 2,379$ 4,775
1,041
–
3,458
200
4,116
10,358
1,975
3,787(9,908)$19,825¥ 1,457751
169¥ 2,379¥ 1,692
720
116¥ 2,529$14,100
6,000
966$21,075¥ 1,011¥ 2,243¥ 2,002¥ 2,153$16,683$17,941

10. Consolidated Statements of Comprehensive Income
The following table presents reclassification adjustments and tax effects for each component of other comprehensive income for theyears ended December 31, 2013 and 2014.
Yen (Millions)
Unrealized holding gains (losses) on securities:
Amount arising during the year
Reclassification adjustments for gains and losses included in net income
Amount before tax effectTax effectUnrealized holding gains (losses) on securities
Foreign currency translation adjustments
Amount arising during the year
Total other comprehensive income

2013

2014

U.S. Dollars (Thousands)
2014¥ 2,858
(13)
2,844
(522)
2,321

¥   116
(341)
(225)
31
(193)

$    966(2,841)(1,875)258(1,608)18,089¥20,411

13,242¥13,048

110,350$108,733

11. Shareholders’ Equity
Under the Japanese Corporation Law (“the Law”), the entire amount paid for new shares is required to be designated as common
stock. However, a company may, by a resolution of the Board of Directors, designate an amount not exceeding one half of the price ofthe new shares as additional paid-in capital, which is included in capital surplus.
Under the Law, where a distribution of earnings is made, the smaller of an amount equal to 10% of the dividend or the excess, ifany, of 25% of common stock over the total of additional paid-in capital and the legal earnings reserve must be set aside as additional
paid-in capital or as part of the legal earnings reserve. The legal earnings reserve is included in retained earnings in the accompanying
consolidated balance sheets.
As of December 31, 2014, the total amount of additional paid-in capital and the legal earnings reserve exceeded 25% of thecommon stock; therefore, no additional transfer is required.
Additional paid-in capital and the legal earnings reserve may not be distributed as dividends. However, by a resolution at ashareholders’ meeting, additional paid-in capital and the legal earnings reserve may be transferred to other retained earnings andcapital surplus, respectively, which are potentially available for dividends.
The maximum amount that the Company can distribute as dividends is calculated based on the nonconsolidated financial statementsof the Company in accordance with the Law.
Year end dividends are approved by the shareholders after the end of each fiscal year, and semiannual interim cash dividends are
declared by the Board of Directors after the end of each interim six-month period.
On September 12, 2014, interim dividends (¥83 or $0.69 per share) totaling ¥2,917 million ($24,308 thousand) were paid toshareholders based on the shareholders’ record at June 30, 2014. On March 27, 2015, the shareholders approved a declaration ofdividends (¥131 or $1.09 per share) totaling ¥4,603 million ($38,358 thousand).

12. Amounts Per Share
Yen
2013

2014

Net Income
Basic
Diluted¥150.09¥150.09¥258.02¥257.95

Net Assets

2013¥2,978.02

Yen

37

MABUCHI MOTOR CO., LTD.

2014
¥3,325.99

U.S. Dollars
2014
$2.15
$2.14
U.S. Dollars
2014$27.71

Basic net income per share is computed based on the net income available for distribution to shareholders of common stock and theweighted average number of shares of common stock outstanding during the year, and diluted net income per share is computed
based on the net income available for distribution to shareholders and the weighted average number of shares of common stock
outstanding during each year after giving effect to the dilutive potential of shares of common stock to be issued upon the exercise ofstock subscription rights.
Net assets per share are computed based on the net assets excluding share subscription rights and the number of shares of common
stock outstanding at the year-end.
Notes: 1. The Company carried out a 2-for-1 stock split of its common stock effective January 1, 2015 and basic net income, diluted net
income and net assets per share have been calculated as if the stock split took place on January 1, 2013.
2. P er share amounts are computed based on the number of shares outstanding less treasury stock including shares of the ESOP
(Employee Stock Ownership Program) trust account.
3. A s shown in “2. Accounting Changes” the Company has adopted the “Accounting Standard for Retirement Benefits” inaccordance with the provisional treatment stipulated in Section 37 of the standard. This resulted in a ¥10.59 ($0.08) decline
in the amount of net assets per share as of December 31, 2014.
The bases for the calculations are as follows:a. Basic and diluted net income per share(Thousands of Shares)
Weighted average number of shares for basic net income
Increase in number of shares of common stock
Exercise of share subscription rights
Number of shares for diluted net income

2013
70,0792014
70,115

7
70,086

17
70,132b. Net assets per share(Thousands of Shares)
2013
70,100The number of shares of common stock used for the calculation of net assets per share

Yen (Millions)
Total net assets
Amounts deducted from total net assets:
Share subscription rights
Net assets attributable to shares of common stock

2013

2014

¥208,791
29
29¥208,762¥233,312
54
54¥233,258

2014
70,131
U.S. Dollars (Thousands)
2014$1,944,266
450
450$1,943,816

13. Selling, General and Administrative Expenses
The main components of “Selling, General and Administrative Expenses” for the years ended December 31, 2013 and 2014 were as
follows:
Yen (Millions)
Packing and freightage expenses
Salaries and wages
Provision for bonuses due to employees
Provision for bonuses due to directors
Retirement benefit expenses
Employee benefit costs
Depreciation
Provision (Reversal) of allowance for doubtful debts
Research expenses

2013

2014

U.S. Dollars (Thousands)
2014¥1,050
7,315
228
74
564
1,282
1,285
(28)
1,031

¥1,198
7,865
186
127
457
1,408
1,304
10
1,153

$ 9,983
65,541
1,550
1,058
3,808
11,733
10,86683
9,608

14. Contingent Liabilities
As of December 31, 2013 and 2014, the Company is contingently liable principally for forward precious metal contracts in the amountsof ¥3,604 million and ¥16,774 million ($139,783 thousand), respectively.

15. Research and Development Expenses
Expenditures relating to research and development activities are charged to income as incurred and amounted to ¥3,763 million and¥4,503 million ($37,525 thousand) for the years ended December 31, 2013 and 2014, respectively.

16. Impairment of Fixed Assets
Impairment losses relating to a fixed asset group in a subsidiary in China of ¥1,473 million were incurred due to the decline in demand
for small motors for DVD players during the year ended December 31, 2013. The recoverable amount of the fixed asset group was
calculated by discounting the estimated future cash flows at a discount rate of 9.9% per annum. Accumulated losses on impairment are
directly deducted from the related assets. There were no impairment losses relating to fixed assets for the year ended December 31, 2014.

Annual Report 201438

17. Segment Information
1. Overview of reporting segments
The reporting segments of the Company and its consolidated subsidiaries are regularly reviewed by the Board of Directors using thesegregated financial information available within each segment of the Company and its consolidated subsidiaries, to determine theallocation of management resources and evaluate business results.
The Company and its consolidated subsidiaries specialize in small motors manufacturing and sales as a single line of business. The
Company is in charge of the business activities in Japan. Meanwhile, subsidiaries located overseas are in charge of operations in Asia,
North and Latin America, Europe, etc. Subsidiaries located overseas are independent management units and propose comprehensive
product strategies while pursuing business expansion.
Since the Company and its consolidated subsidiaries are composed of regional segments based on a manufacturing and sellingsystem, the Company and its consolidated subsidiaries have designated “Japan,” “Asia,” “North and Latin America” and “Europe” astheir reporting segments.
2. Basis of measurement for reporting segment income or loss, segment assets and other material items
The accounting policies and methods for the Group’s reporting segments are the same as described in “1. Summary of Significant
Accounting Policies.”
3. Information concerning net sales, income or loss, assets, liabilities and other items by reporting segment
Yen (Millions)
Net sales:Japan
External customers
Intersegment
Total
Asia
External customers
Intersegment
Total
North and Latin America
External customers
Intersegment
Total
EuropeExternal customers
Intersegment
Total
Corporate and elimination
Consolidated
Segment Income (Loss):
Japan
Asia
North and Latin America
EuropeCorporate and elimination
Consolidated
Segment Assets:
Japan
Asia
North and Latin America
EuropeCorporate and elimination
Consolidated
Others:Depreciation and Amortization:
Japan
Asia
North and Latin America
EuropeCorporate and elimination
Consolidated
Increase in Tangible and Intangible Fixed Assets:
Japan
Asia
North and Latin America
EuropeCorporate and elimination
Consolidated

2013

2014

U.S. Dollars (Thousands)2014¥   10,461
70,26380,725¥   11,522
81,40592,927$    96,016
678,375
774,391

66,75068,871
135,62274,54876,057
150,606

621,233
633,808
1,255,050

11,475–
11,475

12,850–12,850107,083–
107,083

19,713–
19,713(139,135)¥ 108,401

23,624–
23,624(157,463)¥ 122,544

196,866–
196,866(1,312,191)$ 1,021,200¥   1,490
7,535
328
536
(555)
¥   9,335¥    5,311
11,221
265
910
(834)
¥   16,875$    44,258
93,5082,208
7,583(6,950)$   140,625¥   75,051
133,718
4,894
9,767
3,821
¥ 227,253¥   82,008
157,216
8,665
11,667(3,190)¥ 256,368$   683,400
1,310,133
72,20897,225(26,583)$ 2,136,400¥     862
3,972
5
10
(278)
¥   4,571¥     835
4,494
7
9
(279)
¥    5,066$     6,958
37,45058
75(2,325)$    42,216¥     500
5,479
7
11
(204)
¥   5,795¥     495
10,031539
3(13)¥   11,056$     4,125
83,591
4,491
25
(108)
$    92,133

Notes: 1. (1) T he reported “segment income (loss) corporate and elimination” of ¥(555) million in fiscal 2013 and ¥(834) million($(6,950) thousand) in fiscal 2014 represent intersegment transaction eliminations.
		 (2) T he reported “segment assets corporate and elimination” include: corporate assets of ¥85,535 million in fiscal 2013 and¥86,090 million ($717,416 thousand) in fiscal 2014, not allocated to each segment; intersegment debt and credit
eliminations of ¥81,714 million in fiscal 2013 and ¥89,281 million ($744,008 thousand) in fiscal 2014.
		 (3) T he reported “depreciation and amortization corporate and elimination” of ¥278 million in fiscal 2013 and ¥279 million($2,325 thousand) in fiscal 2014 represent intersegment transaction eliminations.
		 (4) The reported “increase in tangible and intangible fixed assets corporate and elimination” of ¥204 million in fiscal 2013and ¥13 million ($108 thousand) in fiscal 2014 represent intersegment transaction eliminations.
2. Segment income (loss) is adjusted for operating income reported in the consolidated statements of income.

39

MABUCHI MOTOR CO., LTD.

Related information
Information on net sales, tangible fixed assets and impairment losses by geographic area is summarized as follows. There is no
information on major customers because individual sales ratios for major customers are lower than 10% of total net sales.
Geographical Information
Yen (Millions)
Net Sales
Japan
Asia
North and Latin America
Europe
Total

2013

2014

U.S. Dollars (Thousands)
2014¥ 10,113
67,09911,475
19,713¥108,401¥ 11,310
74,75812,85023,625¥122,544$   94,250
622,983
107,083
196,875$1,021,200

2013

2014

U.S. Dollars (Thousands)
2014¥16,172
28,7891734¥45,014¥15,81237,615550
29¥54,008$131,766
313,4584,583
241$450,066

2014

U.S. Dollars (Thousands)
2014

Yen (Millions)Tangible Fixed Assets
Japan
Asia
North and Latin America
EuropeTotal

Yen (Millions)2013
Impairment Loss
Japan
Asia
North and Latin America
EuropeTotal–¥1,473––¥1,473

–
–
–
–
–

–
–
–
–
–

18. Subsequent Events(Stock split and partial amendment)
On December 12, 2014, the Company resolved, at the Board of Directors’ meeting, to conduct a stock split, and on January 1, 2015,
the split was completed as described below.
1. Purpose of the stock split
The purpose of the stock split is to increase the trading liquidity of the Company’s stock and expand the investor base, by lowering themarket price of the Company’s stock.
2. Details of the stock split(1) Method of the stock split
The Company will conduct a stock split in which each share of the Company’s common stock held by shareholders listed or recorded in
the final shareholders’ register on Wednesday, December 31, 2014 (effective Tuesday, December 30, 2014, since the record date is abusiness holiday for the Company’s shareholders’ register custodian) will be split into two shares.
(2) Effective date: January 1, 2015(3) Increase in the number of shares due to the stock split: 37,875,881 shares(4) A s shown in “12. Amounts Per Share,” the financial impact on per share information is calculated as if the stock split took place on
January 1, 2013.
(Purchase of treasury stock and cancellation of treasury stock)
On February 13, 2015, the Company resolved, at the Board of Directors’ meeting, to purchase treasury stock pursuant to the provisionsof Article 156 of the Companies Act, applied by replacing terms pursuant to the provisions of Article 165, Paragraph 3 of said Act, andresolved to cancel treasury stock pursuant to the provisions of Article 178 of the Companies Act, as described below.
1. Reasons for the purchase and cancellation of treasury stock
The Company will purchase and cancel treasury stock in order to implement a flexible capital policy to respond to changes in thebusiness environment and to improve shareholder returns and capital efficiency. The Company will also cancel four million shares oftreasury stock that it already holds.
2. Details of matters pertaining to the purchase of treasury stock(1) Class of shares to be purchased: Common stock of the Company(2) Total number of shares to be purchased: 1,000,000 shares (maximum)(1.42% of the total number of shares issued [excluding treasury stock])(3) Total amount of purchase cost: ¥5.0 billion ($41,666 thousand) (maximum)(4) Purchase period: February 17, 2015 to March 24, 2015(5) Purchase method: Purchase in the open market through discretionary trading(6) Other: 824,200 shares have been purchased with a total value of ¥4,999 million ($41,658 thousand)
3. Details of matters pertaining to the cancellation of treasury stock(1) Class of shares to be cancelled: Common stock of the Company(2) Number of shares to be cancelled*: 4,000,000 shares and all shares of treasury stock purchased as stated in item 2 above(3) Scheduled date of cancellation: April 15, 2015
(Stock-based compensation)
On March 27, 2015, the Company resolved, at the Board of Directors’ meeting, to issue subscription rights to shares for directors
based on Articles 236, 238 and 240 of the Law, for the purpose of increasing their willingness to serve and motivation toward
improved corporate value and raised share prices.

Annual Report 201440

Details
Resolution date
Classification and number of grantees
Type of shares to be issued under the subscription rights to shares
Number of shares
Amount to be paid at the time of exercise of the subscription rights to shares
Period during which the subscription rights to shares may be exercised
Conditions for the exercise of the subscription rights to shares
Matters relating to restriction on transfer of the subscription rights to shares
Matters relating to the distribution of the subscription rights to shares following a reorganization

March 27, 2015
Six directors of the Company (excluding outside directors)
Common stock
4,650 shares¥1 per share
Note 8Note 9Note 11
Note 13

Notes:(1) Designation of the subscription rights to shares
Mabuchi Motor Co., Ltd. 3rd Subscription Rights to Shares (Stock-compensation Type)(2) Eligible persons to whom the subscription rights to shares are allotted and the number thereofSix (6) directors of the Company(3) Total number of the subscription rights to shares: 465 units
The above figure is the planned number to be allotted and therefore if the total number of the subscription rights to shares allotteddecreases, for example, in the case where applications for the subscription are not made, the total number of the subscription rights toshares to be allotted shall be the total number of the subscription rights to shares issued.
(4) The type and number of shares underlying the subscription rights to shares
The type of shares underlying the subscription rights to shares shall be the Company’s common stock, and the number of shares
underlying for each subscription right to shares (hereinafter the “Number of Granted Shares”) shall be ten (10).
In case where the Company conducts stock splits or reverse stock splits for the Company’s common stock, the Number of Granted
Shares shall be adjusted according to the following formula, and the resulting fractions of less than one (1) share, if any, shall be
rounded down.
Number of Granted Shares after adjustment = Number of Granted Shares before adjustment × Ratio of the stock split or reverse
stock split
In case where the Company conducts a merger, a demerger or a gratis allotment of shares after the allotment date or any
adjustment to the Number of Granted Shares is necessary mutatis mutandis to these cases, the Number of Granted Shares shall beappropriately adjusted within a reasonable range.
(5) Subscription amount for the subscription rights to shares
The subscription amount for the subscription rights to shares shall be the value based on the fair value, which is calculated using theBlack-Scholes option pricing model as of the allotment date of the subscription rights to shares. Persons to whom the subscription
rights to shares have been allotted (hereinafter the “Subscription Right Holders”) shall offset the claim for compensation held thereby
toward the Company instead of payment of said subscription amount.
(6) Allotment date of the subscription rights to shares
April 20, 2015
(7) Amount to be paid at the time of exercise of the subscription rights to shares
Amount to be paid per share in exercising subscription rights to shares shall be one (1) yen, and total amount to be paid is calculated
by multiplying one (1) yen by the number of shares to be issued.
(8) Period during which the subscription rights to shares may be exercised
The period during which the subscription rights to shares may be exercised shall be from April 21, 2015 to April 20, 2035.
Provided, however, that if the last day of such exercise period falls on a holiday of the Company, the business day preceding said
date shall be the last exercisable day.
(9) Conditions for the exercise of the subscription rights to shares
1) A Subscription Right Holder shall be allowed to exercise the subscription rights to shares, solely in a lump sum, only within aperiod of ten (10) days after he/she forfeits the director’s position of the Company.
2) In case where a Subscription Right Holder dies, his/her heir may exercise the subscription rights to shares. Provided, however,that any person who has inherited the subscription rights to shares from the heir of an allotted person is not allowed to exercise
the subscription rights to shares.
(10) Matters relating to acquisition of the subscription rights to shares
1) In case where a Subscription Right Holder forfeits his/her subscription rights to shares before the exercise thereof pursuant toeither of the clauses in Item (9) above or any provision(s) of the Subscription Rights to Shares Allotment Agreement, the Company
may acquire said subscription rights to shares without charge as of a date separately specified by the Board of Directors of theCompany.
2) In case a General Meeting of Shareholders of the Company (the Board of Directors if such a General Meeting of Shareholders is
unnecessary) approves a proposal for (i) a merger agreement by which the Company becomes extinct; (ii) an absorption-typecompany split agreement or an incorporation-type company split plan by which the Company becomes a splitting company; or(iii) a share exchange agreement or a share transfer plan by which the Company becomes a wholly owned subsidiary of anothercompany or companies, the Company may acquire the subscription rights to shares that have not been exercised as of a dateseparately specified by the Board of Directors of the Company without charge as of such a date.
(11) Restriction on transfer of the subscription rights to shares
Approval of the Board of Directors of the Company via resolution thereat shall be required for the transfer of the subscription rights toshares.
(12) Matters relating to common stock and additional paid-in capital that will be increased in case of stock issuance as aresult of the exercise of subscription rights to shares
1) The amount of common stock that will be increased in case of stock issuance as a result of the exercise of the subscription rights
to shares shall be one-half (1/2) of the maximum limit of common stock, etc., which is calculated in accordance with Article 17,
Paragraph 1, of the Ordinance on Company Accounting, and the resulting fractions of less than one (1) yen, if any, shall be
rounded up.
2) The amount of additional paid-in capital that will be increased in case of stock issuance as a result of the exercise of thesubscription rights to shares shall be the amount of the maximum limit of common stock, etc., stated in 1) above after deducting
the amount of common stock to increase, which is set forth in 1) above.

41

MABUCHI MOTOR CO., LTD.

(13) Treatment of the subscription rights to shares in conducting organizational restructuring
In cases where the Company conducts mergers (limited to cases where the Company is to become extinct as a result of the merger),absorption-type company splits, incorporation-type company splits, share exchanges or share transfers (hereinafter collectively an“Organizational Restructuring Action”), the subscription rights to shares of any of the joint-stock corporations (hereinafter the“Reorganized Company”), which are listed in sub-items (a) through (e) of Article 236, Paragraph 1, Item 8, of the Law, shall be newly
issued pursuant to the following conditions with regard to the subscription rights to shares that remain as of the effective date of theOrganizational Restructuring Action (hereinafter the “Residual Subscription Rights to Shares”). In such cases, the Residual Subscription
Rights to Shares shall be extinguished and the subscription rights to shares of the Reorganized Company shall be newly issued.
Provided, however, that the aforementioned clause shall apply only to cases where such issuance of subscription rights to shares of
the Reorganized Company pursuant to the following conditions has been stipulated in the statement to that effect in the relevant
merger agreement, the absorption-type company split agreement, the incorporation-type company split plan, the share exchange
agreement or the share transfer plan.
1) Number of the subscription rights to shares of the Reorganized Company to be issued
The subscription rights to shares of the Reorganized Company shall be issued in the same number as the Residual Subscription
Rights to Shares held by the Subscription Right Holders.
2) The type and number of the Reorganized Company’s shares underlying the subscription rights to shares
The type of shares underlying the subscription rights to shares shall be the Reorganized Company’s common stock, and thenumber of such Reorganized Company’s common stock to be issued as a result of the exercise of the subscription rights to sharesshall be determined mutatis mutandis to Item (4) above by taking into account the conditions for the Organizational Restructuring
Action and the like.
3) Amount to be paid at the time of exercise of the subscription rights to shares
The exercise price after the restructuring shall be one (1) yen per share of the Reorganized Company’s shares that could be issued
as a result of the exercise of the subscription rights to shares issued. Amount to be paid at the time of exercise of the subscription
rights to shares is calculated by multiplying the exercise price after the restructuring by the number of shares underlying each
subscription rights to shares.
4) Period during which the subscription rights to shares may be exercised
Period during which the subscription rights to shares may be exercised shall be from the later date of either the start date of theperiod during which the subscription rights to shares may be exercised, which is set forth in the aforementioned Item (8), or theeffective date of the Organizational Restructuring Action, until the expiration date of the period during which the subscription
rights to shares may be exercised, which is set forth in the aforementioned Item (8).
5) Matters relating to acquisition of the subscription rights to shares
Acquisition of the subscription rights to shares shall be determined mutatis mutandis to Item (10) above.
6) Restriction on transfer of the subscription rights to shares
Approval of the Board of Directors of the Reorganized Company shall be required for the transfer of the subscription rights toshares.
7) Matters relating to common stock and additional paid-in capital that will be increased in case of stock issuance as a result of theexercise of subscription rights to shares
Common stock and additional paid-in capital to be increased in case of stock issuance as a result of the exercise of subscription
rights to shares shall be determined mutatis mutandis to Item (12) above.
(14) Treatment of fractions of less than one (1) share
In case where there are fractions of less than one (1) share in the number of shares to be issued to a Subscription Right Holder when
the subscription rights to shares are exercised by said Subscription Right Holder, the resulting fractions shall be rounded down.
(15) Non-issuance of certificates for subscription rights to shares
The Company shall not issue certificates for the subscription rights to shares.
(16) Place for payment in exercising the subscription rights to shares
Asakusabashi Branch, The Bank of Tokyo-Mitsubishi UFJ, Ltd.
23-6, Yanagibashi 1-chome, Taito-ku, Tokyo

Annual Report 201442

Independent Auditor’s Report

43

MABUCHI MOTOR CO., LTD.

Investor Information(As of December 31, 2014)

Stock Data

Composition of Shareholders

Number of Shares Authorized...................... 100,000,000
Number of Shares Issued.................................. 37,875,881
Number of Shareholders............................................9,179

Major Shareholders
Number of
Ratio of
Shares Held Shareholders(Thousands)(%)

Major Shareholders
Takaichi Mabuchi
Mabuchi International ScholarshipFoundation
The Master Trust Bank of Japan, Ltd.
(Trust Account)
Japan Trustee Services Bank, Ltd.
(Trust Account)
Takashi Mabuchi
Tamotsu Mabuchi
Premiere Corporation
Taka Corporation Co., Ltd.
TEXAS Inc.
State Street Bank and Trust Company
505225

2,500

7.1

1,500

4.3

1,287

3.7

1,252

3.6

1,130
1,130
1,034
1,028
1,028

3.2
3.2
2.9
2.9
2.9

575

Treasury Shares

Financial Institutions
18.9%

7.2%
Individuals andOthers22.1%

By type ofshareholders

Foreign Corporations
36.2%

Less than 100 0.1%

1,000-9,999 4.4%

1,000,000 and above
38.6%

Notes: 1. In addition to the above, Mabuchi Motor Co., Ltd. retains
2,731,714 treasury shares.
2. The number of shares of treasury stock is excluded from “Ratio of
Shareholders.” The percentages are rounded to one decimal place.
3. 78,200 shares held by the ESOP Trust Utilizing Employee
Shareholding Association are included in the calculation of“Percentage of shares held.”

Cash Dividends per Share/Payout Ratio

66.6

54.9

46.6

(Yen)

61.0

100.0
50.0
50.0

100.0
50.0
50.0

100.0
50.0
50.0

100.0
50.0
50.0

2008

2009

2010

2011

2012

62.0

InterimYear-end

140.0

83.0

2013

2014

4,468

3,503

3,503

2008

2010

2015

30 yen30% of consolidated net income

2014

60 yen30% of consolidated net income

2009

Total Dividend

Payout Ratio

Standard Value for Calculating
Special Dividend

60 yen

66.6

54.9

46.6

41.5

3,503

3,503

4,920

5,974

2011

2012

2013

13,95753.0

Ordinary Dividendper Share

2005

64.3

131.0

Year

60 yen(%)(Millions of yen)

87.0

Changes in Standards for Calculating Dividends

2007

516.8

41.5

Note: The above graph does not show the payout ratio for 2011, as theCompany recorded a net loss for the year.

(*)

By number ofshares heldT otal Dividend/Amount for Repurchase of
Own Stocks/Total Dividend Payout Ratio

214.0
123.0

10,000-99,999 17.4%

100,000-999,999 35.8%

(%)
64.3

100-499 2.7%
500-999 1.0%

1.6

129.8

Financial Instruments
Firms
1.0%
Other Corporations
14.6%

Amount for Repurchase of Own Stocks

2014
Total Dividend Payout Ratio

Note: The above graph does not show the total dividend payout ratio for
2011, as the Company recorded a net loss for the year.

Trend of Stock Price and Related Indicators
2010

2011

2012

2013

2014

High (Yen)

5,520

4,305

3,930

6,380

10,540Low (Yen)

3,920

3,075

2,931

3,675

5,760

20% of consolidated net income

At Year-end (Yen)

4,185

3,205

3,655

6,250

9,620

20% of consolidated net income

PER

27.9

−

20.1

20.8

18.6

PBR

0.8

0.7

0.7

1.0

1.4

2003

50 yen20% of consolidated net income

1999

50 yen5% of consolidated net income(* Additional policy) Actual full-year dividend amount shall be based on
the above calculation standards and shall not be less than the expected
dividend amount announced during the full-year period unless asignificant profit warning is issued.

Annual Report 201444

Corporate Data
(As of December 31, 2014)• Company Name

• Number of Employees

MABUCHI MOTOR CO., LTD.

• Corporate Headquarters
430 Matsuhidai, Matsudo City,
Chiba 270-2280, Japan
Tel: 81-47-710-1111

738 (Non-consolidated)
25,354 (Consolidated)• Ordinary General Meeting of
Shareholders
The Ordinary General Meeting of Shareholders
will be held at the end of March at Corporate
Headquarters.

• Established
January 18, 1954

• Shareholders’ Register Custodian
Mitsubishi UFJ Trust and Banking Corporation
Corporate Agency Department
10-11, Higashi-suna 7-chome, Koto-ku,
Tokyo 137-8081, Japan
Tel: 81-120-232-711• Stock Listing
Japanese Stock Exchange Listing
Tokyo Stock Exchange• Independent Accountants• Paid-in Capital¥20,704,818,800

Ernst & Young ShinNihon LLC
Tokyo, Japan

Corporate Directory
Consolidated Subsidiaries[North & Latin America]

MABUCHI MOTOR AMERICA CORP.
3001, West Big Beaver Road, Suite 328,
Troy, MI 48084, U.S.A.

MABUCHI MOTOR MEXICO S.A.DE.C.V.
Aguascalientes, Ags. México.
[Europe]

MABUCHI MOTOR (EUROPE) GmbH
Herriotstrasse 1, 60528 Frankfurt am
Main, Germany[China & Hong Kong]

MABUCHI INDUSTRY CO., LTD.
19 Sam Chuk Street, San Po Kong,
Kowloon, Hong Kong

MABUCHI MOTOR DALIAN CO., LTD.
No. 41 Harbin Road, Dalian Economic andTechnical Development Zone,
Dalian 116600, China

MABUCHI MOTOR (JIANGSU) CO., LTD.
No. 100 Liuxu Road, Wujiang Economic
and Technological Development Zone,
Jiangsu Province 215200, China

MABUCHI MOTOR (DONGGUAN) CO., LTD.
Guancheng Science & Technology Park,
Shilong Road, Guanlong Road’s Section,
Dongguan City, Guangdong Province
523119, China

45

MABUCHI MOTOR CO., LTD.

MABUCHI MOTOR WAFANGDIAN CO., LTD.
Laohutun Town, Wafangdian City,
Liaoning Province 116322, China

MABUCHI MOTOR (SHANGHAI) CO., LTD.
Room 1901, Kirin Plaza Building, No. 666
Gubei Road, Changning District,
Shanghai 200336, China

MABUCHI MOTOR TRADING (SHENZHEN)
CO., LTD.
Room 1704-05 Great China International
Exchange Square, Jintian Road,
Futian District, Shenzhen City,
Guangdong Province 518034, China

MABUCHI MOTOR (YINGTAN) CO., LTD.
Yingtan Economic and Technological
Development Zone, Yingtan City,
Jiangxi Province 335000, China

MABUCHI PRECISION (DONGGUAN) CO.,LTD.
Ludong Industrial Area, Humen Town,
Dongguan City, Guangdong Province
523935, China

MABUCHI MOTOR DONGGUAN DAOJIAO
CO., LTD.
Industrial Main Road, Daojiao Town,
Dongguan City, Guangdong Province
523179, China

MABUCHI MOTOR (JIANGXI) CO., LTD.
Jinlong Road, Ganzhou Development
Zone, Jiangxi 341000, China[Asia Pacific]

MABUCHI TAIWAN CO., LTD.
No. 18, Chunghwa Road, Hsinchu
Industrial District, Hsinchu 30352, Taiwan

MABUCHI MOTOR TAIWAN LTD.
No. 66 Kai-Fa Road, N.E.P.Z., Kaohsiung
81170, Taiwan

MABUCHI MOTOR (SINGAPORE) PTE. LTD.
111, North Bridge Road, #12-05
Peninsula Plaza, Singapore, 179098

MABUCHI MOTOR VIETNAM LTD.
No. 2 5A Street, Bien Hoa II Industrial
Zone, Bienhoa, Dong Nai, Vietnam

MABUCHI MOTOR DANANG LTD.
Lot A2, No. 3 Street, Hoa Khanh Industrial
Zone, Lien Chieu District, Da Nang City,
Vietnam

MABUCHI MOTOR KOREA CO., LTD.
G-five Central Plaza 328, 27,
Seochojungang-Ro 24-Gil, Seocho-Gu,
Seoul, 137-882 Korea

Non-consolidated Subsidiary
MABUCHI REAL ESTATE CO., LTD.

Annual Report 201446